Powering innovation in giving: how Atomic helped Daffy expand investment choices

When Daffy, the Donor-Advised Fund for You™, launched in 2021, they set out with a mission to help people be more generous, more often. The goal was to build a seamless web and iOS app experience that helps members easily set money aside, allow it to grow tax-free, and donate to more than 1.5 million charities.

A donor-advised fund (DAF) is a tax-deductible financial account for the sole purpose of charitable giving. Like a 401k for retirement or a 529 plan for college, a DAF is a special type of financial account dedicated to charity. But unlike retirement plans and college plans, donor-advised funds to date have been almost exclusively marketed to wealthy individuals who have the support of financial advisors or accountants. Why? Largely because the business model for the largest DAFs in the country is simple — they charge a fee on top of the assets they manage. Given their business model, these firms have chosen to focus on large accounts of $100,000 or more, which is not realistic for the average person. The team at Daffy saw an opportunity to leverage technology to bring the DAF back to its originally intended goal: to help make it easier for all people to give to charity.

At launch, Daffy already had brokerage partners that facilitated a set of portfolios that members could choose for their contributions to be invested in and potentially grow tax-free. Recognizing the need for greater flexibility and choice, it was a critical priority to offer additional investment options. They also required a powerful API so that their engineering team could effectively build for scale.

In 2023, Daffy partnered with Atomic to meet those needs and more. Daffy was able to leverage Atomic’s investment advisory services to build and launch a number of new portfolios in a matter of weeks. Alex Gyr, the COO of Daffy, explained:

“As a fast-moving startup, we are always looking for big wins that we can execute quickly. Partnering with Atomic allowed us to launch a new set of portfolios for all our members, without months of development work.”

Having successfully rolled out a first implementation, the Daffy team was confident that they could work together with Atomic to drive even more innovative solutions for their members. Daffy already offered members an industry-leading set of 15 different portfolio options including Conservative, Standard, ESG, and Crypto. Then they wanted to offer custom portfolios so individual donors could tailor their portfolio to match their unique giving goals and maximize their charitable impact.

Gyr said, “When we asked our members what we could do to encourage them to put even more money aside for charity, one of the most common requests was more options for investing their contributions. By working with multiple partners, we were able to ship quickly with the best solution."

Daffy and Atomic committed to bring this innovation to life. In July of 2024, Daffy launched their Custom Portfolio feature with resounding success. Members have raved about the newfound ability to exercise their advisory privileges in a more nuanced and customized way. In total, Daffy now supports over 460 ETFs on the platform. Members can propose a portfolio of up to 10 ETFs, starting with an existing Daffy pre-approved portfolio and then modify the investments in the portfolio and the percentages allocated to each investment down to 1% increments.

“We started the partnership with a pretty simple plan to add an additional custodian to our feature set. As the team was able to put more work and prioritization around it, we rolled out this much more complex and exciting feature with the launch of customized portfolios.” - Alex Gyr, COO Daffy

Daffy serves as a great example of how Atomic enables partners to innovate and grow together over time. In 2024, Daffy members set aside over $198 million for charity, and donations from Daffy rose by 311%. Daffy expects that custom portfolios will unlock even more giving, helping America get closer to a potential $1 trillion increase in giving over the next decade.

To learn more about partnering with Atomic, simply submit this form or contact us at partnerships@atomicvest.com.

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