United States
Cracking open the donor-advised fund system to unleash trapped charitable billions into the Ownership Economy through an applied systems hack powered by graduate interns from top business and professional schools.
Last update: October 05, 2023
Philanthropy’s fastest-growing vehicle—donor-advised funds (DAFs)—has quietly become one of the largest engines of wealth preservation in the United States. DAFs allow donors to claim immediate tax deductions while assets remain invested—often indefinitely—through the same financial institutions that manage private wealth.
Today, DAFs hold more than $250 billion, and we project they will swell to $4.5 trillion by 2048, eclipsing the total assets of private foundations nearly threefold. According to a National Philanthropic Trust analysis cited by Nonprofit Quarterly, over 70% of DAF assets are held by national commercial sponsors such as Fidelity Charitable, Schwab Charitable, and Vanguard Charitable. These funds are typically invested in mainstream public-market portfolios that can perpetuate inequality, climate risk, and community disinvestment—the very challenges philanthropy claims to address.
This is philanthropy’s hidden fault line: a structure that rewards accumulation more than redistribution. The charitable intent embedded in these dollars is trapped in a financial system that defaults to extraction rather than repair.
Meanwhile, the Great Wealth Transfer—the largest intergenerational shift of assets in U.S. history—is accelerating the flow of wealth into DAFs. If left unchanged, this trend will lock in inequality for decades to come.
Yet within this challenge lies extraordinary opportunity. Redirecting even 1% of today’s DAF corpus ($2.5 billion) toward the Ownership Economy—investments that expand employee ownership, strengthen communities, and build equitable prosperity—could demonstrate a new standard for systemic impact.
The challenge is twofold: to build both the WILL (awareness and motivation among donors) and the WAY (accessible tools and intermediaries) to align DAF corpus with mission and impact.
Hack the DAF is a systems-level intervention designed to reprogram how donor-advised fund capital flows—transforming DAFs from vehicles of preservation into engines of redistribution and repair.
Our approach integrates applied research, behavioral insight, and financial design to uncover leverage points that can redirect DAF corpus toward impact investing, especially within the Ownership Economy.
Through collaboration with MBA and professional graduate school interns, the project both advances field-level understanding and cultivates the next generation of finance leaders / wealth hackers. These students—future investors, asset managers, and advisors—will gain hands-on experience redesigning philanthropic finance to serve community wealth and inclusive growth.
This talent pipeline is supported by the Ownership Capital Lab’s founder, a Social Impact Fellow at the Haas School of Business, which facilitates graduate student engagement, and by her facilitation of Haas’ participation in the University Consortium for Employee Ownership, which creates bridges to other top business and policy schools nationwide.
The project will be benefit from advisory by three leading impact-focused DAF platforms—ImpactAssets, ImpactCharitable, and Realize Impact—ensuring that the work is grounded in real-world feasibility and aligned with existing DAF innovation efforts.
Methodology and components:
1. Develop an initial psychographic segmentation hypothesis of DAF holders—mapping motivations, barriers, and openness to impact investing—to inform targeted engagement strategies and lay the groundwork for deeper research.
2. Map the DAF ecosystem—including sponsors, intermediaries, advisors, and policy influencers—to identify high-leverage points within existing power and decision networks.
3. Design activation strategies that align behavioral drivers with new pathways and tools for DAF corpus investing.
4. Model catalytic leverage to illustrate how modest grant investments can unlock exponentially greater flows of DAF capital toward impact, to engage philanthropy to finance the next stage of the work.
Interns will apply stakeholder analysis, behavioral mapping, systems thinking, and financial modeling, guided by the Ownership Capital Lab and the project’s advisory partners.
The result: an actionable roadmap and evidence-based framework for activating donors and intermediaries—proving that even small, well-placed interventions can redirect billions in charitable capital toward inclusive, regenerative systems of ownership.
Immediate Outputs (within project period)
1. DAF Ecosystem Map: A visual overview of key actors, relationships, and leverage points across the DAF landscape.
Segmentation Hypothesis Framework: A working model of DAF holder mindsets, motivations, and openness to impact investing—serving as a foundation for ongoing research and targeted strategies.
2. Activation Strategy Portfolio: A set of recommended interventions, narratives, and partnership models for catalyzing DAF investing for impact.
3. Catalytic Capital Model: Scenario analyses illustrating how grant-funded interventions can unlock exponentially greater DAF investment flows.
4. Educational Engagement: Experiential learning for MBA interns, embedding systems-finance and Ownership Economy principles in their professional trajectories.
Broader Outcomes
1. Shift in Philanthropic Norms: Increased awareness among donors and advisors that investing DAF corpus for impact is both possible and urgent.
2. Institutional Leverage: Strengthened collaboration among DAF sponsors, intermediaries, and philanthropic leaders based on shared data and coordinated strategies.
3. Next-Generation Finance Leadership: MBA participants enter finance and philanthropy fields equipped to influence capital systems toward inclusion and equity.
4. Proof of Concept for Scale: Demonstration that even a 1% shift of DAF corpus—$2.5 billion—can produce measurable improvements in worker ownership, local wealth creation, and climate resilience.
Hack the DAF is both a prototype and a precedent: a focused systems “hack” that activates dormant wealth, teaches future finance leaders, and creates the opportunity to redirect the trajectory of trillions in charitable capital toward justice and shared prosperity.
