MSC Launches a Donor Advised Fund Program

In late 2023, MSC launched the Movement Strategy Center Donor Advised Fund (DAF) program, allowing individuals, families, companies, private foundations, trusts, and other entities to invest their assets toward building community wealth and power for leaders on the frontlines of racial, gender, and environmental justice movements.

For those who don’t know, a DAF is a charitable investment giving vehicle that allows donors to fund their accounts by making charitable contributions, receive an immediate U.S. income tax deduction, and recommend grants over time. In 2022, DAF assets were valued at $228.89B, with contributions increasing by 9% over the previous year, and $52.16B disbursed in grants from DAFs. Traditionally, these are mostly commercial DAFs that compound wealth within corporate institutions where DAF advisers are incentivized to increase the value of assets rather than rapidly disbursing cash to communities in need. And therein lies the problem — these charitable funds “have been used as a vehicle for wealth hoarding and virtue signaling while retaining all control over decisions about where philanthropic dollars go.”

But MSC’s program upends everything you think you know about Donor Advised Funds. MSC has envisioned a radical new approach that unleashes the true potential of DAFs and honors intent and partnership between donors and the causes they support. MSC’s DAF model supports more equitable and inclusive giving to historically excluded communities, and moves short and intermediate term catalytic capital investments directly to the grassroots. Crucially, members of the MSC DAF community commit to a minimum distribution from their DAFs of 25% annually in recommended grants while being encouraged to use their full fund for giving and investing, thereby guaranteeing a high level of deployment and mobilization for impact.

MSC’s DAF program was launched amid feedback from supporters like Chad Dyer, an aspiring capital activist and longtime supporter and partner of MSC. Dyer likens an MSC DAF to an “easy button” that allows donors to leverage their money and advance change without having to figure out “some new thing that nobody ever thought of; it’s not about starting another foundation.”

He acknowledges “there are smart people who’ve been doing this much longer than me … [MSC] has experience, they’ve been doing this a long time, they’re also very welcoming and open and not using their expertise as a way to exclude people.” In other words — as an organization with a history that spans nearly a quarter century, MSC has the credibility, tools, and partnerships in place to help get this critical funding to communities and organizations that are working, every day, to support a more equitable society.

Having made a commitment to the Good Life Pledge together with his wife, Dyer underscores that MSC has “an opinionated view of what transformation looks like, and if this view of a just world resonates with you, then [they] can help you support it. This goes across birth justice and racial justice and economic justice and climate justice; MSC will help you accelerate a Just Transition.”

In contrast to traditional DAFs, MSC’s program presents a number of solutions to some of the challenges that philanthropists and impact investors encounter when looking for deeper impact and more meaningful engagement. Traditional commercial DAFs leave the responsibility of figuring out how best to fund transformative change to donors — which can be overwhelming. MSC, however, brings years of social transformation experience, perspective, insight, and community accountability to the equation and applies a justice lens to our DAF investment policy, disbursals, and operations that actively mitigate barriers to those who have historically limited access to philanthropy.

Additionally, donors can feel limited in their impact if their cash sits in a traditional DAF account. MSC encourages DAF donors to advise distributions in a way that rapidly moves funds out to organizations and movements that address and combat societal inequities. To facilitate such movement of funds, MSC applies a 25% minimum annual distribution requirement to all DAFs, and encourages donors to advise annual distributions beyond the applicable minimum. This 25% threshold is inline with grant payout rates among DAFs at other single-issue charities comparable to MSC — according to National Philanthropic Trust’s 2023 DAF Report, such average grant payout rates between 2018 and 2022 were 31.4%.

Meanwhile, the fees charged by typical DAFs can often feel misaligned, supporting financial institutions rather than a Just Transition. Not at MSC, where DAF fees amplify our transformative work as a trusted, BIPOC-led, community-accountable steward of the progressive movement ecosystem. All fees are fully aligned with the change donors are working to catalyze by supporting innovation and infrastructure for our activist partners.

Finally, and most significantly, donors can feel their experiences of traditional DAFs can be transactional and unfulfilling. At MSC, DAF donors will have relational access with movement leaders, ecosystem stewards, other capital stewards, community stewards, and communities. And, to better support donors in achieving their philanthropic goals, MSC and our capital partners will provide programming for DAF donors that will shed light on equitable grantmaking strategies and provide updates from MSC grantees. MSC will truly allow donors to be a part of the impact journey.

Whereas MSC is not a registered investment advisor, asset manager, or tax advisor, we are delivering cutting edge solutions by forging powerful capital partnerships with leading organizations that are committed to investing in justice and building community wealth. Partnerships with Full Spectrum Advisors and Adasina Social Capital help us steward both public and private market investments within our DAF ecosystem, enabling donors to advance a full spectrum capital approach — aligned with their passions and investment goals — to drive impact through grants, recoverable grants, loans, guarantees, and equity investments.

Simone Champagnie, a Chartered Advisor in Philanthropy (CAP®) who joined MSC in early 2024 as our first ever Director of Individual Giving, calls the MSC DAF an “opportunity for philanthropists who desire to move from bystander to activist.” She continues, “in making the decision to open an MSC DAF account, donors are choosing and trusting MSC, our ecosystem, and our partners to be part of their own social justice philanthropy journeys.” Agreeing with Dyer, Champagnie acknowledges “MSC’s commitment to a radical shift in philanthropy” will help donors “realize their vision, activate their resources, and together make impact.”

At the end of the day, the MSC DAF offers a new way of being for capital stewards and community stewards. It allows donors access to a vetted ecosystem of movers and movements, unique programming and educational opportunities, and a way to catalyze change that is bigger than writing a check — it’s a way for donors to be a part of their own impact investing story. As Dyer tells it, the MSC DAF program is “about getting into community with other capital stewards who are on similar paths and getting into relationships with communities in a way that is very reciprocal — shared liberation versus the hierarchical aspects of traditional philanthropy.” For him, being a part of MSC’s DAF “can solve this almost spiritual problem facing capital stewards.”