The modern philanthropist has more opportunities than ever to give to charitable causes. But when we think of “philanthropists,” the images that come to mind tend to be more exclusive than inclusive. Traditional means of giving back, like private foundations, have always been inaccessible to most individuals and families. However, the rise of the donor-advised fund has changed things.
For the past decade, donor-advised funds have steadily risen in popularity. The total number of donor-advised fund accounts hit approximately 1.95 million in 2022, a 2.9% increase from the previous year. Grants from these accounts also reached a whopping $52.16 billion.
Those are some impressive numbers – but they have a caveat. Access to these funds has historically been saved for a select few, typically wealthier individuals and institutions with connections and the resources to make large investments. But with an employee donor-advised fund, all of that changes.
A donor-advised fund (DAF) is a charitable giving account that gives individuals and businesses the ability to make tax-deductible contributions to causes they care about. The funds donated can be distributed to charities over time, but donors can typically take an immediate tax deduction after contributing.
DAFs are nothing new; they’ve been around in the United States for nearly 100 years. However, their current popularity is fairly recent.
In the past, DAFs have primarily been inaccessible to most individuals and families. Since many DAFs require significant minimum donations, they’re often prohibitively costly for those with less disposable income.
Over the past decade, though, the growth of donor-advised funds suggests a larger shift in how affluent donors approach charity in general. Unlike starting a foundation – a feat reserved for only the wealthiest families, individuals, and corporations – giving to a DAF is a quick, flexible, and easy way to support causes you care about. The tax efficiency of DAFs also makes them a far more attractive option.
On paper, this all sounds great – the problem is, though, that DAFs continue to be an expensive investment for most.
Today, donor-advised funds are largely used by high-income stakeholders and highly profitable corporations. While their existence has generally made charitable giving a more beneficial and accessible act, they still come with strings that prevent the average person from utilizing them.
Modern philanthropy has, at least to some degree, been defined by DAFs and their rise in popularity. DAFs can have their place in your corporate social impact toolbox – but you have the power to leverage donor-advised funds as an employee benefit.
Employee donor-advised funds powered by Groundswell allow companies to establish personal giving accounts for their teams. That means each of your employees can be the owner of their very own tax-advantaged donor-advised fund, all without the need to meet minimum balance requirements or manage administrative fees – AKA, the costs that typically make DAFs inaccessible.
Take things a step further with Groundswell’s corporate giving and matching capabilities, which let you instantly match employee donations to double their impact. Our platform deposits charitable funds into individual employee accounts so that your team members can support causes as they wish.
Groundswell gives companies a corporate DAF at no extra cost. It’s just one of the many benefits of a platform built for a new era of philanthropy: one where charitable giving is integrated into everyday life.
Making the choice to use employee donor-advised funds allows you to give your employees a gift that will stick with them, even if they leave your company. Groundswell’s DAFs are individual accounts registered in each employee’s name, much like a 401k plan. That means that you can provide a benefit that has enough financial value to last a lifetime.
It’s likely that your employees are already giving to charity in some way – many American households do. Middle-income earners in the US, for instance, have an average yearly charitable donation amount of approximately $3,296.
Employee DAFs also give you a new way to support the financial well-being of your employees. Giving gifts and matches can help you subsidize their annual giving, all while providing access to tax benefits and an account that is truly worth the investment.
Overall, with the help of DAF, you can help your entire organization leave an impact. And, with a tool like Groundswell, contributing to a DAF – even on the go – has never been easier.
Our platform is designed to inspire meaningful giving. While tax benefits are nice, they aren’t at the heart of true philanthropy. What matters most is giving for the benefit of our communities, both local and global. We set out to create software that celebrates that by creating portable, intuitive tech that makes giving back a part of your regular routine.
Here’s a quick rundown of how you can create an employee donor-advised fund using Groundswell’s revolutionary corporate philanthropy platform:
It’s that simple! All of the functionality you need in a giving platform can now be found right in your pocket. We’ve created a mobile-first experience so that anyone on your teams can make a difference at any time, anywhere. It doesn’t get more accessible than that.
There’s no better way to prove your commitment to social impact to your employees than by putting the power to use it in their hands. Support financial well-being, drive employee engagement and satisfaction rates, and make donation matching a meaningful benefit for your company with the help of Groundswell.
Want to learn more about how we’re shaping what it means to be a modern philanthropist? Book a demo today to get started.
