DAFs and the Insider’s Perspective for Advisors
At National Philanthropic Trust (NPT), we understand the dynamic relationship between a financial advisor and
their client. For many on our team, this understanding comes from personal experience.
Prior to joining NPT, Matthias Mackay (Regional Director, Midwest) and Janos Major (Regional Director, West)
worked closely with clients as advisors with a series of financial institutions. This first-hand experience provides a
unique perspective on how advisors navigate the client conversation, and how philanthropy is becoming a bigger
factor in the financial health of a client’s portfolio.
On April 22nd, Janos and Matthias will host an NPT webinar entitled “Philanthropic Planning and the Client
Conversation.” Ahead of this event, we sat down with both to discuss their experiences as financial advisors, what
has changed in the past few years, and what the future of philanthropy looks like for advisor and client alike.
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Both of you have extensive first-hand knowledge on the advisor side of the business. What has your experience been like when it comes to introducing the concepts of philanthropy with clients?
Matthias Mackay: So much of being an advisor is academic, logistical and quantitative. You learn about the modern portfolio theory, returns, assets allocations, running reports and managing compliance. But when you start to talk to people about philanthropy, that really gets into the social and emotional aspects [of financial advising]. You could have all the money in the world, but if you don’t know how to deploy it properly, it’s not really a good financial plan. And philanthropy can be a big part of that for some. The reason [donors] give is to affect the change they want to see. Every client is different, and every client is the same, and so is the process by which we work with our clients.
Moving from the advisor side to the philanthropic sector, how has your perspective changed? Do you have a “north star” viewpoint that remains?
Janos Major: Every client’s goals are meaningful or emotional to them. They are wondering what good they can do in the world, and as the financial advisor, it’s asking, “How can I move the needle for them?” and “How can I convert more of my clients’ wealth into money that I can manage?” The number of things I’ve learned at NPT about how to leverage philanthropy…. I wish I could tell myself back in 2009 when I was first starting: you can very clearly see the successful advisors can leverage the philanthropic conversations and the philanthropic vehicles. If you can touch on things with clients like retirement or philanthropy, that’s when the client decides you’re the person they want to work with going forward. Philanthropy is a huge aspect that is becoming more important and the advisors who get it are the ones we see being more successful.
What’s the percentage that you’re working with advisors as opposed to the percentage you’re working with donors directly, and how do you evolve and deepen the existing relationships versus those opening new opportunities?
Janos: Within my role, it’s probably 95% direct to advisor and 5% donor. There’s a lot of times, too, where I’ve had advisors come to me and say, “Hey, my client brought up the idea of a DAF, I need to know what a DAF is like right now.” So, there’s also the donor asking their advisor to investigate things and then they come to us.
Matthias: The NPT model lends itself towards working with advisors. And to the extent that I work with donors, they’re usually through introductions by financial advisors. It can come down to the advisor and their style, too.
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What are those conversations like, whether it’s for the first time or with an existing advisor who wants to know more about DAFs? What makes NPT stand out among the competition?
Matthias: I always start with donor-advised fund 101, even if they say they know what a DAF is. I discuss the three stages: give, grow, grant. With that giving stage, we talk about the ability to take in, hold and liquidate complex and illiquid assets. These are all things that can work really well inside a donor-advised fund. The growing stage, that’s where the advisors come in and they can manage those assets above certain thresholds, and we can get highly concentrated. And then in the grantmaking stage, we do due diligence in house and if they have any questions, they can come to us.
Janos: I think our investment flexibility, especially around things like concentrated positions and long-term holds within the DAF space that our competitors are not doing. We have a whole alts team dedicated to nothing but alts on an operational, daily basis. I think it speaks to the complexity and sophistication we offer.
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Where do you think the biggest opportunity is, specifically for advisors, within the DAF space now or in the near future?
Janos: I think it’s still in private business interest or restricted stock, those illiquid assets, that have real power. Converting an asset that you can’t manage into, eventually, a liquid asset that you can manage is a lightbulb moment for a lot of advisors when they do their annual review and full balance sheet. To be able to find a bridge between them and convert it, and like that emotion of philanthropy to it. Impact investing, or at least questions around impact investing, are also very important for philanthropic capital.
Matthias: I focus on and have a lot of conversations around alternative fund structures. So, when we think private equity hedge fund or provide credit, I think there’s a tremendous amount of opportunity. As a financial advisor, I’m looking at the balance sheet and asking, “What’s a really good DAF asset?” Something with a high amount of embedded capital gains that I can get a fair market value deduction or close-to-fair market value deduction. Maybe it’s my NVIDIA stock or maybe it’s my GameStop stock. It’s going to be these alternative assets and we’re seeing a commoditization of these. The other focus is private: If I was a financial advisor today, I would be talking to people with private foundations. Look at private foundations and the tax treatment associated with them. We can do it inside a structure that you know can accomplish these [philanthropic] goals, either as a compliment or a supplement to the donor or the foundation. It’s a real recipe for growth.
Janos: For a lot of advisors, these are clients that they’re already working with, and it’s just assets on the books they’re not managing, and the DAF is a great way to add new conversations, to add new assets to their overall portfolio. If you can work with clients, you already have and introduce them to a new idea that generates additional capital or revenue, that’s the dream scenario for any advisor.
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What can attendees look forward to in our upcoming webinar?
Janos: One of the things I love about NPT is how we provide creative solutions to the challenges faced by the clients and advisors we work with. Often, just giving a different perspective or set of tools can provide a moment to sit back, take a breath, and approach topics from a different angle. For this upcoming conversation, I’m looking forward to sharing two new resources for advisors, a brochure and workbook that provide insights on how to navigate an upcoming client meeting and weave philanthropy into the conversation.
Matthias: All in all, I think both resources provide a good mix of in-depth considerations and simple solutions.
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What’s a final piece of advice you can share with advisors?
Matthias: What you put out into the world is what you get back. That’s something the regional directors [at NPT] often discuss. Maybe you mentioned an idea to an advisor, and that advisor is getting coffee with another advisor six months later and says, “My DAF person mentioned something about that, you should call them.” Just by having that initial conversation, I have found it begets more of that activity.
Janos: I think more and more wealthy people are looking for unique ways to reach their philanthropic goals, and if you can present them with a unique idea, you can be ahead of the curve.
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Thank you both so much for your invaluable insights today!
We look forward to hearing more insider perspectives during our upcoming webinar, “Philanthropic Planning and the Client Conversation,” on Tuesday, April 22nd, 2025.
You can register for the webinar here:
