Charitable giving platform Daffy (Donor Advised Fund for You) announced on Tuesday the launch of a new custom wallet feature.
Initially, Daffy offered 15 pre-built ETF portfolios spread across four broad categories: conservative, benchmark, ESG and crypto. Custom wallets will be the fifth category.
This functionality was not available at first, mainly out of a desire to keep things easy and simple for users and to be first to market in the app store, according to founder Adam Nash. Additionally, customer feedback from past years has been an invaluable resource.
“We probably could have built a tool like this to work early on, but I don't think we knew enough back then about what our users wanted to get right,” Nash said.
When a user chooses the custom option, they're given one of Daffy's existing wallet designs as a starting point (though there's no requirement to stick to it). From there, funds can be added or removed to create the desired mix. A dynamic chart of the different weights in the portfolio is front and center to provide a useful visual aid.
The new funds include 460 low-cost ETFs from providers such as Vanguard, Blackrock iShares, Fidelity, Schwab, Van Eck, Bitwise and State Street SPDR. The Daffy team has also set asset class as an additional subcategory 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 selected the most attractive ETFs with the lowest expense ratios (under 0.5%) that still offered an acceptable level of liquidity,” Nash said.
Daffy's marketing materials state that the new additions bring the number of different potential portfolios that can be built on the platform from 15 to 100 quintillion. Nash admits that, while accurate, that number is actually a bit of fun: “Flexibility is the issue. Not a huge volume,” he said.
According to Nash, while the initial set of pre-made templates is great for letting people take advantage of the impulse to give (an underrated aspect where giving differs from pure investing, where impulse is a bad word); after all, it's hard 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 charity heap in this regard, as others either lack the same breadth of options, a simple and usable interface, or both.
As an example, Nash points out 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 are able to attract users from all levels of wealth, not just the ultra-wealthy that are typically associated with giving,” he said.
In terms of cost, custom wallets are a premium product and will be included in the highest membership level (Benefactor), which costs $20 per month. Daffy's lowest-level membership, which is suitable for single donors, costs $3 a month.
“We're looking to address the fundamental challenge of how to keep things quick and easy for clients while giving them portfolio control to align their giving and investing with their values,” he said.