Charitable giving platform Daffy (Donor Advised Fund for You) announced Tuesday the launch of a new custom portfolio feature.
Initially, Daffy offered 15 pre-built ETF portfolios spread across four broad categories: conservative, standard, ESG and crypto. Custom portfolios will be the fifth category.
This functionality wasn’t available at launch largely out of a desire to keep things easy and streamlined for users and to be first to market on the app store, according to founder Adam Nash. Additionally, the customer feedback from the past few years has been an invaluable resource.
"We probably could have designed a tool like this to work at launch, but I don't think we knew enough then about what our users wanted to do it right,” Nash said.
When a user selects the custom option, they’re given one of Daffy’s existing portfolio templates as a starting point (though there’s no requirement to adhere to it). From there, funds can be added or removed to create the desired mix. A dynamic pie chart of the various weights in the portfolio is front and center to offer a helpful visual aid.
The new funds include 460 low-cost, ETFs from providers like Vanguard, Blackrock iShares, Fidelity, Schwab, Van Eck, Bitwise and State Street SPDR. The Daffy team has also set asset class as an additional sub category for easier searching. The final portfolio is then submitted for review by the Daffy team for internal compliance purposes (a necessary step, as Daffy is a registered non-profit).
“We went through the most reputable vendors and picked the most attractive ETFs with the lowest expense ratios (sub 0.5%) that still offered an acceptable level of liquidity,” Nash said.
Daffy’s marketing materials highlight that the new additions bring the number of potential different portfolios that can be built on the platform from 15 to 100 quintillion. Nash admits that, while accurate, that number is really just a bit of fun: “Flexibility is the point. Not sheer volume,” he said.
According to Nash, while the initial set of pre-generated templates is great at letting people take advantage of the impulse to give (an underrated aspect where giving differs from pure investing, where impulse is a bad word); at the end of the day, it’s tough to convince successful investors to use a DAF that doesn’t give them the options they want. He believes Daffy is now at the top of the charitable heap in this regard, as others either lack the same breadth of options, a streamlined, usable interface or both.
As an example, Nash highlights that Daffy is the first major DAF to offer support for Ethereum ETFs, which just started trading last week.
“By having a modern platform, we’re able to attract users from all wealth levels, not just the ultra-wealthy typically associated with giving,” he said.
As far as cost goes, the custom portfolios are a premium product and will be included at the highest (Benefactor) membership level, which costs $20 a month. Daffy’s lowest level membership, which is appropriate for single givers, runs a flat $3 a month.
“We’re looking to address the fundamental challenge of how to keep things quick and easy for clients while giving them some portfolio control to align their giving and investing with their values,” he said.