Daffy Charitable Fund Member Agreement
Updated May 2022
- ABOUT DAFFY CHARITABLE FUND
- MEMBERSHIP
- CONTRIBUTIONS
- TAX CONSIDERATIONS
- INVESTMENT OPTIONS
- DONATION RECOMMENDATIONS
- REGULATORY AND GOVERNANCE
Terms and Conditions
This Agreement outlines the policies, procedures, rules, and restrictions associated with opening and maintaining Daffy donor-advised fund accounts. Member participation in Daffy is subject to these terms and conditions. In engaging with Daffy and Daffy donor-advised fund accounts, members agree to accept and be bound by this Agreement. Subject to IRS rules and guidelines governing DAF operations, Daffy reserves the right to modify or change this Agreement at any time for any reason. In the event of modifications or changes, Daffy will update the Agreement on the Daffy website, https://www.daffy.org. Members are responsible for periodically reviewing this Agreement to be informed of updates.
About Daffy Charitable Fund
Mission and Vision
Daffy, the Donor-Advised Fund for You™ is a charitable nonprofit with a simple mission: to help people be more generous, more often.
Our organization is inspired by a compelling vision: a world where everyone regularly puts something aside for those less fortunate than themselves.
Donor-Advised Funds
Daffy, a tax-exempt public charity, is a sponsoring organization that oversees and administers a tax-advantaged charitable giving vehicle known as a donor-advised fund (“DAF”).
- When a donor becomes a member of Daffy, they are assigned a customized DAF account where they may provide recommendations to manage their personal and family charitable giving and all of their activities are separately maintained and accounted for.
- Members may make a contribution to their DAF account at any time. Contributions to a DAF account are unconditional and irrevocable charitable donations to Daffy Charitable Fund, and as a result, members are generally eligible to take an immediate tax deduction for the calendar year when the contribution is made. All contributed non-cash assets are liquidated and the member is not responsible for capital gains taxes associated with such dispositions.
- Members serve as an advisor over their account with the ability to recommend how the account is invested and distributed. Please note, however, that Daffy retains the ultimate authority and control over the assets in the account.
- Donors may choose from several investment portfolios that allow the account to grow tax-free. All investment gains or losses are attributed to the account and the full balance of the account may be donated to charity.
- When a donor is ready to support a charitable organization, they may recommend a donation to any public charity as long as the donation does not violate the donation prohibitions detailed below. Once approved, the donation amount is deducted from the DAF account and the donation is sent directly to the charity in the form of cash. Donations may be attributed to the donor or made anonymously and there is an option to recommend how the donation will be used by the organization. At least one donation must be made every year.
Daffy Charitable Fund
Daffy Charitable Fund (“Daffy”) is a tax-exempt public charity as described in Sections 501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code. Daffy is eligible to receive charitable contributions under IRC Section 170(c). As per IRS requirements, all contributions are irrevocable and Daffy Charitable Fund retains exclusive legal control over all funds held in a Daffy account. Daffy does not provide legal or tax advice and we recommend all members consult a tax professional to assess their specific situation before claiming any income tax deduction.
Membership
Becoming a Daffy Member and Opening a DAF Account
Daffy accounts are only available to Daffy members. New members can join Daffy either through the mobile application available in the Apple AppStore™ or by signing up at daffy.org. Daffy members are asked to provide authentication credentials, as well as personal and financial information sufficient to ensure the safety and security of their own account as well as the Daffy community. This information includes but is not limited to: a member’s name, city of residence, email address, and a link to a bank account, debit card, or credit card. Additional information may be required to authorize transactions depending on the transaction size or its nature.
By becoming a member and opening a Daffy account, members are certifying that they will provide Daffy with accurate and complete personal identifying information and will notify Daffy of any changes. Daffy has the right to verify any information that is provided.
Additionally, members will set up their profile and select their investment portfolio. Members are asked to take the Daffy Pledge or fund their account.
Please note that a username and email address can only access one Daffy account. Members with more than one account, including family accounts, will need to create multiple usernames.
Daffy members have an opportunity to name their account which will be the public name of their donor-advised fund. It will be displayed on their account profile and with charities that are receiving donations from their account. Examples of account names include: “The Doe Family Charitable Fund”, “The Jamie Doe Giving Fund”, and “World Peace Fund”. All account names are subject to Daffy’s Content Policy below. Daffy reserves the right not to approve a name for a Daffy account and may remove or edit the name until the member has an opportunity to update it.
Membership Levels and Dues
Daffy currently offers different levels of membership based on the features selected by each member, as well as the level of support the member provides. This membership is supported by monthly membership dues, as outlined below.
- Daffy Contributors are provided access to their unique Daffy donor-advised fund. Recurring and one-time contributions can be made through a linked bank-account, debit or credit card, or ApplePay™. Additionally, Daffy Contributors are able to contribute up to $25,000 worth of publicly traded stock, crypto, or cash transfers from other donor-advised funds during the lifetime of the account. Daffy Contributors can select between a range of portfolios to invest their accounts including options invested in global stocks, bonds, and crypto assets. Daffy Contributors with less than $100 in their account are not assessed a monthly membership fee.
- Daffy Benefactors are provided access to all of the same features and capabilities as Daffy Contributors, with the added ability to make unlimited contributions of publicly-traded stocks, crypto, or cash transfers from other donor-advised funds.
Daffy reserves the right to modify the features and privileges available to each level of membership, as well as the expected membership dues for each level.
Membership dues are charged directly to each DAF account. If there are insufficient funds in a member’s DAF account, the account will be suspended, and the member will be prompted to contribute additional funds. The account will remain suspended until additional funds are transferred by the member. Daffy reserves the right to schedule a minimum contribution to cover the difference in dues owed.
Account Minimums and Limits
For all inactive accounts, Daffy will make multiple attempts to contact the member with the contact information provided. If the account remains “inactive” for an additional 12 months period, then the account’s Legacy Plan will be enacted and any remaining funds in the DAF account will be distributed accordingly and the account will be closed. If no Legacy Plan is in place, a distribution will be made to a charitable beneficiary or Daffy’s general charitable fund within the sole discretion of Daffy and the account will be closed.
Members are solely responsible for making sure their contact information is up to date and that they can receive email messages from Daffy Support (support@daffy.org).
Recordkeeping
Daffy will provide confirmations of account transactions through the Daffy mobile application, website, or by email. While Daffy maintains these records for active members, members are advised to save these confirmations for their records.
Daffy provides an annual summary of contributions as well as other financial information or reports required by law. Daffy members also have access to investment valuations and performance information through Daffy’s account portals.
If a donor contributes publicly-traded securities or crypto assets, Daffy provides donors with confirmation of the quantity and price of the contribution on the date of receipt, as well as the liquidated value of the contribution to the DAF account. Nevertheless, donors are completely responsible for the value they claim as a deduction on their tax returns.
Legacy Planning
After opening a DAF account with Daffy, members are able to notify Daffy of a successor advisor or a charitable beneficiary for their account (a “Legacy Plan”). Daffy must be directly notified of any successor advisor or charitable beneficiary (testamentary instruments or instructions to an executor, personal representative, or agent will not be accepted). If a member dies, control over the member’s account will pass to the member’s named successor or a donation for the full amount of the account will be made to the member’s charitable beneficiary in Daffy’s sole discretion. However, if there is already an additional member advisor listed on the account, that person will remain as the advisor for the account and the Legacy Plan will not be enacted. A Legacy Plan may be updated at any time by any member associated with an account.
If there are no remaining member advisors on the account and the member has not selected a successor or charitable beneficiary, any remaining balance will be transferred to Daffy’s general charitable fund upon the member’s death.
In the case of an Employer Sponsored Account, an employer may set a default charitable beneficiary subject to Daffy’s approval and review process. The member is able to update their Legacy Plan at any time.
At the time of the member’s passing, if the successor is unreachable, unavailable or unwilling to take responsibility for the account, any remaining balance will be transferred to Daffy’s general charitable fund. Further information on Daffy’s successor advisor procedures is available here: https://intercom.help/daffy/en/articles/6296133-what-is-a-legacy-plan.
At the time of the member’s passing, if the charitable beneficiary is unreachable or no longer operable, or if the terms of the Legacy Plan violate Daffy’s Donation Use Restrictions as described below, any remaining balance will be transferred to Daffy’s general charitable fund. Further information on Daffy’s charitable beneficiary procedures is available here: https://intercom.help/daffy/en/articles/6296133-what-is-a-legacy-plan.
Content Policy
Members have several opportunities to customize their account profile and the information that is sent with every donation to charity. The information provided by members do not represent the views or wishes of Daffy Charitable Fund.
Daffy does not permit content that is unlawful, harassing, inaccurate, libelous, defamatory, obscene, fraudulent, harmful, threatening, abusive, hateful, or is otherwise determined to be objectionable or inappropriate by us. Daffy reserves the right to remove or edit any content on its platform.
Error Policy
Members are responsible for notifying Daffy at support@daffy.org of any suspected errors in their account within 10 days of the error occurring. However, Daffy is not responsible for investment losses that may occur in an account due to an error. Please note that all contributions are irrevocable and may only be distributed to a 501(c)(3) public charity.
Terminating an Account
Members may request that their account be terminated at any time. Members will be given an opportunity to submit their final donation recommendation, subject to the donation restrictions listed below. Once approved, the balance of the account will be sent to the final charity and the account will be closed.
In the unlikely event that a member breaks this Member Agreement, Daffy reserves the right to terminate or lock their account. In the case of such an event, Daffy will distribute the remaining funds to Daffy’s general charitable fund.
Contributions
Members may fund their account by making an unconditional and irrevocable contribution to Daffy Charitable Fund, a tax-exempt public charity as described in Sections 501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code. Members, depending on their individual tax situation, may be eligible to take an income tax deduction for the contribution for the year in which it was contributed. The contributed assets are no longer a part of the individual member’s personal estate and Daffy Charitable Fund retains exclusive legal control over all funds held in a Daffy account. While tax considerations are mentioned within this agreement and on daffy.org, Daffy does not provide legal or tax advice and we recommend all members consult a tax professional to assess their specific situation before claiming any income tax deduction.
By making a contribution, Daffy members certify that the assets they are contributing are completely and solely owned by the member and their spouse, in an account that allows for charitable distributions, and that there are sufficient funds to cover the contribution amount.
Once received and settled all incoming contributions are deposited in the member’s Daffy account. Please note that all non-cash assets are liquidated. Members are not responsible for capital gains tax when the tax-exempt organization sells their contributed appreciated asset. The final deposit into the donor-advised fund is based on the actual sale price of the stock, net of fees (which may not match the value listed on the Tax Receipt - see Tax Considerations below).
All deposits are then invested in the member’s selected investment portfolio. Contributions made to an account remain in that member’s account until a donation is recommended or the account is terminated (as described herein).
Acceptable Contributions
Daffy members may make the following types of contributions to their DAF account:
- Bank transfer
- Debit or Credit Card
- ApplePay™
- Stocks & ETFs
- Crypto (for a complete list of supported coins see https://intercom.help/daffy/en/articles/5594136-how-do-i-contribute-crypto-to-daffy)
- Transfer from an existing DAF
Minimums and limits apply - see Account Minimums and Limits.
Daffy reserves the right to reject a contribution to Daffy at any time for any reason and will return the contribution to the originating source.
Submitting a Contribution
Members should submit all contributions by going to the Add Funds section of daffy.org or our iOS mobile app. For stock, crypto and DAF transfers, members should submit a contribution intent for every subsequent contribution. Please see our FAQs for additional information about our partners that process the contributions, detailed instructions on how to submit stock and DAF Transfer contributions, and contribution timing. Daffy is not responsible for processing delays, errors, or rejections caused by our partners or a member’s financial institution.
Irrevocability
All contributions to a DAF account are unconditional and irrevocable. Once contributions are made to a DAF account, members have advisory privileges and are able to recommend how an account is invested and distributed. However, Daffy retains ultimate control.
Third-Party Contributors
In certain cases, individuals or entities other than the member may make a contribution into a Daffy account. In that case, the originating donor will receive the receipt for the contribution. The member is not able to take a tax-deduction for those contributions. Members must notify Daffy of all third-party contributions before they are made so that the contribution is attributed to the correct Daffy account when received.
Tax Considerations
This information is meant to be educational and should not be construed as tax advice. As always, we recommend consulting a tax professional.
Income Tax Deduction
Members may generally take a tax deduction after making a contribution to a DAF account. Daffy Charitable Fund is exempt under Section 501(c)(3) of the Internal Revenue Code and has an EIN of 86-3177440. This charitable deduction may be used to offset a portion of taxable income; however, the amount eligible for deduction varies depending on a donor’s filing status, income, and contribution made. Donors are only eligible for a tax deduction when making a contribution into a DAF account; donors may not take an additional deduction when a donation is recommended to a charity.
For publicly traded securities owned for more than a year, the IRS defines the Fair Market Value (FMV) to be the average of the high and low price on the date the contribution is effective. Daffy provides this information for the date the contribution was received which may not be the date the member lost control of the assets. All valuations listed are estimates and provided to help support our members in their tax filing needs. These valuations do not represent tax advice and Daffy does not guarantee the accuracy of the valuations provided. Members have full discretion on the date and the valuation claimed as a tax deduction. Generally, securities owned for less than a year may only be deducted at their original cost basis.
Capital Gains Tax and Tax Free Growth
While all unrealized and realized gains are attributed to each individual Daffy account, the member is not responsible for any taxes associated with the investments within the account. This includes the initial liquidation of all contributed non-cash assets. Daffy, as a charitable entity, is generally tax-exempt.
Additional Reporting Requirements
Investment Options
Investment Portfolios
Daffy members can select from a variety of investment portfolios to invest their DAF account assets. These investment portfolios offer members the potential for their gifts to grow tax-free, potentially providing additional funding to the charities of their choice. These investment portfolios have been selected to offer a range of investment characteristics: some portfolios are more conservative, while others are more aggressive. These portfolios also vary based on the composition of investments. Currently, Daffy offers portfolios invested in public market exchange-traded funds (“ETFs”), as well as selected crypto assets, such as Bitcoin and Ethereum. For a complete list of portfolios offered by Daffy currently, please refer to the website: https://www.daffy.org/portfolios.
All investment portfolios are subject to change by Daffy at any time. Daffy will retain full authority and control over the DAF accounts. Daffy does not and will not provide members with investment advice. Investments carry significant risk of volatility, and Daffy does not guarantee that the invested DAF accounts will earn any positive rate of return. Daffy will not be liable for any diminution in the value to DAF accounts, such as losses that may occur from investing in a fund.
Investment Advisor
Daffy may retain the services of one or more investment advisors to assist with the construction of investment portfolio options. However, Daffy is not and will not be acting in the capacity of a registered investment company or a registered investment adviser (as such term is defined by the Investment Advisers Act of 1940 or any state law) or an agent to any member or other third-party customer or client. Further, pursuant to available exemptions under the Investment Company Act of 1940 and Investment Advisers Act of 1940, Daffy qualifies for an exemption from registration as a registered investment company and a registered investment adviser, respectively. Daffy will utilize the services of a registered broker-dealer in connection with the investment of its assets and is not responsible for any system or software failures of any third-party, including such broker-dealer.
Donation Recommendations
Recommending a Donation
Members may recommend a donation at any time after a DAF account has been created and funded. While Daffy does its best to fulfill all member’s recommendations that meet our guidelines, member recommendations are only advisory; Daffy retains ultimate control over the DAF accounts and reserves the right to deny any donation recommendation for any reason. In the event this were to occur, Daffy generally notifies members of a denial of a recommendation within 30 days of the recommendation being submitted. Daffy then permits the member to make a recommendation to an alternative charity or charities or cancel the request. Members may not impose restrictions or conditions on the assets in DAF accounts. Donations that have already been approved and issued cannot be canceled by the member.
Additionally, Daffy members may also include a private note with a donation recommendation that is shared with the recipient organization. This note may be used to convey the member’s recommendation on how the donation is to be used.
Daffy reviews all public and private notes to ensure that all donations adhere to the Donation Use Restrictions listed below as well as our Content Policy above.
Charitable Recipients
Members that wish to donate to organizations that are currently not listed may send them to support@daffy.org. Please include the mailing address, tax ID, and current contact information if possible. Daffy will do its best to contact the organization, verify its tax exempt status, and add it to the database. Daffy is not responsible for unresponsive organizations or organizations that won’t share the proper information necessary to be deemed eligible.
Daffy reserves the right to modify its list of permissible charitable grantees and eligibility criteria at any time for any reason.
Donation Use Restrictions
Donation recommendations may not be made for any non-charitable or improper purpose. Members may NOT recommend donations that:
- satisfy a pre-existing, legally-binding pledge or obligation for their private benefit
- provide more than an incidental benefit to the member, or any of the aforementioned’s family or 35% controlled entity (together, a “Disqualified Person”). Examples include, but are not limited to:
- payment for tuition
- tickets to a gala
- auction items
- certain annual membership benefits offered in exchange for a payment of more than $75
- cover any portion of a donation that would result in anything more than an incidental benefit accruing to a Disqualified Person, even if that portion is deemed tax-deductible by the charity (known as bifurcated gifts). For example, if a non-profit sells a ticket to a fundraising event for $200 and claims that $100 of the donation is tax deductible, neither portion of the donation can be paid for from the member’s Daffy account.
- will be used for lobbying purposes, political contributions, or to support political campaign activities
- benefit an individual selected by the member. Note that members may designate donations to educational, scholarship or missionary funds or awards, as long as the charity exercises full control and discretion in determining the recipient and that the individual selected is not a Disqualified Person or chosen by a Disqualified Person.
Members will be required to affirm that their donation recommendation adheres with this policy each time a donation recommendation is made and members accept all responsibility for ensuring donation recommendations conform to the Internal Revenue Code and Daffy policies.
Donation Recommendation Processing and Timeline
Regulatory and Governance
Relationship with Aside, Inc.
Aside, Inc. provides Daffy with technical and operational services, including managing the Daffy Charitable Fund mobile application and website. All Daffy member information is shared with Aside, Inc. employees as needed to properly service and support DAF accounts held by Daffy.
Aside, Inc. owns and licenses the intellectual property Daffy utilizes in connection with its charitable giving platform. Daffy pays Aside, Inc. fair market value for its platform license and services.
Terms and Conditions of Member Agreement
This Agreement outlines the policies, procedures, rules, and restrictions associated with opening and maintaining Daffy donor-advised fund accounts. Member participation in Daffy is subject to these terms and conditions. In engaging with Daffy and Daffy donor-advised fund accounts, members agree to accept and be bound by this Agreement. Subject to IRS rules and guidelines governing DAF operations, Daffy reserves the right to modify or change this Agreement at any time for any reason. In the event of modifications or changes, Daffy will update the Agreement on the Daffy website, https://www.daffy.org. Members are responsible for periodically reviewing this Agreement to be informed of updates.
Governing law
This Agreement shall be construed in accordance with the laws of the State of Delaware, and the rights and obligations of the parties to this Agreement shall be governed by the laws of the State of Delaware.
Additional Information
Any questions about this Agreement or requests for further information may be directed to policy@daffy.org, or in writing to Daffy Charitable Fund at 300 3rd Street, Suite 7, Los Altos, CA 94022.
State Registration
Daffy Charitable Fund is a charitable organization exempt from taxation under section 501(c)(3) of the Internal Revenue Code, and as such, is registered to solicit in all those states where it is required to do so. Certain states require us to include disclosure language on all printed solicitations.
Financial and other information about Daffy Charitable Fund’s purpose, programs and activities can be obtained by contacting Adam Nash at 300 3rd Street, Suite 7, Los Altos, CA 94022 or at support@daffy.org, or as stated below.
Colorado: Colorado residents may obtain copies of registration and financial documents of Daffy Charitable Fund from the office of the Secretary of State, (303) 894-2680, http://www.sos.state.co.us/, re: Reg. No. 20213028533.
Florida: SC No.01008 A COPY OF THE OFFICIAL REGISTRATION AND FINANCIAL INFORMATION OF DAFFY CHARITABLE FUND MAY BE OBTAINED FROM THE DIVISION OF CONSUMER SERVICES BY CALLING TOLL-FREE, WITHIN THE STATE, 1-800-HELP-FLA OR VIA THE INTERNET AT WWW.800HELPFLORIDA.COM.
Georgia: A full and fair description of the programs and activities of Daffy Charitable Fund and its financial statement are available upon request at the address indicated above.
Illinois: Contracts and reports regarding Daffy Charitable Fund are on file with the Illinois Attorney General.
Kansas: In Kansas, Daffy’s Charitable Fund’s license number is 21-029230.
Maryland: For the cost of postage and copying, documents and information of Daffy Charitable Fund filed under the Maryland charitable organizations laws can be obtained from the Secretary of State, Charitable Division, State House, Annapolis, MD 21401, (800) 825-4510.
Michigan: MICS 64105.
Mississippi: The official registration and financial information of Daffy Charitable Fund may be obtained from the Mississippi Secretary of State's office by calling 1-888-236-6167.
Nevada: The state of incorporation of Daffy Charitable Fund is E18909992021-6.
New Jersey: INFORMATION FILED WITH THE ATTORNEY GENERAL CONCERNING THIS CHARITABLE SOLICITATION AND PERCENTAGE OF CONTRIBUTIONS RECEIVED BY DAFFY CHARITABLE FUND DURING THE LAST REPORTING PERIOD THAT WERE DEDICATED TO THE CHARITABLE PURPOSE MAY BE OBTAINED FROM THE ATTORNEY GENERAL OF THE STATE OF NEW JERSEY BY CALLING (973) 504-6215 AND IS AVAILABLE ON THE INTERNET AT http://www.state.nj.us/lps/ca/charfrm.htm.
New York: Upon request, from the Attorney General Charities Bureau, 120 Broadway, New York, NY 10271.
North Carolina: Financial information about Daffy Charitable Fund and a copy of its license are available from the State Solicitation Licensing Branch at 1-888-830-4989 within (within North Carolina) or (919) 807-2214 (outside North Carolina).
Pennsylvania: The official registration and financial information of Daffy Charitable Fund may be obtained from the Pennsylvania Department of State by calling toll-free, within Pennsylvania, 1-800-732-0999.
Virginia: Financial statements of Daffy Charitable Fund are available from the State Office of Consumer Affairs, PO. Box 1163, Richmond, VA 23218.
Washington: The notice of solicitation required by the Charitable Solicitation Act is on file with the Washington Secretary of State, and information relating to financial affairs of Daffy Charitable Fund is available from the Secretary of State, and the toll-free number for Washington residents: 1-800-332-4483.
West Virginia: West Virginia residents may obtain a summary of the registration and financial documents of Daffy Charitable Fund from the Secretary of State, State Capitol, Charleston, WV 25305. Inquiries can also be made to Adam Nash at Daffy Charitable Fund. CONTRIBUTIONS ARE DEDUCTIBLE FOR FEDERAL INCOME TAX PURPOSES IN ACCORDANCE WITH APPLICABLE LAW.
REGISTRATION IN THE ABOVE STATES DOES NOT IMPLY ENDORSEMENT, APPROVAL OR RECOMMENDATION OF DAFFY CHARITABLE FUND BY THE STATE.