Even when they are not the breadwinners, women tend to make many of their households’ financial decisions, including charitable giving. And with the impending great wealth transfer, in which women in particular are expected to inherit trillions upon trillions of dollars, that could have profound effects on charitable giving throughout the country in the near future.
That’s according to Margaret Richardson, GoFundMe’s chief marketing and corporate affairs officer, who spoke in late June about the company’s newest product launch.
According to Richardson, women are busier than ever. And while they can and have managed many of these household tasks, many are also looking for ways to make managing their finances more seamless.
“Women are often the charitable decision makers already in their families, and we see that that trend just continuing as women have more resources and more responsibilities,” says Richardson.
That is one of the reasons GoFundMe has launched its newest product, one it hopes will make charitable giving easier and more impactful — and attract some of those trillions. Called Giving Funds, it is a type of donor-advised fund that will allow users to contribute to the charitable investment accounts right on GoFundMe’s site.
Donor-advised funds, or DAFs, are growing in popularity. They are tax-advantaged accounts for charitable giving, in which lump sum or automated recurring contributions can be invested; eventually the contributions and gains will go to charity, and they grow tax-free. It can be helpful to think of DAFs as similar to a 401(k), health savings account, or 529 account. Money contributed to a DAF cannot be taken back, it is effectively a charitable contribution and donors are generally eligible to take an immediate tax deduction.
The benefit is that you can donate now, get that tax deduction now (if you itemize), invest the funds, and then have more to give in the future, among others. GoFundMe is partnering with fund managers like BlackRock, State Street Global Advisors, and Vanguard to advise on the investment options, which are a number of exchange-traded funds.
Though plenty of financial institutions offer DAFs, Richardson says the benefit of doing it on GoFundMe is that users will have all of their charitable giving centralized, and receive one annual tax document. There are no management fees and no minimum balances, and users can give their funds to any of the 1.4 million charities on the platform.
Only 1 Percent Using Them
Despite their tax benefits, DAFs are still fairly niche products — only about 1% of Americans use them, says Richardson, though an increasingly larger share of the U.S.’s total annual charitable contributions stem from them with each passing year.
But a site like GoFundMe offering them could be the start to broadening their appeal — after all, the site has some 200 million users from all income levels, races, and genders. It could be many peoples’ first exposure to the investment tool.
And, she says, it makes it easier for people to plan ahead. Many users come to GoFundMe after a natural disaster or other event to find causes to donate to. If they already have a pot of money waiting there that they previously donated — and that has possibly grown as it was invested—it can make all of their charitable giving more seamless.
“This could be a really efficient and effective way for people to get [funds] out the door quickly when organizations need it most,” she says.
This article was first published in Fortune and provided by Reuters.
