A Quick and Easy Way to Receive DAF Grants

By: Robert Tigner, Regulatory Counsel | The Nonprofit Alliance (TNPA)

Handing over of U.S. currency.

What nonprofit would not want donations received as quickly as possible? “Time is money,” said Benjamin Franklin in the mid-18th Century. A point that is hard to argue with then or since.

About a year ago, Vanguard Charitable announced a partnership with PayPal, described as follows:

Vanguard Charitable…has partnered with PayPal to launch Grant Payments, enabling charities to receive funds from DAF account owners faster and more easily. The initiative addresses the longstanding use of physical checks in charitable grantmaking, a method hampered by mail delays and administrative burdens for charities.

To address this problem, Vanguard Charitable and National Philanthropic Trust (NPT) collaborated with PayPal to create Grant Payments. It allows nonprofits to accept and receive electronic funds for grants — up to $10 million — at no cost to the charity or the DAF account owner/donor.

In the year since the program was launched, Vanguard and NPT have been joined by another ten or so DAF sponsoring organizations. In that time, $2 billion — $1 billion by Vanguard alone — has been donated through Grant Payments. The hope, and expectation is that more DAF sponsoring organizations will get on board.  

Here is how it works:

  • A nonprofit signs up for a free NPO account from PayPal.
  • Once the account is verified, participating DAF sponsoring organizations — like those referenced above — will send grants designated by their account owners to the nonprofit grantee’s PayPal account.
  • The nonprofit may receive the funds in minutes. There is no transaction charge to the nonprofit nor is there one to the DAF account owner. The nonprofit may elect to have the funds go into its PayPal account or may choose to have it directed to its bank via ACH, which will take a couple of days.

Thousands of nonprofits already have PayPal NPO accounts. If your clients are not among them, should they not be? It is free, and the benefit is clear with funds being transferred so rapidly. Mr. Franklin would certainly approve.

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