Social Change through Financial Innovation: Evidence from Donor-advised Funds

The Review of Corporate Finance Studies 11, 694–735.

53 Pages Posted: 25 Oct 2021 Last revised: 28 Jul 2022

Date Written: February 1, 2022

Abstract

I draw on new data to examine how donor-advised funds (DAFs), a fast-growing philanthropic option, relate to social progress. DAFs are distinguished by flexibility -- transforming complex assets and separating the timing of tax breaks from giving decisions. While DAFs are often classified by their sponsor type, I introduce a new classification scheme that reflects their economic purpose, including the users targeted, style and features offered, and focus of grant making. This classification reveals that the recent growth is fastest among DAFs that offer FinTech tools, liquidity transformation, and grant making focused on diversity, equity, and inclusion. Conditional correlations show that DAFs with a more innovative style of service distribute more grants to charities serving areas with high inequality, in times of greatest financial need, and with more efficient operations.

Keywords: Donor-advised funds, DAFs, Philanthropy, Nonprofit firms, Impact Investing, Innovation, FinTech

JEL Classification: G32, G24, G28

Suggested Citation

Grennan, Jillian, Social Change through Financial Innovation: Evidence from Donor-advised Funds (February 1, 2022). The Review of Corporate Finance Studies 11, 694–735., Available at SSRN: https://ssrn.com/abstract=3925198 or http://dx.doi.org/10.2139/ssrn.3925198

Jillian Grennan (Contact Author)

Emory University ( email )

Rich Memorial Building
1602 Fishburne Dr
Atlanta, GA 30307
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
253
Abstract Views
1,389
Rank
257,314
PlumX Metrics