When Se-ah-dom Edmo, executive director of Seeding Justice, first joined the foundation in 2019, the board made it clear that they wanted to change how the organization managed its donor-advised funds.

“One of my first conversations with our board was, ‘We’ve got to figure out what the heck we’re doing about DAFs – because the way we hold them is not mission-aligned’,” Edmo says.

In 2021, Seeding Justice announced a new strategy called Donor-in-Movement Funds. Any incoming dollars go through a “split”: 50 percent are allocated to a community-led participatory grantmaking committee to spend as they see fit. Another 40 percent remain under the donor’s control, to a point – after 12 months, the funds go through another split, discouraging the assets from being hoarded under Seeding Justice’s supervision.

Shifting from Federally Regulated DAF Reform

Most of the conversation around DAF reform in the United States has revolved around federal regulations. But as foundation leaders wait to see how the political winds will shift, some have taken to self-regulating their DAF accounts to ensure they live up to standards of transparency, accountability and equity that current regulations don’t require.

For Edmo, the Donor-in-Movement Funds concept is a creative approach that helps Seeding Justice operationalize and demonstrate policies around faster payout rates and increased community control that some activists and even donors have called for.

Edmo has been calling on other foundations that control DAFs to join her in taking back control from donors. It’s a call that has been echoed by other foundation leaders and philanthropy critics, while still others argue that this kind of voluntary effort, while positive, can be a distraction from legislative reform.

“Many of the community foundations that we talk to feel that their hands are tied,” she says. “Typically, my response is, ‘Your hands are tied because you tied them. You write the contracts that individuals sign when they set up DAFs. You have the power to shift those contracts and to shift the business model.”

Read the full article about DAF reform by Kaila Philo at Proximate.