Want to give more? This new tool is the 401(k) for your charitable contributions
Growfund is democratizing philanthropy by allowing even the smallest donations the opportunity to pay dividends
A little more than a year ago, Global Impact’s President and CEO issued a challenge to our team: “How can we put the same tools that major philanthropists have into the hands of every person, everywhere?”
He was referring to a particular philanthropic tool called a Donor Advised Fund (DAF), a tax-deductible investment account from which funds are granted by the owner. Largely due to its tax benefits, the DAF was gaining recognition as the fastest growing charitable vehicle in the United States. However, at the time of the challenge, DAFs were not accessible to most people. In order to open a DAF, one would need to save $5,000—at a minimum a significant, and in many cases prohibitive, amount. To face this challenge, we determined to make this tool widely available, drawing on the expertise we had gained from our decades of working at the nexus of philanthropy, finance, and technology.
In developing the tool, we aimed to create a meaningful giving experience that would:
- Be as simple as possible
- Create a sense of community
- Provide a means to engage employees, students and families
And now, a year later, we launched a revolutionary new product—and the only one of its kind on the market: Growfund is a DAF that allows you to invest your funds from the first dollar. Think of it like a personal foundation, which you can name and direct. Through a partnership with Guidestar, you can make grants to nearly a million charities, searchable by name, geography, or cause. Growfund is also a social platform, enabling you to invite others to contribute to your fund. It can be custom-branded for organizations to use it as part of their financial wellness package for employees.
I was able to observe the transformative power of Growfund firsthand, using it to engage my daughter in philanthropy from a young age. For years, my daughter has given her birthday to a prominent wildlife charity—in lieu of gifts, she would ask that friends and family donate to this charity. For each donation, she would receive a stuffed animal as a thank you from the organization. Although her collection of baby seals, pandas, and elephants has grown exponentially, that was pretty much the extent of her relationship with the charity. There was no real way for the charity to recognize the depth of her support or acknowledge the significant amount that she had raised.
But now, through Growfund, we can set up a Birthday Party Fund, invite others to give to this fund, and then when she is ready, she can send one large donation to the same charity rather than a number of smaller donations. The charity will now see her and engage with her as a different kind of donor. Instead of stuffed animals, she will get impact reports, and she will better understand how she is making a difference. Ultimately, she will see her own philanthropy in a new light, as more strategic and meaningful.
What if everyone who was asked to give, had money set aside to do so?
Through my own Growfund, I am now able to save with each paycheck and set aside funds, to plan and budget my contributions. This has allowed me to give in a less ad-hoc manner. Already I am seeing how my giving has become much more aligned with my own passions for engaging the next generation of social leaders in the world and empowering women and girls. I have been able to give at much more meaningful levels, fundamentally changing the relationship I have with the nonprofit organizations I support. I have also been able to set aside money for disaster-related issues. Also, because the funds are being invested much like a 401(k), I have seen my contribution grow on a bi-weekly basis, with a return on the investment that will enable me to give even more in the long run.
When the challenge was issued over a year ago, I could not have predicted the transformative effect Growfund would have on our partners, our communities, and on my family’s own giving. With this tool, it’s now possible for more people to be strategic with their giving. It’s even being used by universities to build a culture of philanthropy on campus. So the new challenge for me is: “What if everyone who was asked to give, had money set aside to do so?” Having seen the potential for Growfund to transform the way people engage with the causes that impassion them, I’m confident that we will make it happen.