Discover how Donor Advised Funds (DAFs) can revolutionize your approach to philanthropy with Salomon Serfati, CEO and co-founder of Chariot. Saul joins us to shed light on how DAFs offer significant tax benefits and the flexibility to time your contributions for maximum impact. Through a touching personal anecdote, Saul reveals how he and his fiancée used a DAF to help fund weddings for those in need, illuminating the communal and heartfelt potential of these funds.
We also explore the innovative possibilities of DAFs in making charitable giving more strategic and aligned with personal values. Learn about DAF pay, an exciting solution that simplifies the donation process directly from nonprofit websites, making philanthropy more accessible than ever. Whether you're new to the concept or a seasoned donor, this episode promises valuable insights into how DAFs can help democratize strategic philanthropy and make your charitable efforts more impactful.
Hosts: Sam Maule & Maia Bittner
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Sam Maule (00:00):
Hey everybody, welcome to another episode of
Artificially Intelligent Podcast.
This is brought to you by ourfriends at Money 2020.
I'm Sam Maule, one of yourhosts, and what do we call
ourselves?
Maia?
Perpetual interns.
Maia Bittner (00:18):
Oh yeah, the interns here to constantly keep
learning.
We are eager, we are withcoffee and ready to learn
something new.
Sam Maule (00:29):
Always with coffee, always with coffee, I agree.
So my little life update on myend I now have.
Every single child hasgraduated from something.
My son has now graduated fromhigh school.
My daughter has graduated fromcollege.
I'm done, thank you.
Maia Bittner (00:47):
Just one more kid to get through college.
You've been listening to a lotof inspiring graduation speeches
.
Sam Maule (00:52):
I have slept through several inspiring graduation
speeches, so I'm good to go.
How's life on your end?
Maia Bittner (00:58):
You're breaking my heart.
I just spoke at a graduation.
I saw that, so I assumeeveryone was on the edge of
their seats, paying lots ofattention to all of the wisdom
that I have to impart to thesenew college graduates.
Sam Maule (01:15):
I believe yours was at your alma mater.
Maia Bittner (01:17):
Yes, it was Franklin W Olin College of
Engineering.
Full circle there.
Well, speaking of charitieslike and non-profits, and things
that you donate to um sam,we've got here today Salo S
surfati, who is the CEO andfounder of chariot .
Sam Maule (01:42):
Welcome to the podcast thanks for having me
very excited and this is and,Maia, this is like a perfect
opportunity for you and I,because, sol, I'm going to be
honest, I don't know anythingabout donor advised funds
nothing, zero, zilch.
And this is what Maia and Ithis is the reason we put the
podcast together was I don'twant to call them edge cases,
(02:03):
but this is a chance, for I'vebeen in the industry 30 years
now in banking and fintech.
I love that.
I keep learning new stuff.
Maia, I've never heard of a DAF.
Do they call them DAFs?
Sal?
Salomon Serfati (02:15):
Yeah, DAFs is the people who have them.
Call them DAFs Exactly.
Sam Maule (02:19):
I love that.
See, there you go, Mai maya,another one.
Maia Bittner (02:22):
There's actually a fun startup called DAFI.
Sam Maule (02:25):
Seriously Well, but that isn't yours right, Sal.
Salomon Serfati (02:29):
No, and DAFI actually stands for Donor
Advised Fund For you.
Maia Bittner (02:35):
Oh, I didn't know it had a whole acronym, so let's
start there.
Can you give us the high leveloverview of what is a DAF?
Why do people have them?
What use are they?
Salomon Serfati (02:47):
Yeah, so a DAF or donor advised fund is.
You can think of it as aseparate account you have
specifically for charity.
So there's a lot of reasons whypeople would open them up.
But in its most simplest form,it's a savings account you have
with any major banking providerwhere you keep your charity
(03:07):
dollars there.
Why do people open them?
So there's a lot of reasons.
Maia Bittner (03:11):
Why do I want a separate?
Open them.
So there's a lot of reasons.
That's insane.
So why?
Why do I want a separateaccount for charity?
Salomon Serfati (03:14):
There's a lot of reasons.
One of them, and it's the mostobvious one, is the tax benefits
.
So you actually get a taxreceipt or a tax deduction when
you deposit money into thisaccount.
Got it?
Maia Bittner (03:27):
Does that make it easier to time when I want my
tax deduction for donating tocharity?
Salomon Serfati (03:33):
Precisely so you can deposit however much
money you want up front.
You get that tax receipt andover your lifetime you can
decide where you want to donatethose dollars.
Where the tax advantages becomevery great is when you have
capital gains anything withcapital gains, unrealized
capital gains.
So let's say you have, likeApple stock that appreciated a
(03:54):
lot.
You can actually transfer yourApple stock.
You get a tax receipt for thefull value of that stock and
then you can decide where todonate all those dollars.
So you never have to paycapital gains on the stock
because it sits in a DAF andanything in a DAF has to go to
charity.
Sam Maule (04:11):
Did I look this up right, so I want to make sure I
got this right.
You and your fiance set a DAFup for a community fund so it
could be dedicated to financingweddings for those who can't
afford them.
Is that right?
Is this the same?
Salomon Serfati (04:24):
song.
It's the same.
That was like we opened up aDAF for a specific event or a
specific cause.
You're also able to do that, um, so a lot of people can donate
into a fund.
Everyone gets a tax receipt fordonating into the fund and then
you can decide like as amanager of the fund, you can
decide what charities to donatethat money to.
(04:45):
So it's almost like followcrypto, right right, it's like a
DAO in a way.
Right yeah, which is very cool.
But you can have a personal DAFthat only you deposit money
into and you decide where to go.
You can have a family DAFthat's a very popular structure,
whereas a family, you can sayeveryone deposits some money
into this account and as afamily, we decide where we want
(05:09):
these dollars to go, to whichphilanthropic causes, and it
really brings the familytogether.
Sam Maule (05:14):
All right, I want you to be honest.
Was this your idea, or yourfiance's, to set up the
community?
It was both.
Salomon Serfati (05:21):
I said we should do it.
She pushed it forward and itwas really beautiful, right?
Because we got to enjoy a nicelike a really nice wedding.
We were very happy and when youknow that around the world
people can't afford one, and ifwe can give some of that
happiness that we felt at ourwedding to other people to
experience as well, we wanted topush that forward.
Sam Maule (05:43):
No, I absolutely love it because I was at Google for
a while.
So there's always this thingabout eat your own dog food
Right it's.
You have these great ideas.
You actually use them.
Salomon Serfati (05:56):
And the fact that you did that around such an
important life event.
I absolutely love that.
Yeah, I actually started usingdonor advised funds way earlier
in my life.
So I have, I have a principlewhere I donate 10% of my income
to charity and I've been doingthat since like middle school.
So when people would give mebirthday gifts, I would say,
okay, what's 10% of the birthdaygift and I would make sure I
would give it to charity and Iwould keep track of that on like
(06:17):
excel spreadsheets and likethat's how I would keep track of
it throughout my life.
But when I got my firstfull-time job at BlackRock I was
a back-end engineer it becamelike too messy to keep track of
it all in an Excel spreadsheet.
So we realized that's when Istarted learning about donor
advised funds and I'm like, wow,they're literally a separate
account.
You can have that.
You can automatically deposit10% of your income to that
(06:39):
account and you know that by lawyou have to donate those
dollars to charity.
So it's as if you've almostalready given them.
And that's when I started touse them and some of like my
friends that, and that's how weeventually started Chariot, our
company, and I want to likeemphasize on.
That's like another reason why alot of people have donor device
funds.
It's not just for the taxproperties.
(06:59):
A lot of them have them.
A lot of people have them asjust a separate account, like
organizationally, because theyknow they have some principle or
they have some motivatingfactor that they know that they
want to donate to charity.
So separating that out andholding yourself to that goal is
another big motivator forpeople to have these accounts.
And the stats show it.
(07:20):
Because 50% of deposits intoDAFs are by cash, which is like
not the efficient way if youwant it to be tax efficient.
But the fact that 50% ofdeposits are by cash is because
not everyone who uses these areusing these accounts for tax
reasons.
Sam Maule (07:34):
I 100% get this, and I don't know if I ever told you
this, and so I'm interested inwhat motivated you to do that
when you were young.
But I grew up with a mother whohad multiple sclerosis, so it
was absolutely handicapped.
You know, I was 10 years oldand my life turned upside down,
so I have been donating to themultiple sclerosis society for
my entire life.
(07:54):
Just a given.
I don't even think about it.
It's just something you do, soI'm just assuming you have
incredible parents who taughtyou those values and got you
interested in doing that.
But now I wish I'd known aboutDAFs much earlier, because this
is something that I personallydo.
Salomon Serfati (08:13):
Yeah, I would say it came from parents school,
like a sort of like a moralobligation.
I would say that I alwaysquestioned why people spend a
lot of money on very expensivethings that they can get for
cheaper, instead of helpingother people out.
And I always realized thatthat's a hypocritical thought
(08:36):
because, like I used to likegoing to basketball games, for
example, but I could watch it onTV and the difference of the
money spent I could have donatedit.
So I found that the mostefficient model is actually a
percentage of your income andfulfilling some moral
responsibility to give back,because we're all born with,
like you know, like a lotteryticket to some respect, right.
(08:58):
Because we're all born with,like you know, like a lottery
ticket to some respect, right.
And because that percentage ofincome, if you can strive to
make more money like acapitalistic structure and
you're just going to be givingmore as a result, so you're
taking more but also giving more.
So percentage always workedwell in my mind.
Maia Bittner (09:12):
I love that.
Yeah, I have a DAF.
It is with another startupcalled CharityVest, and one of
the things that I also likeabout.
Well, I think most DAFsinfrastructure the most.
Most companies support this.
I can invest the money in my DAFand so it actually has the
potential to grow.
(09:32):
So I put in money or I donatestock or whatever has the
potential to grow in size, andthen I can choose to donate it
to charity whenever I like.
I also just heard about thisreally interesting concept,
which is people who aresupporting using your DAF to
invest in venture capital andthen hopefully making big
(09:58):
returns, and then, of course,all of the money that you make
on of those investments getsdonated to charity.
And I think there's a lot ofpeople who are sort of more
comfortable with that as theirfirst entry into private
investing, but I thought thatwas a really, really interesting
idea is using this money thatyou've set aside for charity,
(10:20):
placing risky bets and then,hopefully, it you know 10xs or
100xs and you have a lot moremoney to donate charity at the
end.
Salomon Serfati (10:29):
Yeah, it's an incredible tool in the sense
that the money you put in is notgoing to lose its value to
inflation.
As you take time to figure outwhere you want to donate those
dollars, you can be veryflexible as to how that money
grows.
The important piece is that themoney is not technically yours
it's owned by a non-profit.
That's how you get the taxreceipt up front.
(10:50):
So whatever money that moneymakes must go to charity, and
you can never take it back um,so that's an important thing.
And if charity is defined as a501c3 um organization by the irs
, so it's a public charity andthen is a daf itself a charity.
Maia Bittner (11:11):
I think I was looking at setting up a nimcrut,
which is a charitable remaindertrust um, with a beneficiary
being my daf um, so that then Icould send the charities that
exactly it goes over.
So is that is it?
Is it considered a charity?
Salomon Serfati (11:28):
functionally, a daf is a charity.
Um, what you're doing when youdeposit money into a daf?
Maia Bittner (11:33):
you're giving your money to a charity and then it
is a charity and your account itlooks like it's a charity that
picks exactly, exactly.
Salomon Serfati (11:41):
You're putting your money into a charity, um,
and then you're just telling thecharity where you want that
charity to send the money to, toanother charity, um yeah, so
that's why you get the taxwrite-off right away is because
you effectively have donated itto charity right at that time.
Exactly, exactly.
Those dollars aren'ttechnically owned by you anymore
(12:01):
.
They're owned by the charityand you're just giving.
The charity is just giving youthat's why it's called a donor
advised fund advisory privilegesof where you want to donate
those dollars.
Sam Maule (12:11):
So when did you found Chariot Kind of walk us back
through that story of actuallysetting the company up and the
inspiration for that?
Salomon Serfati (12:20):
I always love that yeah, so I was, um, I was
at blackrock and a lot of myfriends were like bane, like I
had graduated from upenn twoyears prior, uh, studying
computer science.
And I had a lot of friends whoalso thought very critically
about philanthropy and alsodonated some percentage of their
income to charity and we weretrying to get our friends to use
(12:45):
separate accounts for theirphilanthropic giving.
We knew, we knew that once youseparate, we had the hypothesis
that if you set up a separateaccount and deposit money into
that separate account and givefrom that separate account, a
lot of positive things wouldcome out of that.
Right, for example, we did thatwith like a group of 30 friends
(13:06):
.
We encouraged all of them toset up a separate account,
deposit some money into it andgive it from there and we
noticed three main thingshappened right.
First, when you have a separateaccount for charity, you stop
seeing philanthropy as anexpense but rather as an
investment.
If I ask the average American,can you donate to American
Cancer Society?
They're like, okay, like I caneither go to dinner tonight and
(13:30):
spend $50 or I can donate $50.
They see it as an expense andit's always reactionary.
You have to ask someone to giveand then they give.
When you set aside a portion ofyour income to charity, now
someone asks you, can you giveto American Cancer Society?
They're like, oh, I have $1,000set aside, sure, I'll give $50.
It doesn't hurt anymore to give.
That was step one.
(13:50):
Step two was, since people nowhad a pool of capital that they
knew had to go to charity, theystarted to ask this very
critical question, which is likewhere should I give?
Before that question never cameup.
It was always reactionary.
Someone asked you to give andyou gave, and that's how you
decided where you were going togive.
Now that you have a pool ofcapital set aside, it's like you
(14:12):
ask this critical question ofwhere, which brings to.
The third point is that peoplebecome more intentional about
their giving.
They actually care who is beingmost effective?
Which nonprofit aligns with mymission, with my values?
You started getting into likethe rabbit-hole.
Effective altruism, value-basedgiving and all those things are
things that humans, like mostpeople, don't think about.
(14:34):
But once you have a separateaccount for charity, you do
start to think about it.
So I was at BlackRock and wewere sort of experimenting with
that and getting our friends toadopt these types of accounts
and we realized that if you hada donor advised fund, it was
very disconnected from theonline ecosystem.
So you go to any non-profit'swebsite.
(14:55):
When we started the company,you can very easily donate with
credit card or PayPal to afriend's marathon a campaign,
but you couldn't donate with adonor advised fund.
It was disconnected from likeonline giving, and so we we
asked ourselves what would ittake to create a payment option
that called DAF pay that allowsyou to donate via your donor
advised fund directly from anonprofit's website.
(15:17):
And that's how I like the ideafor Cherry began and that's when
we got started.
Sam Maule (15:23):
Yeah, my day job.
I work for a payments company,so moving money.
And so I honed right in on theDAF pay side on your website.
So I love the idea of thatdashboard too that you have, so
you can see the balance and easyboost options.
In that you talked about thedifference between using daft
pay and without it, because itlooks like without it it's more
(15:44):
of a.
I'm using my credit cards withthat pay, as you can actually
pay in the moment of inspirationis what you call it which I
really like.
So all of that done through theapp, right?
Salomon Serfati (15:54):
exactly, exactly, and you can think of it
as a payment option.
You go to your friend'scampaign If your friend's trying
to raise $10,000, let's say onGoFundMe and now you can
actually donate via your donoradvice fund and the thermometer
goes up.
All that nice stuff happens andyou can give finally, via
inspiration from your DAF.
(16:15):
You don't have to go throughall the hoops and steps to
actually submit that donationfrom your portal.
Maia Bittner (16:21):
Well, yeah, I was going to say the way that I
donate from my DAF today is Ilog in to where my DAF is.
I search for the charity that Iwant to donate to.
I find it in all of the optionsand things that have similar
names and then I say how much Iwant.
I just click it.
I don't actually know whathappens next.
It says, like great, we've sentthem $100.
(16:41):
My suspicion is that it iscutting and mailing these
charities a check, but I'm notactually sure.
The mechanics of money movement.
That happens on the other side.
Salo, do you have any coloraround how that happens today?
Salomon Serfati (16:57):
Yeah, so there's two things for any
payment, right.
There's the initiation of thepayment and the settlement,
right.
So two things.
Once you went to that charitybest portal and you click donate
, imagine you wanted to donateto your friend's campaign on
GoFundMe and you want the goalto go up, there's no way that's
going to be connected with theinitiation of payment on
(17:17):
GoFundMe.
That's why you need DAF pay onthe GoFundMe side and then you
get thanked by the nonprofit.
They can build a relationshipwith you.
All that happens on theinitiation side.
On the settlement side, whichis how the money actually moves,
every DAF is a little different.
A lot of DAFs are cuttingchecks.
They're sending a check to thenon-profit you selected based
(17:38):
off, uh, the mailing addressthey get from the irs.
Um, yeah, exactly so that's howa lot, of, a lot of daft
providers send payments todaybecause I mean there's a lot of
money moved from through daftstoday, right, well, they
actually have this on thewebsite $230 billion sitting in
(18:00):
DAFs.
Sam Maule (18:01):
And I feel like a moron because, again, unlike
Maia, I really hadn't paidattention to this $230 billion.
So yeah, Maia, I think there'sa little bit of money that's
moving around here.
Salomon Serfati (18:13):
Yeah, and donor advised funds before they were
used.
I think a common misconceptionis that donor advised funds are
only used by ultra high networth individuals.
That was probably true, like 10years ago, where people would
open up a donor advised fundmaybe instead of a foundation.
Now all the major providershave lowered their minimums to
(18:37):
zero dollars, so anyone can openup a donor advice fund, and
amazing tech players likecharity vest and daffy have come
to the market that allow you toopen up a daff, just like a
acorns account, for example.
Um, so it's very, very easy.
It's becoming more accessible,which is now why, like, anyone
can open them up, and it's notjust high net worth individuals
(18:57):
who are using these accounts.
Sam Maule (18:59):
You've also opened up integration, if I'm looking at
this right no-transcript.
Salomon Serfati (19:05):
Exactly so, like, for example, I gave the
example of GoFundMe we launchedwith them, like last month.
Now any GoFundMe page that'sraising money for a nonprofit,
you'll see DAF pay there and sowhere we work with fundraising
platforms so that very quicklywe got distribution to the
nonprofits payment pages missingsaw.
Sam Maule (19:32):
Yeah, well, one thing that I really like I see this
is a coming soon.
You have the daf academy forpeople like me, which didn't pay
attention.
If I've seen this right, youget an eight-part curriculum
that's coming up, because itdoes sound like there's a gap in
educating folks on actuallywhat this is and how they can be
used.
Salomon Serfati (19:44):
That really smart move yeah, we're trying to
educate people on two sides.
So we like to say that anytimeyou go to donate in the future,
you're now going to see a newpayment option called DAFE, and
if you don't have a donoradvised fund, you may click that
and want to learn more.
So we have a section in ourpayment flow that allows you to
put in your email and then, onceyou put it in, we ask you to
(20:07):
select another payment methodbecause we don't want you to
forget to donate.
So we ask you to donate viacredit card etc.
And then we email youadditional information about
what donor advised funds are andwhy you should open one up, and
by doing so, we're educatingthe donor on what these accounts
are, so more people open them.
At the same time, we have toeducate nonprofits about what
(20:27):
these accounts are, because alot of times, some nonprofits
are not familiar with thesetypes of accounts, even though
they now represent 17 percent ofphilanthropy and growing.
They're the fastest growingvehicle in philanthropy.
So that academy you werementioning is a series that
we're putting together fornonprofits for to make sure that
they know why they should doeverything they need to do to
(20:48):
make sure that donor advisedfund donors can easily give to
those organizations.
Maia Bittner (20:53):
Okay, I always got to ask.
And then, how does Chariot makemoney?
Salomon Serfati (20:58):
So we charge a processing fee, just like credit
cards.
We charge around 2.9%.
If nonprofits prefer to lowerthat processing fee, they can
pay an annual plan for us.
So we give nonprofits thoseflexibilities.
Sometimes nonprofits say I onlywanna pay as I go.
If I get a donation I'll pay,I'm happy.
(21:20):
And sometimes nonprofits sayI'd rather not worry about a
processing fee and here's likean yearly fee.
So we offer that flexibility tononprofits depending on their
preference.
That's cool.
We have amazing case studies onour website showing that just
by adding DAF pay when anonprofit adds DAF pay to their
website, for example, pan-massChallenge saw a 60% increase in
(21:41):
DAF gifts, which is verymeaningful for them, and I think
50% of all of total giving wasdriven by.
Of the increase in their givingthis year, 50% of that was
driven because of DAPA.
So just incredible results thatnonprofits can do just by
adding a payment option.
(22:01):
It's pretty simple and that'swhere we're trying to drive to
increase the pie.
Maia Bittner (22:05):
Yeah, I know that, like fundraising with these
just so you're saying thecampaigns and the thermometer
gauges and all those differenttypes of gamification tools has
really exploded online, but theDAFs have kind of been left out.
Since historically you had tooriginate your payment within
the DAFs portal, it was kind oforphaned from all of the
(22:31):
tracking and all the campaignsand all the specific mechanics
that nonprofits use to solicitfunds, and funds for specific
causes and tied to differentpeople.
Salomon Serfati (22:39):
Exactly.
Our world is becomingincreasingly digital.
That's not an unknown fact.
We have TikTok, we haveFacebook, we have everything,
basically, and in a digitalworld, you have to be able to
participate in that, like yourcharitable wallet has to be able
to participate in that.
You can't be expected to leavea Facebook fundraiser go to your
(23:01):
portal, donate and then itnever be reflected on Facebook,
which is inherently a socialnetwork.
Right, it needs to be connected.
Sam Maule (23:09):
I absolutely love the concept of this.
Again, it's one of those things, right, we talk about those.
I hate calling them edge cases,but those use cases that just
make sense when you see how thisis put together.
So, Sal, thank you for that.
Where's the best place forfolks listening to this podcast
to learn more about Chariot, andespecially if they want to
(23:30):
engage with you?
Salomon Serfati (23:31):
Yeah, if you want to learn more, you can
always visit our website.
We have two Chariotgivechariotcom and then
daftpaycom.
You can also always email us atcontactgivechariotcom.
If you are an excellentengineer operations person, if
you're looking to join our teamwe're hiring pretty aggressively
now, so you can email either ofthose emails or submit a
(23:55):
contact form on our website andwe'll be sure to look out for it
.
But, yeah, if you want to joina fast growing team that really
cares about the work we do andis very intentional about how we
can craft a world that's morephilanthropic for the better,
charity is a great place to workAll right.
Sam Maule (24:14):
Well, and for those of you that want to ask Maia
questions about what she's doingwith her DAF, Maia, best place
for listeners to reach out toyou.
Maia Bittner (24:21):
Always Twitter.
Feel free to DM me.
I'm at Maia B.
Would love to chat about yourfavorite charities to donate to.
Sam Maule (24:29):
And I've yet to figure out how you got so much
time to post on Twitter withthose two little kids.
I spent the weekend with threegrandkids and I don't think I
picked up my iPhone once, otherthan to grab it from my
two-year-old's hands as he wasscreaming and running out the
door.
So congratulations, you're verygood at Twitter, Maia.
Salomon Serfati (24:44):
Well, a lot of people would congratulate you,
Sam.
I think a lot of people areaddicted to their phones
nowadays, so not picking it up.
Maia Bittner (24:51):
I'm addicted.
That's the harder part.
Yeah, totally.
Sam Maule (24:55):
I was trying to catch up on the Premier League scores
as my grandson ran out the doorwith my iPhone, so it was a
great moment.
So I've pulled the hip muscleeverybody.
I feel great.
I'm limping and you can't seeit.
If you want to reach out to me,if you have ideas for
additional shows Twitteractually not a bad place Sam
Wall at Twitter.
Everybody, we appreciate yougoing out and giving us a review
, telling your friends about theshow, so we can grow the
(25:17):
audience and learn more abouttopics like DAFs, which are just
fantastic.
Everybody thanks for listeningand we'll see you next week.
Hey everybody, welcome to another episode of
Artificially Intelligent Podcast.
This is brought to you by ourfriends at Money 2020.
I'm Sam Maule, one of yourhosts, and what do we call
ourselves?
Maia?
Perpetual interns.
Maia Bittner (00:18):
Oh yeah, the interns here to constantly keep
learning.
We are eager, we are withcoffee and ready to learn
something new.
Sam Maule (00:29):
Always with coffee, always with coffee, I agree.
So my little life update on myend I now have.
Every single child hasgraduated from something.
My son has now graduated fromhigh school.
My daughter has graduated fromcollege.
I'm done, thank you.
Maia Bittner (00:47):
Just one more kid to get through college.
You've been listening to a lotof inspiring graduation speeches
.
Sam Maule (00:52):
I have slept through several inspiring graduation
speeches, so I'm good to go.
How's life on your end?
Maia Bittner (00:58):
You're breaking my heart.
I just spoke at a graduation.
I saw that, so I assumeeveryone was on the edge of
their seats, paying lots ofattention to all of the wisdom
that I have to impart to thesenew college graduates.
Sam Maule (01:15):
I believe yours was at your alma mater.
Maia Bittner (01:17):
Yes, it was Franklin W Olin College of
Engineering.
Full circle there.
Well, speaking of charitieslike and non-profits, and things
that you donate to um sam,we've got here today Salo S
surfati, who is the CEO andfounder of chariot .
Sam Maule (01:42):
Welcome to the podcast thanks for having me
very excited and this is and,Maia, this is like a perfect
opportunity for you and I,because, sol, I'm going to be
honest, I don't know anythingabout donor advised funds
nothing, zero, zilch.
And this is what Maia and Ithis is the reason we put the
podcast together was I don'twant to call them edge cases,
(02:03):
but this is a chance, for I'vebeen in the industry 30 years
now in banking and fintech.
I love that.
I keep learning new stuff.
Maia, I've never heard of a DAF.
Do they call them DAFs?
Sal?
Salomon Serfati (02:15):
Yeah, DAFs is the people who have them.
Call them DAFs Exactly.
Sam Maule (02:19):
I love that.
See, there you go, Mai maya,another one.
Maia Bittner (02:22):
There's actually a fun startup called DAFI.
Sam Maule (02:25):
Seriously Well, but that isn't yours right, Sal.
Salomon Serfati (02:29):
No, and DAFI actually stands for Donor
Advised Fund For you.
Maia Bittner (02:35):
Oh, I didn't know it had a whole acronym, so let's
start there.
Can you give us the high leveloverview of what is a DAF?
Why do people have them?
What use are they?
Salomon Serfati (02:47):
Yeah, so a DAF or donor advised fund is.
You can think of it as aseparate account you have
specifically for charity.
So there's a lot of reasons whypeople would open them up.
But in its most simplest form,it's a savings account you have
with any major banking providerwhere you keep your charity
(03:07):
dollars there.
Why do people open them?
So there's a lot of reasons.
Maia Bittner (03:11):
Why do I want a separate?
Open them.
So there's a lot of reasons.
That's insane.
So why?
Why do I want a separateaccount for charity?
Salomon Serfati (03:14):
There's a lot of reasons.
One of them, and it's the mostobvious one, is the tax benefits
.
So you actually get a taxreceipt or a tax deduction when
you deposit money into thisaccount.
Got it?
Maia Bittner (03:27):
Does that make it easier to time when I want my
tax deduction for donating tocharity?
Salomon Serfati (03:33):
Precisely so you can deposit however much
money you want up front.
You get that tax receipt andover your lifetime you can
decide where you want to donatethose dollars.
Where the tax advantages becomevery great is when you have
capital gains anything withcapital gains, unrealized
capital gains.
So let's say you have, likeApple stock that appreciated a
(03:54):
lot.
You can actually transfer yourApple stock.
You get a tax receipt for thefull value of that stock and
then you can decide where todonate all those dollars.
So you never have to paycapital gains on the stock
because it sits in a DAF andanything in a DAF has to go to
charity.
Sam Maule (04:11):
Did I look this up right, so I want to make sure I
got this right.
You and your fiance set a DAFup for a community fund so it
could be dedicated to financingweddings for those who can't
afford them.
Is that right?
Is this the same?
Salomon Serfati (04:24):
song.
It's the same.
That was like we opened up aDAF for a specific event or a
specific cause.
You're also able to do that, um, so a lot of people can donate
into a fund.
Everyone gets a tax receipt fordonating into the fund and then
you can decide like as amanager of the fund, you can
decide what charities to donatethat money to.
(04:45):
So it's almost like followcrypto, right right, it's like a
DAO in a way.
Right yeah, which is very cool.
But you can have a personal DAFthat only you deposit money
into and you decide where to go.
You can have a family DAFthat's a very popular structure,
whereas a family, you can sayeveryone deposits some money
into this account and as afamily, we decide where we want
(05:09):
these dollars to go, to whichphilanthropic causes, and it
really brings the familytogether.
Sam Maule (05:14):
All right, I want you to be honest.
Was this your idea, or yourfiance's, to set up the
community?
It was both.
Salomon Serfati (05:21):
I said we should do it.
She pushed it forward and itwas really beautiful, right?
Because we got to enjoy a nicelike a really nice wedding.
We were very happy and when youknow that around the world
people can't afford one, and ifwe can give some of that
happiness that we felt at ourwedding to other people to
experience as well, we wanted topush that forward.
Sam Maule (05:43):
No, I absolutely love it because I was at Google for
a while.
So there's always this thingabout eat your own dog food
Right it's.
You have these great ideas.
You actually use them.
Salomon Serfati (05:56):
And the fact that you did that around such an
important life event.
I absolutely love that.
Yeah, I actually started usingdonor advised funds way earlier
in my life.
So I have, I have a principlewhere I donate 10% of my income
to charity and I've been doingthat since like middle school.
So when people would give mebirthday gifts, I would say,
okay, what's 10% of the birthdaygift and I would make sure I
would give it to charity and Iwould keep track of that on like
(06:17):
excel spreadsheets and likethat's how I would keep track of
it throughout my life.
But when I got my firstfull-time job at BlackRock I was
a back-end engineer it becamelike too messy to keep track of
it all in an Excel spreadsheet.
So we realized that's when Istarted learning about donor
advised funds and I'm like, wow,they're literally a separate
account.
You can have that.
You can automatically deposit10% of your income to that
(06:39):
account and you know that by lawyou have to donate those
dollars to charity.
So it's as if you've almostalready given them.
And that's when I started touse them and some of like my
friends that, and that's how weeventually started Chariot, our
company, and I want to likeemphasize on.
That's like another reason why alot of people have donor device
funds.
It's not just for the taxproperties.
(06:59):
A lot of them have them.
A lot of people have them asjust a separate account, like
organizationally, because theyknow they have some principle or
they have some motivatingfactor that they know that they
want to donate to charity.
So separating that out andholding yourself to that goal is
another big motivator forpeople to have these accounts.
And the stats show it.
(07:20):
Because 50% of deposits intoDAFs are by cash, which is like
not the efficient way if youwant it to be tax efficient.
But the fact that 50% ofdeposits are by cash is because
not everyone who uses these areusing these accounts for tax
reasons.
Sam Maule (07:34):
I 100% get this, and I don't know if I ever told you
this, and so I'm interested inwhat motivated you to do that
when you were young.
But I grew up with a mother whohad multiple sclerosis, so it
was absolutely handicapped.
You know, I was 10 years oldand my life turned upside down,
so I have been donating to themultiple sclerosis society for
my entire life.
(07:54):
Just a given.
I don't even think about it.
It's just something you do, soI'm just assuming you have
incredible parents who taughtyou those values and got you
interested in doing that.
But now I wish I'd known aboutDAFs much earlier, because this
is something that I personallydo.
Salomon Serfati (08:13):
Yeah, I would say it came from parents school,
like a sort of like a moralobligation.
I would say that I alwaysquestioned why people spend a
lot of money on very expensivethings that they can get for
cheaper, instead of helpingother people out.
And I always realized thatthat's a hypocritical thought
(08:36):
because, like I used to likegoing to basketball games, for
example, but I could watch it onTV and the difference of the
money spent I could have donatedit.
So I found that the mostefficient model is actually a
percentage of your income andfulfilling some moral
responsibility to give back,because we're all born with,
like you know, like a lotteryticket to some respect, right.
(08:58):
Because we're all born with,like you know, like a lottery
ticket to some respect, right.
And because that percentage ofincome, if you can strive to
make more money like acapitalistic structure and
you're just going to be givingmore as a result, so you're
taking more but also giving more.
So percentage always workedwell in my mind.
Maia Bittner (09:12):
I love that.
Yeah, I have a DAF.
It is with another startupcalled CharityVest, and one of
the things that I also likeabout.
Well, I think most DAFsinfrastructure the most.
Most companies support this.
I can invest the money in my DAFand so it actually has the
potential to grow.
(09:32):
So I put in money or I donatestock or whatever has the
potential to grow in size, andthen I can choose to donate it
to charity whenever I like.
I also just heard about thisreally interesting concept,
which is people who aresupporting using your DAF to
invest in venture capital andthen hopefully making big
(09:58):
returns, and then, of course,all of the money that you make
on of those investments getsdonated to charity.
And I think there's a lot ofpeople who are sort of more
comfortable with that as theirfirst entry into private
investing, but I thought thatwas a really, really interesting
idea is using this money thatyou've set aside for charity,
(10:20):
placing risky bets and then,hopefully, it you know 10xs or
100xs and you have a lot moremoney to donate charity at the
end.
Salomon Serfati (10:29):
Yeah, it's an incredible tool in the sense
that the money you put in is notgoing to lose its value to
inflation.
As you take time to figure outwhere you want to donate those
dollars, you can be veryflexible as to how that money
grows.
The important piece is that themoney is not technically yours
it's owned by a non-profit.
That's how you get the taxreceipt up front.
(10:50):
So whatever money that moneymakes must go to charity, and
you can never take it back um,so that's an important thing.
And if charity is defined as a501c3 um organization by the irs
, so it's a public charity andthen is a daf itself a charity.
Maia Bittner (11:11):
I think I was looking at setting up a nimcrut,
which is a charitable remaindertrust um, with a beneficiary
being my daf um, so that then Icould send the charities that
exactly it goes over.
So is that is it?
Is it considered a charity?
Salomon Serfati (11:28):
functionally, a daf is a charity.
Um, what you're doing when youdeposit money into a daf?
Maia Bittner (11:33):
you're giving your money to a charity and then it
is a charity and your account itlooks like it's a charity that
picks exactly, exactly.
Salomon Serfati (11:41):
You're putting your money into a charity, um,
and then you're just telling thecharity where you want that
charity to send the money to, toanother charity, um yeah, so
that's why you get the taxwrite-off right away is because
you effectively have donated itto charity right at that time.
Exactly, exactly.
Those dollars aren'ttechnically owned by you anymore
(12:01):
.
They're owned by the charityand you're just giving.
The charity is just giving youthat's why it's called a donor
advised fund advisory privilegesof where you want to donate
those dollars.
Sam Maule (12:11):
So when did you found Chariot Kind of walk us back
through that story of actuallysetting the company up and the
inspiration for that?
Salomon Serfati (12:20):
I always love that yeah, so I was, um, I was
at blackrock and a lot of myfriends were like bane, like I
had graduated from upenn twoyears prior, uh, studying
computer science.
And I had a lot of friends whoalso thought very critically
about philanthropy and alsodonated some percentage of their
income to charity and we weretrying to get our friends to use
(12:45):
separate accounts for theirphilanthropic giving.
We knew, we knew that once youseparate, we had the hypothesis
that if you set up a separateaccount and deposit money into
that separate account and givefrom that separate account, a
lot of positive things wouldcome out of that.
Right, for example, we did thatwith like a group of 30 friends
(13:06):
.
We encouraged all of them toset up a separate account,
deposit some money into it andgive it from there and we
noticed three main thingshappened right.
First, when you have a separateaccount for charity, you stop
seeing philanthropy as anexpense but rather as an
investment.
If I ask the average American,can you donate to American
Cancer Society?
They're like, okay, like I caneither go to dinner tonight and
(13:30):
spend $50 or I can donate $50.
They see it as an expense andit's always reactionary.
You have to ask someone to giveand then they give.
When you set aside a portion ofyour income to charity, now
someone asks you, can you giveto American Cancer Society?
They're like, oh, I have $1,000set aside, sure, I'll give $50.
It doesn't hurt anymore to give.
That was step one.
(13:50):
Step two was, since people nowhad a pool of capital that they
knew had to go to charity, theystarted to ask this very
critical question, which is likewhere should I give?
Before that question never cameup.
It was always reactionary.
Someone asked you to give andyou gave, and that's how you
decided where you were going togive.
Now that you have a pool ofcapital set aside, it's like you
(14:12):
ask this critical question ofwhere, which brings to.
The third point is that peoplebecome more intentional about
their giving.
They actually care who is beingmost effective?
Which nonprofit aligns with mymission, with my values?
You started getting into likethe rabbit-hole.
Effective altruism, value-basedgiving and all those things are
things that humans, like mostpeople, don't think about.
(14:34):
But once you have a separateaccount for charity, you do
start to think about it.
So I was at BlackRock and wewere sort of experimenting with
that and getting our friends toadopt these types of accounts
and we realized that if you hada donor advised fund, it was
very disconnected from theonline ecosystem.
So you go to any non-profit'swebsite.
(14:55):
When we started the company,you can very easily donate with
credit card or PayPal to afriend's marathon a campaign,
but you couldn't donate with adonor advised fund.
It was disconnected from likeonline giving, and so we we
asked ourselves what would ittake to create a payment option
that called DAF pay that allowsyou to donate via your donor
advised fund directly from anonprofit's website.
(15:17):
And that's how I like the ideafor Cherry began and that's when
we got started.
Sam Maule (15:23):
Yeah, my day job.
I work for a payments company,so moving money.
And so I honed right in on theDAF pay side on your website.
So I love the idea of thatdashboard too that you have, so
you can see the balance and easyboost options.
In that you talked about thedifference between using daft
pay and without it, because itlooks like without it it's more
(15:44):
of a.
I'm using my credit cards withthat pay, as you can actually
pay in the moment of inspirationis what you call it which I
really like.
So all of that done through theapp, right?
Salomon Serfati (15:54):
exactly, exactly, and you can think of it
as a payment option.
You go to your friend'scampaign If your friend's trying
to raise $10,000, let's say onGoFundMe and now you can
actually donate via your donoradvice fund and the thermometer
goes up.
All that nice stuff happens andyou can give finally, via
inspiration from your DAF.
(16:15):
You don't have to go throughall the hoops and steps to
actually submit that donationfrom your portal.
Maia Bittner (16:21):
Well, yeah, I was going to say the way that I
donate from my DAF today is Ilog in to where my DAF is.
I search for the charity that Iwant to donate to.
I find it in all of the optionsand things that have similar
names and then I say how much Iwant.
I just click it.
I don't actually know whathappens next.
It says, like great, we've sentthem $100.
(16:41):
My suspicion is that it iscutting and mailing these
charities a check, but I'm notactually sure.
The mechanics of money movement.
That happens on the other side.
Salo, do you have any coloraround how that happens today?
Salomon Serfati (16:57):
Yeah, so there's two things for any
payment, right.
There's the initiation of thepayment and the settlement,
right.
So two things.
Once you went to that charitybest portal and you click donate
, imagine you wanted to donateto your friend's campaign on
GoFundMe and you want the goalto go up, there's no way that's
going to be connected with theinitiation of payment on
(17:17):
GoFundMe.
That's why you need DAF pay onthe GoFundMe side and then you
get thanked by the nonprofit.
They can build a relationshipwith you.
All that happens on theinitiation side.
On the settlement side, whichis how the money actually moves,
every DAF is a little different.
A lot of DAFs are cuttingchecks.
They're sending a check to thenon-profit you selected based
(17:38):
off, uh, the mailing addressthey get from the irs.
Um, yeah, exactly so that's howa lot, of, a lot of daft
providers send payments todaybecause I mean there's a lot of
money moved from through daftstoday, right, well, they
actually have this on thewebsite $230 billion sitting in
(18:00):
DAFs.
Sam Maule (18:01):
And I feel like a moron because, again, unlike
Maia, I really hadn't paidattention to this $230 billion.
So yeah, Maia, I think there'sa little bit of money that's
moving around here.
Salomon Serfati (18:13):
Yeah, and donor advised funds before they were
used.
I think a common misconceptionis that donor advised funds are
only used by ultra high networth individuals.
That was probably true, like 10years ago, where people would
open up a donor advised fundmaybe instead of a foundation.
Now all the major providershave lowered their minimums to
(18:37):
zero dollars, so anyone can openup a donor advice fund, and
amazing tech players likecharity vest and daffy have come
to the market that allow you toopen up a daff, just like a
acorns account, for example.
Um, so it's very, very easy.
It's becoming more accessible,which is now why, like, anyone
can open them up, and it's notjust high net worth individuals
(18:57):
who are using these accounts.
Sam Maule (18:59):
You've also opened up integration, if I'm looking at
this right no-transcript.
Salomon Serfati (19:05):
Exactly so, like, for example, I gave the
example of GoFundMe we launchedwith them, like last month.
Now any GoFundMe page that'sraising money for a nonprofit,
you'll see DAF pay there and sowhere we work with fundraising
platforms so that very quicklywe got distribution to the
nonprofits payment pages missingsaw.
Sam Maule (19:32):
Yeah, well, one thing that I really like I see this
is a coming soon.
You have the daf academy forpeople like me, which didn't pay
attention.
If I've seen this right, youget an eight-part curriculum
that's coming up, because itdoes sound like there's a gap in
educating folks on actuallywhat this is and how they can be
used.
Salomon Serfati (19:44):
That really smart move yeah, we're trying to
educate people on two sides.
So we like to say that anytimeyou go to donate in the future,
you're now going to see a newpayment option called DAFE, and
if you don't have a donoradvised fund, you may click that
and want to learn more.
So we have a section in ourpayment flow that allows you to
put in your email and then, onceyou put it in, we ask you to
(20:07):
select another payment methodbecause we don't want you to
forget to donate.
So we ask you to donate viacredit card etc.
And then we email youadditional information about
what donor advised funds are andwhy you should open one up, and
by doing so, we're educatingthe donor on what these accounts
are, so more people open them.
At the same time, we have toeducate nonprofits about what
(20:27):
these accounts are, because alot of times, some nonprofits
are not familiar with thesetypes of accounts, even though
they now represent 17 percent ofphilanthropy and growing.
They're the fastest growingvehicle in philanthropy.
So that academy you werementioning is a series that
we're putting together fornonprofits for to make sure that
they know why they should doeverything they need to do to
(20:48):
make sure that donor advisedfund donors can easily give to
those organizations.
Maia Bittner (20:53):
Okay, I always got to ask.
And then, how does Chariot makemoney?
Salomon Serfati (20:58):
So we charge a processing fee, just like credit
cards.
We charge around 2.9%.
If nonprofits prefer to lowerthat processing fee, they can
pay an annual plan for us.
So we give nonprofits thoseflexibilities.
Sometimes nonprofits say I onlywanna pay as I go.
If I get a donation I'll pay,I'm happy.
(21:20):
And sometimes nonprofits sayI'd rather not worry about a
processing fee and here's likean yearly fee.
So we offer that flexibility tononprofits depending on their
preference.
That's cool.
We have amazing case studies onour website showing that just
by adding DAF pay when anonprofit adds DAF pay to their
website, for example, pan-massChallenge saw a 60% increase in
(21:41):
DAF gifts, which is verymeaningful for them, and I think
50% of all of total giving wasdriven by.
Of the increase in their givingthis year, 50% of that was
driven because of DAPA.
So just incredible results thatnonprofits can do just by
adding a payment option.
(22:01):
It's pretty simple and that'swhere we're trying to drive to
increase the pie.
Maia Bittner (22:05):
Yeah, I know that, like fundraising with these
just so you're saying thecampaigns and the thermometer
gauges and all those differenttypes of gamification tools has
really exploded online, but theDAFs have kind of been left out.
Since historically you had tooriginate your payment within
the DAFs portal, it was kind oforphaned from all of the
(22:31):
tracking and all the campaignsand all the specific mechanics
that nonprofits use to solicitfunds, and funds for specific
causes and tied to differentpeople.
Salomon Serfati (22:39):
Exactly.
Our world is becomingincreasingly digital.
That's not an unknown fact.
We have TikTok, we haveFacebook, we have everything,
basically, and in a digitalworld, you have to be able to
participate in that, like yourcharitable wallet has to be able
to participate in that.
You can't be expected to leavea Facebook fundraiser go to your
(23:01):
portal, donate and then itnever be reflected on Facebook,
which is inherently a socialnetwork.
Right, it needs to be connected.
Sam Maule (23:09):
I absolutely love the concept of this.
Again, it's one of those things, right, we talk about those.
I hate calling them edge cases,but those use cases that just
make sense when you see how thisis put together.
So, Sal, thank you for that.
Where's the best place forfolks listening to this podcast
to learn more about Chariot, andespecially if they want to
(23:30):
engage with you?
Salomon Serfati (23:31):
Yeah, if you want to learn more, you can
always visit our website.
We have two Chariotgivechariotcom and then
daftpaycom.
You can also always email us atcontactgivechariotcom.
If you are an excellentengineer operations person, if
you're looking to join our teamwe're hiring pretty aggressively
now, so you can email either ofthose emails or submit a
(23:55):
contact form on our website andwe'll be sure to look out for it
.
But, yeah, if you want to joina fast growing team that really
cares about the work we do andis very intentional about how we
can craft a world that's morephilanthropic for the better,
charity is a great place to workAll right.
Sam Maule (24:14):
Well, and for those of you that want to ask Maia
questions about what she's doingwith her DAF, Maia, best place
for listeners to reach out toyou.
Maia Bittner (24:21):
Always Twitter.
Feel free to DM me.
I'm at Maia B.
Would love to chat about yourfavorite charities to donate to.
Sam Maule (24:29):
And I've yet to figure out how you got so much
time to post on Twitter withthose two little kids.
I spent the weekend with threegrandkids and I don't think I
picked up my iPhone once, otherthan to grab it from my
two-year-old's hands as he wasscreaming and running out the
door.
So congratulations, you're verygood at Twitter, Maia.
Salomon Serfati (24:44):
Well, a lot of people would congratulate you,
Sam.
I think a lot of people areaddicted to their phones
nowadays, so not picking it up.
Maia Bittner (24:51):
I'm addicted.
That's the harder part.
Yeah, totally.
Sam Maule (24:55):
I was trying to catch up on the Premier League scores
as my grandson ran out the doorwith my iPhone, so it was a
great moment.
So I've pulled the hip muscleeverybody.
I feel great.
I'm limping and you can't seeit.
If you want to reach out to me,if you have ideas for
additional shows Twitteractually not a bad place Sam
Wall at Twitter.
Everybody, we appreciate yougoing out and giving us a review
, telling your friends about theshow, so we can grow the
(25:17):
audience and learn more abouttopics like DAFs, which are just
fantastic.
Everybody thanks for listeningand we'll see you next week.
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