I’ve been using Daffy for a couple of years to manage my donor advised fund and have loved the experience. In my first Daffy review I relayed some important info. Daffy is the cheapest donor advised fund provider around and is an excellent choice for everyday folks who want to donate more regularly and grow their charitable nest egg to increase their giving potential.
But things just got even better at Daffy! Instead of only a handful of pre-selected investing options, Daffy is giving its users more choice. Daffy launched a new feature called Custom Portfolios. It allows fund managers to have more decision-making power as to how their donated money is invested. This makes the whole giving system much more personalized.
Daffy was kind enough to give me early access to Custom Portfolios features so I’ve been playing around with it for a few weeks! Here are my notes and findings…
Daffy Custom Portfolios
The custom portfolios feature is exactly what it sounds like. Donors now have the option to fully customize their investment portfolio, building it however they choose instead of selecting from a few pre-selected fund choices.
When Daffy first launched, they offered ~15 funds that individuals could choose to invest in. These were built to match the donor’s risk profile, ranging from “aggressive” funds like stock heavy portfolios and crypto funds, to more “conservative” options like bond and cash heavy positions.
In all fairness, these premade options were great! And they are still and excellent choice for donors who want a hands-off approach to investing. This makes it easier to just focus on the giving and donating part.
But for personal finance nerds (like me 🙋♂️) and for larger donors who are growing massive DAFs for future giving goals, Daffy now lets users construct their own, bespoke portfolio. You can choose from hundreds of low-cost ETFs and index funds. These are the exact same ones that we love from Vanguard and Fidelity for our personal brokerage accounts.
How to Create a Custom Portfolio
Seriously, it took me like 5 minutes to build my custom portfolio – the process is super easy.
If you’re familiar with Daffy already, you’ll know that you can change investment portfolios anytime by going to Settings, then clicking on “Portfolio”.
Next to the standard funds you’ll see a “Custom” option, taking you to a screen that looks like this.
From there you can choose from pre approved fund mixes. Just customize how much of your portfolio you want to allocate into each asset, in increments of 1%.
For a total custom portfolio, you can search for different assets, then add them to your mix. Afterwards you just choose how much you want to allocate as a percentage of your portfolio.
If you’re a regular How To Money listener, you know that I’m a big fan of index funds. So I’m investing the majority of my DAF in a variety of low-cost stock funds, including ones that hold US and international stocks. I also wanted exposure to small-cap value given the historic outperformance of that asset class. Here is the custom portfolio that I ended up going with…
65% VTI
15% SLYV
10% VXUS
5% BND
5% VUSB
After you’ve built your custom portfolio, it needs to be reviewed and approved by Daffy before the investment changes go into effect. This is pretty standard for customer portfolios within DAFs, because the fund administrators want to make sure there’s no mistakes or legality issues with the assets you’ve chosen.
Here’s a video overview of how to make Daffy custom portfolios…
Custom Portfolio Fees
At this time, the custom portfolio feature is only available to Benefactor level accounts. Which means if you’re currently on one of the lower tier plans, you’ll need to upgrade.
The Benefactor level pricing is $20 per month, or $240 a year. That’s quite a bit more than the $3 per month for the Contributor level that I recommend most folks join at. If you’ve only got a small DAF (say, anything under $10,000) you’ll want to consider whether it’s worth upgrading just to take advantage of the Daffy custom portfolios feature.
For larger accounts, custom portfolios truly is a great feature to have. From the moment I opened my donor advised fund with Daffy, I made a goal to donate $1 million over the course of my life. With custom portfolios, now I’m able to grow my donation dollars more aggressively over the next few decades to meet that goal, which I’m really excited about.
Should You Create a Custom Portfolio DAF?
First of all, if you already have a donor advised fund with another organization like Fidelity Charitable or Schwab Charitable, you might be interested in moving over to Daffy now that custom portfolios are available. For larger DAFs, Daffy will easily be the cheapest option for account and fund management fees.
Daffy custom portfolios are great for donors who want more control over investment options. For anyone with decades of investment horizon up their sleeve, customizing investments is key to managing and growing charity dollars. Even small portfolio tweaks can make a massive difference in how the overall DAF performs. So it’s nice to have the ability to tailor your portfolio to your particular giving needs.
But, for folks who want to “set and forget” their charity donations and don’t want to even think about the investment angle, it might be best to just choose the standard funds that Daffy provides. If you maintain a small DAF balance, it might not be worth upgrading your account to the more expensive tier just to have access to the custom portfolios feature.
The Bottom Line:
The ability to build custom portfolios enhances Daffy’s platform and puts them even further ahead of other donor advised fund providers. Building a custom portfolio is super easy, and lets you personalize the whole charity investing experience.
Just remember you’ll need to have a Benefactor account to use custom portfolios with Daffy. It’s perfect for donors with large accounts or experienced investors that want to control their account risk and growth. But it might not be a good fit for smaller accounts or folks that appreciate the simplicity in the premade, low-cost funds that come standard.
If you don’t already have a donor advised fund, think about opening one! And if you use our referral link, you’ll get a free $25 to start your charity fund! Happy giving!
Related posts:
