Giving Compass' Take:
- Grant Trahant interviews Matt Eldridge, the Executive Director of Realize Impact, about advancing impact investing through DAFs.
- How can donors and funders engage in effective impact investing for equity and support innovation in impact investing?
- Learn more about best practices in giving.
- Search our Guide to Good for nonprofits in your area.
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Impact investing is often perceived as complex, requiring a balance between financial returns and social good.
Realize Impact eliminates these barriers, providing a streamlined process that enables individuals, foundations, and donor-advised funds (DAFs) to invest in high-impact ventures while maintaining financial sustainability.
How Advancing Impact Investing Through DAFs Works
Impact investing through Realize Impact is facilitated via the Philanthropic Investment Grant (PHIG)—a simple and effective way to direct capital toward high-impact ventures.
By recommending an investment and providing matching capital, donors can amplify their contributions while supporting meaningful change.
Realize Impact simplifies impact investing into three steps:
- Grant Recommendation – Investors recommend an impact investment through a grant from a DAF, foundation, or personal funds.
- Due Diligence & Investment – Realize Impact conducts research, reviews terms, and executes the investment in debt, equity, or revenue-based funding.
- Returns & Reinvestment – 99% of the investment returns are donated back to the investor’s recommended DAF, foundation, or nonprofit for reinvestment.
This model allows investors to support impactful projects without the complexities of direct investment management.
What Is a Donor Advised Fund?
A Donor Advised Fund is a philanthropic giving vehicle that allows donors to contribute funds, receive immediate tax benefits, and then recommend grants to eligible charities over time.
Think of it as a charitable savings account, where individuals or families set aside funds dedicated to philanthropic purposes.
These funds are managed by sponsoring organizations, such as community foundations, universities, or specialized charitable organizations, which administer the DAF on behalf of the donor.
Unlocking Capital for Global Solutions
Significant capital remains idle in donor-advised funds and foundations. Realize Impact mobilizes these funds into ventures addressing key global challenges such as:
- Climate change – Investing in renewable energy and sustainable business models.
- Economic empowerment – Supporting underrepresented entrepreneurs with access to capital.
- Social equity – Financing housing, education, and healthcare initiatives.
By actively deploying philanthropic capital, Realize Impact maximizes both financial and social returns.
Read the full article about impact investing through DAFs by Grant Trahant at Causeartist.