Donor-Advised Funds and Impact Investing

One of the several benefits of donor-advised funds (DAFs) is how they offer donors the opportunity to recommend investments, before grants are made. DAF donors may recommend that DAF assets be invested in social impact investment opportunities, potentially creating additional value over time and allowing donated assets to grow tax-free.

Impact investments are designed to generate measurable positive social and/or environmental impact in addition to financial return, making impact investing an attractive strategy for those seeking innovative and long-term ways to benefit society while generating charitable income. As DAF assets have already been gifted, donors can afford to be more risk-taking, or catalytic, in the pursuit of social and/or environmental impact.

NPT UK’s Impact Investment Offering

In recognition of our donors’ desire to maximise their charitable impact, NPT UK offers a range of impact investment options on our DAF investment menu. These options address a range of social and environmental issue areas including climate change mitigation, gender equality and causes supporting the UN’s Sustainable Development Goals.

NPT UK can also work with donors to build bespoke impact investment portfolios. Donors with a DAF balance above £500,000 may recommend impact investments by making a Bespoke Investment Recommendation with an investment manager and investment theme in line with their personal ESG interests and impact goals.

Impact investing continues to be a burgeoning market. The Global Impact Investment Network estimates the size of the worldwide impact investing market at $1.164 trillion USD. While the structure of impact investments varies, the possibilities for causes to support are virtually limitless, making it an important option for philanthropists the world over.

To learn more about how your client’s donor-advised fund assets can be invested in NPT UK’s impact investments, please contact us.

About the Author

John Canady, CEO of National Philanthropic Trust UK, has 25 years of experience working across the business, nonprofit and government sectors. He specializes in creating and managing philanthropic funds for donors and family offices around the world who wish to base their philanthropy from the UK.