E74: Donor-Advised Funds Explained

AIME Episode 74 Transcript

Sarah Florer (00:03.291)
All right. Welcome everyone to Alt Investing Made Easy. Today we're thrilled to have a friend join us, Stephanie Cesar. She's a Senior Donor Relations Officer at Austin Community Foundation. And she's here today to talk to us about donor-advised funds. Thanks so much for spending time with us today, Stephanie.

Stephanie Sessa (00:23.289)
Thanks so much for having me. I'm excited to dive into the conversation.

Sarah Florer (00:27.047)
Yeah, me too.

Roland Wiederaenders (00:28.066)
Yeah, thanks for being here, Stephanie. And this is an investor education podcast. And we have had episodes before talking about charitable giving and qualitative estate planning. And so I always get personally excited whenever we can talk about charitable giving, because I think it can be a really powerful tool in a way that maybe is unexpected. But Stephanie, please tell us.

a little bit about yourself, your professional life, and how that relates to Austin Community Foundation.

Stephanie Sessa (01:05.219)
So, the privilege of working with wonderful team at ACF, we really focus on mobilizing ideas and resources to make central Texas a better place for all of us. My specific role lives at the intersection of philanthropy, tax strategy, and community impact. So really figuring out how we can deploy philanthropic capital in a way that

improves outcomes for central Texans. And so I got into this line of work from a previous decade of service in the nonprofit education space and did a lot of fundraising operations work. And when my family relocated to Texas, I was really looking for an organization that was place-based, rooted locally, and that's what led me here. So I'm excited to...

I've been with the team for almost four years now.

Sarah Florer (02:03.923)
That's really great. you know, I think specifically today we're planning to talk about donor advised funds. But just briefly, you know, maybe we'll get into it a little later, Stephanie. Like what led you into working in community work and nonprofits in the first place?

Roland Wiederaenders (02:26.339)
thing.

Sarah Florer (02:27.667)
Do we have a pause?

Roland Wiederaenders (02:28.992)
Yeah, so just start again.

Sarah Florer (02:31.025)
Okay, yeah, so it's okay, that'll get fixed. So Mark, you know, obviously removed that. So Stephanie, like before we get into talking specifically about donor advised funds, which is a specific topic of the day, what is it that really got you into working with nonprofits in the first place?

Stephanie Sessa (02:53.517)
Yeah, so I grew up in a military family. you know, it was really modeled for me from my dad's commitment to public service to find a way to give back. And, you know, my mom volunteered all when I was growing up. So it just really

you know, drove a lot of the decisions I made when I thought about my career and what impact I wanted to have. In particular, you know, as I mentioned, I did start off specifically in the education nonprofit space. And, you know, my my family really emphasized the importance of education and improving outcomes, you know, for my dad in particular, you know, by joining the Army and getting college paid for, you know, that really led to a lot of his success later on in life. And, you know, his also ended up

after the tremendous military career had a tremendous private sector career as well. And again, really credited education to that. So that's kind of what got me to dip my toes into the nonprofit space. And then as my career continued to develop, there's so much wealth in this country in particular, and really thinking about

know, leveraging some of my experience in strategic planning and figuring out how to deploy those resources in a strategic way is something that really energized me as I thought about shifting out of the education space more specifically and. Into more of a philanthropic advising type of.

Sarah Florer (04:30.035)
I think that's really great. I love the term philanthropic capital. I think we might title this episode, Philanthropic Capital. That's a great word or a great phrase. So, rolling.

Roland Wiederaenders (04:36.822)
Yeah, I like that.

Roland Wiederaenders (04:41.55)
Well, I thought, know, Stephanie, maybe at a real high level, give us the pitch for a donor-advised fund. If I'm a wealthy investor, I come to you and say, Stephanie, what is a donor-advised fund?

Stephanie Sessa (04:55.991)
Right. think.

Roland Wiederaenders (04:58.38)
And I think, just hold on, your mic, can't, so maybe if you move back, I don't know, but maybe come a little closer.

Stephanie Sessa (05:06.969)
for us.

Sarah Florer (05:08.359)
Yeah, there we go. That should be good.

Stephanie Sessa (05:10.647)
I was trying to move the sign them in and move them to...

Roland Wiederaenders (05:12.514)
Well, no, it's there's something that it's not picking up your voice. So try again.

Stephanie Sessa (05:19.833)
Sorry, I'm trying to also get the...

Sarah Florer (05:21.905)
That is really good. There was a moment there that it was really good. Just keep talking and let's figure out where you have to stay still.

Roland Wiederaenders (05:24.184)
Yeah.

Stephanie Sessa (05:25.803)
Okay.

Is that better? I know this, I know the sun is, is that going to be an issue or?

Roland Wiederaenders (05:31.522)
Yeah, yeah, yeah.

Sarah Florer (05:31.591)
That's perfect.

Roland Wiederaenders (05:36.044)
Well, we've got to, yeah. The sound would be better. anyway, yeah, let's try again. So Stephanie, again, we're going back to this investment, investor education concept, and you mentioned education before. So we are passionate about that as well. But could you tell us, a wealthy investor comes to you and says, Stephanie, tell me what a donor-advised fund is. How would you respond?

Sarah Florer (05:36.135)
Right there is perfect.

It's okay.

Stephanie Sessa (06:06.465)
A donor-advised fund is essentially a charitable checking account. So it's a charitable giving vehicle. It's always housed at a public charity, so a 501c3 institution like Austin Community Foundation where I work. And essentially, a donor makes an irrevocable contribution into that fund. It's typically cash, stocks, some sort of asset. And that donor will receive an immediate tax deduction.

for that gift and then retain advisory privileges to recommend grants to nonprofits over time. And so that's where the advising piece of a donor advice fund comes in. And so really as.

as individuals thinking about their holistic financial picture, the key advantage to a donor-advised fund is that it actually separates the tax event from the grant decision. So essentially, you can think about funding a donor-advised fund in a high-income year where you might be looking for that advice from your...

CPA or financial advisor like to make that larger charitable gift. But you can put that all into a donor advised fund and then deploy the dollars thoughtfully over time at the cadence and at the amount to the various nonprofits at your discretion.

Roland Wiederaenders (07:21.816)
So just to follow up, so until I designate how it's going to be deployed to the qualified underlying charitable organizations, the money remains in that account and it's managed by Austin Community Foundation.

Stephanie Sessa (07:38.391)
That's right. So a donor advised fund can be invested in the market, which most of our fund holders do choose for that to happen. We have investment counsel that helps us make sure that we're good stewards of those dollars and investing them prudently and wisely. And that's really a win-win for us because that's ultimately more dollars going out into the community over time. So yes, that money will be invested. And then when a donor is

ready to make distributions out of that fund. There's liquidity to be able to do that.

Roland Wiederaenders (08:15.438)
Well, that's a really good explanation. And I'd mentioned before that while I'm a tax attorney and I know generally what a donor-advised fund is, I couldn't tell you all the mechanics. you really, I'm learning alongside our audience a little bit today. And that was a really good explanation.

Sarah Florer (08:15.603)
think it's really cool.

Sarah Florer (08:32.433)
Yeah, was. Stephanie, how would you, I'm sure you get asked this all the time. So how do donor advised funds compare to other giving vehicles such as private foundations or just direct gifting?

Stephanie Sessa (08:45.689)
Yes, I'm sweet.

Roland Wiederaenders (08:47.97)
and that we're having a problem with the sound again. So could you start again?

Sarah Florer (08:51.325)
Come back a little bit. Just come back a little bit. Right here. Yeah, here. Yeah. There you go. I know it's hard. It's so hard. You don't do it consciously. Yeah, it's okay.

Stephanie Sessa (08:54.265)
Here? Here? Is that good? Okay, sorry. I'll stop moving around in my seat.

Sarah Florer (09:05.907)
Go ahead. I'll start over. So, how do donor-advised funds compare to other giving vehicles that people are used to, like private foundations, or just giving directly to the nonprofits of their choice?

Stephanie Sessa (09:07.009)
Okay, do you want to just go in?

Stephanie Sessa (09:23.833)
Yeah, so of course, we know that a lot of donors prefer to give direct gifts to an institution or a nonprofit charity. And that, of course, makes sense. think a DAF really comes into play when you want that timing flexibility and you're in a liquidity year and perhaps haven't decided which organizations you want to support. But you can lock in that tax deduction now and then grant those dollars later.

We have also seen a trend in people deciding to open a donor advised fund instead of a private foundation. know, a DAF really offers that similar grant making flexibility, but without the administrative burden of operating a private foundation. So you don't have to have a separate legal entity. There's no annual 990 PF filing.

There's not a mandatory 5 % payout requirement annually and, you know, generally lower costs to administer a DAF compared to a private foundation. so, of course, private foundations do still make sense for families that really want that full governance control, you know, a staffed entity where, you know, they have program officers and so forth. But I'll say for many donors these days, a DAF delivers most of the functionality of a private foundation.

but at a much more efficient and cheaper way.

Sarah Florer (10:48.797)
Mm.

Roland Wiederaenders (10:50.998)
That's really good to know and these are options that people would have and I like the idea of being really deliberate and making sure that this is the charity that I want to give to and that's kind of where my mind went is maybe telling us a little about the impact that you've had, the charities that you serve, that ultimately you're...

your donors say, I want to give to this charity and, you know, stories about how the donors have helped those charitable organizations.

Stephanie Sessa (11:26.841)
So ACF was founded in 1977, so we've been around for almost 50 years and over that time period we've deployed over $700 million into the community, which we're really proud of. Reflective of the growth of Austin,

It's really exciting to share that in 2025 alone, we granted out almost $100 million into the community. So, you know, again, reflective of Austin's growth, more, I think, donor advised funds becoming more familiar to investors and in the marketplace. Of that 100, almost 100 million that was granted, know, roughly 60 % of that stays local within central Texas. But of course, anyone who has a donor advised fund with us is able to

Sarah Florer (11:51.271)
Wow.

Stephanie Sessa (12:14.989)
grant to any eligible 501c3 institution across the country. So you know of course if you attended a university outside of Texas for example and you may want to support your alma mater, you're still able to do that with your donor advised fund. And we also have the ability to grant internationally as well. We'll do some due diligence and vetting to ensure that those international organizations are operating equivalent.

as equivalently to a United States based 501c3. so making sure that those dollars are invested securely as well. And so, yeah, we also do some grant making ourselves as a community foundation and invite donor advised fund holders to co-invest and participate in that grant making. We specifically

invest in economic mobility for central Texans and housing affordability. And so those are really our two pillars of our foundation grant making.

Sarah Florer (13:17.309)
I just want to emphasize here just for the audience that, and it's something that's maybe counterintuitive just because of the name Austin Community Foundation, sorry. But the key is that you don't, it's not confined. So if you use a donor advice fund with you all, then you can do anything you want, provided of course it's within the requirements of what is required.

from a regulatory perspective. So I just want to emphasize that again, because it's not if you come to you that you're just investing in say, Austin. Really, it's where you want to go. And the university example is a great example. Another question actually is, you take cash assets, securities, basically things that are easy to transfer and basically easy to administer and invest, but do you deal in real estate at all?

Stephanie Sessa (13:53.866)
Exactly.

Stephanie Sessa (14:13.581)
Yeah, we have the ability to accept a lot of different complex asset types. And that's really where DAFs as a charitable giving tool can be quite powerful. So to zoom out from the real estate question in particular, if you donate long-term appreciated assets, you generally can deduct the fair market value and avoid capital gains tax on those donated shares.

Sarah Florer (14:24.049)
Right.

Sarah Florer (14:37.664)
wow. Okay. Yeah.

Stephanie Sessa (14:40.977)
So with that in mind, course, appreciated stock and securities is typically.

Sarah Florer (14:46.621)
We're gonna keep going, don't worry. Yeah, just keep moving. Yeah, yeah.

Stephanie Sessa (14:52.065)
you know, a popular asset type that we receive. However, you know, are always willing to have a conversation around other types of assets that can be accepted. And so, you know, we really pride ourselves on our flexibility, our nimbleness in doing that due diligence around complex asset gift acceptance. So yes, have have accepted different real estate holdings as charitable donations in the past.

Sarah Florer (14:55.229)
Right.

Stephanie Sessa (15:17.945)
closely held business interests, which you can talk about, oil and gas rights. So there's a whole wide variety of assets outside of just cash and publicly traded securities that should be thought about as charitable assets to give. It might be a better overall for that donor's financial picture.

Sarah Florer (15:20.956)
wow. Okay. Yeah.

Sarah Florer (15:26.876)
Yeah.

Sarah Florer (15:32.358)
Yeah.

Sarah Florer (15:42.383)
Right. That's really interesting. And I think that's another key issue for the audience is you're not confined to movable securities or cash. know, you there it sounds like basically you're able to to, in other words, like offload an asset that, you know, give it to somebody else to deal with in a certain way, you know, and get the tax benefit of it in the end.

So that I think is what means this is why somebody needs to come talk to a specialist like you. I think some of these things are just not immediately intuitive just from thinking about Austin Community Foundation and donors' advice funds. But there are just terms in there, like the funds, people probably could think, it has to be cash. And this comes from another conversation we had with someone who...

works at another charity and she was like, people need to know that they can donate securities to us and then we can benefit even better because we can have long-term dividend income from that. it's really, I think, great to hear about that again from a slightly different direction. Let's just check in on what Roland's doing. I think we're having Wi-Fi issues today too. Maybe that's part of what's going on with you two. But I'm, hey.

Sarah Florer (00:01.378)
Alright Stephanie, so you know, obviously there's common misunderstandings because even Roland and I have common, had a, you know, slim misunderstanding about what donor advice funds were before we even started talking, but what would you say for people that you talked to who were looking to make a charitable gift?

are the most common misunderstandings people have about donor-advised funds.

Stephanie Sessa (00:36.86)
I think one common misconception is that a DAF is just an investment account with charitable branding. And it's really important to know that once you open a DAF and make the contribution into that DAF, that's an irrevocable gift. the donor no longer owns those assets and can't take them back. So always want to make sure people understand that before opening a fund.

Sarah Florer (01:01.037)
Yeah.

Stephanie Sessa (01:03.288)
Another misconception is that, or criticism that of course happens, that DAFs are often

Staffs are often criticized around parking money indefinitely because they don't have that same 5 % payout requirement that a private foundation does. so that said, you know.

Sarah Florer (01:27.149)
Right.

Stephanie Sessa (01:30.264)
The flexibility for a DAF really allows thoughtful strategy and the intent is not for those funds to just sit there and be stagnant. so ACF and I know all community foundations really actively encourage ongoing grant making and engagement and have policies in place to ensure that those funds are deployed and not just sitting in that charitable checking account, so to speak.

Sarah Florer (01:56.248)
Well, and that makes sense that a community foundation would be sort of your mitigation of that particular issue, right? Because it's almost like there's a dual mandate. There's the mandate of the foundation vis-a-vis its role that it's supposed to in the community, and then it's the contractual agreement it has with the donors, which is essentially how that works.

in the end it's all about a relationship, the donor relationship with the fund, the funds relationship with everybody that might be able to access funding from ACF, example. And I think charitable giving has to work that way, right? Because otherwise there wouldn't be any tax advantages that attach it to just putting your money in a different investment account. And this is something we encountered just as a side note.

There kind of is no free lunch. And I work with some really senior estate planning attorneys in my firm. And I love hearing from them because they have so much experience. And there are always a lot of trust structures out there. It's very common to hear out there and AI tools and online and everything that, there's all these amazing ways you can hide your money from the IRS and you can do this and you can do that. And in the end, they actually don't.

generally work. And I think that must be the same in the charitable giving arena, that there's an intentionality that just as you say, the most critical piece of charitable giving, which would be the same if you just gave it directly to anyone, also any charitable endeavor that was legitimately structured under the tax code, this would be, again, it's irrevocable, right? That's the whole point really. That's why you get the tax benefit.

So your money is going out of your control and the question is how much influence do you have over what happens next? And I know that's why people sometimes do like to set up their own proprietary structures. But in any event, let's move on to... Well, this is great actually for people that are listening. Why do you want to even care about a philanthropic strategy or think of part of your capital as philanthropic capital?

Stephanie Sessa (03:40.116)
Exactly.

Sarah Florer (04:10.733)
How is that commonly seen as part of financial planning? Now know Stephanie, you're not a financial planner, so I'm not asking you to give actual advice, and I'll caveat that here for the audience. But in your experience, what do you kind of see as the general way this is all working?

Stephanie Sessa (04:26.712)
Yeah, I think for many investors or individuals, philanthropy is one of, if not the largest discretionary capital allocations that you'll ever make. And yet it's often the least integrated into a financial strategy. A lot of times people are just writing a check to support an event or as they hear about causes.

Sarah Florer (04:45.741)
Hmm.

Stephanie Sessa (04:56.524)
when you think about putting a more strategic approach to those charitable dollars, think about what longer lasting and more intentional impact you might be able to have on the causes that you care about. And so, yes, there's certainly the aspect of charitable planning that intersects with liquidity events and those high income years, right? So,

Sarah Florer (05:08.11)
Mm.

Stephanie Sessa (05:24.332)
You know, of course, care about philanthropic strategy from that perspective, right? You know, a donor advised fund in particular can smooth that tax exposure, as I've mentioned, you know, reduce capital gains and create that flexibility about when and how you're making those charitable contributions.

Sarah Florer (05:39.566)
Mm-hmm.

Stephanie Sessa (05:42.732)
To give a specific example of, especially in Austin where there are so many entrepreneurs, we have often worked with founders who come to us as part of their longer term exit planning. And by contributing a portion of those closely held business interests before any inkling of sell or purchase agreement is on the radar, I do have to caveat by saying that, that entrepreneur is able to secure

Sarah Florer (06:06.872)
Mm-hmm.

Stephanie Sessa (06:12.666)
secure a tax deduction, avoid the capital gains on that specific portion, and then take their time to deploy those funds strategically once those shares have liquidated and the staff is funded with cash. so it's really, again, a win-win. They are, of course, saving and it's helping their overall financial planning picture, but it's also a win for the community and thinking about how those...

that philanthropic capital can be deployed. And so I really think the lesson here is that philanthropy works best when you can be strategic and proactive about it and really think, take that longer term lens and see how it fits within your bigger financial picture and not just think about cash as it relates to charitable giving.

Sarah Florer (06:42.466)
Mm-hmm.

Sarah Florer (07:03.23)
So I have actually just this might be the most simplistic question, but also may be relevant. Say I set up a set up a donor advised fund and I may have a liquidity event, a liquidity year and make a nice donation to it. But the next year is kind of calm and I just do regular like you say, this the school band needs a donation and this needs a donation. And my grandkids or my kids need this and the Boy Scouts and the Girl Scouts and you know, and I do want to just write those checks.

Would a better strategy be, okay, I've got this relationship with ACF, let me call them up and say, hey, let's allocate through this, or let me put some more money in, like I'm sending five grand over today because I have these different little things and I'm gonna forget about them and I need to make sure that I'm doing this all within a plan. Is that something that kind of would make sense? Because I'm just thinking about the administrative side of it for somebody.

and how to even keep track of all those little donations. It seems like if you make one larger donation, larger being say $10,000, I don't even know if you accept that small, but then have a bunch of little spots to allocate it to. I mean, that would create more administrative burden for ACF, but I can see how that would be a practical solution to kind of keep people going with keeping track of all of that stuff. At the end of the year, you have one receipt for your donation to your donor advised fund rather than...

all the other stuff.

Stephanie Sessa (08:29.856)
Exactly. I think you're describing one of the most compelling value propositions for a donor advice fund. keeps all your charitable giving in one place. And so a lot of donors will engage in what we call a bunching strategy where that donor will give upfront perhaps a couple of years worth of what they intend to give out charitably. Again, that money is invested in the market, so ideally growing over time.

Sarah Florer (08:34.007)
Yeah.

Sarah Florer (08:57.344)
It's making money.

Stephanie Sessa (08:59.052)
And then they can use their fund at ACF to make those ongoing ad hoc gifts as things come up, for example, yeah, to support your kids' and so forth. And, you know, that's what we're here for. Yes, it's, you know, administrative work for us, but, you know, we have an online portal where, you know, donors can go in and make those grant requests. Of course, you know, we also really pride ourselves on White Glove Service and a human connection and touch at ACF. And so,

Sarah Florer (09:07.182)
Mmm.

Sarah Florer (09:12.355)
That's cool.

Stephanie Sessa (09:28.874)
if you open a fund tier, you're going to have a real person and a dedicated relationship manager to reach out to if you ever need support with your grant making as well. So we're here to support that. And yeah, that donor is getting that one tax receipt letter for making their gift into their donor advised fund. And then you can still support all of the causes that they care about.

Sarah Florer (09:33.816)
Mm-hmm.

Sarah Florer (09:51.692)
Yeah, I can see how that's honestly very compelling just for busy people who have successfully made money to where they have a philanthropic capital strategy that they need to have, right? This is a very practical part of it. But actually that I know we have some other important things to discuss, but just to finish this part out, do you have a minimum? What's the minimum for opening a donor-advised fund? This would be really good to know.

Stephanie Sessa (10:15.224)
Yeah, we have a minimum of $5,000 to open a donor-advised fund. we really believe in democratizing philanthropy and keeping those minimums low. so yeah, it's we have a

Sarah Florer (10:20.514)
That's...

Stephanie Sessa (10:33.706)
a wide variety of fund sizes at ACF. So everything from $5,000 all the way up to the tens of millions of dollars. And so we're here to support anyone in the community who is interested in making a philanthropic impact.

Sarah Florer (10:37.294)
Right.

Sarah Florer (10:48.686)
I want to just re-emphasize that point because that, you know, I love that democratization of philanthropy. We talk about democratization of capital and how our securities laws in the United States allow people to build their wealth from starting with very little to, you know, needing a philanthropic capital strategy. But I do think that that's really brilliant because I think a lot of us out there, even if we don't perceive ourselves as needing a philanthropic capital strategy,

actually you probably are giving $5,000 a year to the basketball team and the band and all these different things. And some of that has to be done just as not an official gifting strategy primarily because those aren't authorized organizations for issuing tax receipts. But on the other hand, there probably are many of them that you could be capturing for your own tax planning, regardless of where you are and sort of...

the spectrum of wealth that gets involved in this. So I'm really glad to hear that because I know we're here to talk about the more complex stuff. We're about to talk about the more complex asset types that we touched on already a little bit. But it's really good to hear that this is an open door and everybody pretty much has a seat at the table. know, recognizing that there is of course totally fine if you don't have such $5,000 to fund a DAF with, that's, you know, completely fine. But if you want to think about it, it's good for people to know. Or if you want to get used to it, you can start small.

and see how goes, know, see how the relationship develops with ACF or another organization. Well, listen, let's cover these last few things because I really want to hear about the impact investing that we had kind of set out and things to talk about. with the complex asset types or appreciated assets, we talked about it for a second, but why don't you just go through that again just quickly for our audience.

Stephanie Sessa (12:40.952)
Yeah, so ACF and many of our sponsors have the ability to accept complex assets. so while we see cash and publicly traded, appreciated securities being the most commonly accepted asset types into a donor-advised fund, we have accepted and done due diligence on a whole wide variety of assets. So everything from real estate to closely held business interests, oil and gas rights,

crypto, gosh, we even accepted a steamboat back.

today, not that that's a common asset that most folks have at their disposal. But needless to say, at ACF really are always willing to engage in a conversation to explore if we are able to accept a complex asset that can be liquidated and then deployed for philanthropic purposes.

Sarah Florer (13:17.344)
Yeah

Stephanie Sessa (13:45.836)
That's some of the most fun work we do around finding those creative solutions for our donors. So yeah, don't hesitate to give us a call if there are any of those.

Sarah Florer (13:50.776)
Mm-hmm.

Sarah Florer (13:55.348)
Yeah, I'm already thinking of a few people I think I need to introduce you to. All right, great. So what about impact investing? Maybe what do we mean by that would be the place to start and then how a donor advice fund can be involved.

Stephanie Sessa (14:13.974)
Yeah, donor advised funds can do impact investing. And I think this is a really evolving and exciting area for us. So at ACF specifically, we offer opportunities for charitable capital to be deployed in ways that generate both financial and community return. And so we have two different fund vehicles that folks can invest in that

essentially operate as impact investing vehicles. The first is called Fund ATX, which is an investment vehicle that's really designed to deploy capital into initiatives that support economic mobility for central Texans. And so that usually is structured as a low cost loan to a nonprofit organization or a community development institution. so

Once that loan is repaid and has generated that financial return, that philanthropic capital is recycled back into the community to invest in more projects.

Sarah Florer (15:12.941)
Hmm.

Stephanie Sessa (15:13.844)
Many of our donor advised fund holders who know that they may not be granting out all of their fund balance right away will actually choose to invest a portion of their DAF into fund ATX because instead of it just sitting there, they let that money go to work and get that financial return, but also that social return as well. And then the second impact investing vehicle we have is called the Housing Accelerator Loan Fund. And that provides

flexible, low cost capital to affordable housing developers across the community. And so, you know, we've done a lot of research in this space to figure out where philanthropy can help play a role in these really large scale projects. And so oftentimes there are bridge loans or financial gaps that, you know, need to be filled so that projects can keep moving quickly and not get stalled. And so.

Sarah Florer (15:56.578)
Mm.

Stephanie Sessa (16:08.542)
Yeah, we're we've raised over 20M dollars for that loan fund, which is really exciting and can then cycle those funds into new projects once those those loans are repaid. And so those are just 2 examples of how ACF has engaged in impact investing. And I think for many more investment minded donors, it's really appealing because it aligns investment principles with social impact and being mission focused as well.

Sarah Florer (16:12.973)
Wow.

Sarah Florer (16:37.898)
Mm-hmm. That's great. And I'm going to circle back to on that particular topic with you offline. Stephanie, it's just so great. And for everyone in the audience, I just want to emphasize that having someone as articulate as Stephanie here on, she's covering a lot of ground and it's incredibly educational, not just for me and for Roland, but also we hope for you. think this is such an important area and people need to know about it.

Lastly, let's talk about impact and legacy. Well, we did talk about, but this kind of ties into it with impact investing in general. when you think about legacy and impact investing and your DAFs, what would you, do you have anything further you want to add about that?

Stephanie Sessa (17:23.256)
Yeah, as individuals age, right, you your perception of impact and legacy certainly evolves over time. And although this conversation today has been heavily rooted, of course, in, you know, tax deductions and financial planning, really, you know, the most meaningful conversations that I have with

with individuals are really about their values and what impact they want to see in the world. so really ADAPT is just a tool, right? And for us at ACF, the bigger opportunity is helping individuals and families align the success that they've found financially with the type of community and environment that they want to help build. so while some donors, of course, want that immediate...

immediate responsive giving. Others are thinking more multi-generationally about their legacy and their charitable giving. And a DAF really allows you to do both things, right? You can support flood relief efforts in the time of crisis, and you can also be thinking about your charitable giving over a 10-year, 20-year time horizon. And so to help bring this to life, you know, I've worked with a family who

Sarah Florer (18:16.686)
Mm.

Sarah Florer (18:27.502)
Mmm.

Stephanie Sessa (18:35.328)
really wanted to get their teenage children started to get invested in those values of giving back and philanthropy, but didn't want to establish a private foundation due to that administrative burden and complexity. And so you can use ADAPH as part of that annual family meeting that you have. And we've worked with families where the kids will do their own research on a cause that they care about and present some grant recommendations for the family to engage in.

Sarah Florer (19:03.213)
Mm-hmm.

Stephanie Sessa (19:05.082)
really becomes that governance training ground for families. You can instill the values and also connect with your family in a more meaningful and deeper way. so we really love to support families who are looking to engage in those types of conversations. We've even had elementary kids come in with their families just to get exposure to it.

Sarah Florer (19:16.984)
Mm-hmm.

Sarah Florer (19:30.668)
cool.

Stephanie Sessa (19:34.786)
some of the most, you know, the best parts of the work for sure. And then when you think about ADAF in terms of more specifically in terms of, you know, the nitty gritty nuts and bolts of the state planning, you know, a donor has the right to name a successor advisor, you know, on that fund, you know, that would be responsible for overseeing the grant distributions upon their passing. You can also...

Sarah Florer (19:53.986)
Hmm.

Stephanie Sessa (20:03.0)
I choose to convert a fund into a permanent endowment that can then use to engage in grant making aligned with community priorities. know. You see, I have has 650Million dollars of assets under management and 38 % of those funds are permanently endowed, which means we are here as a permanent piece of community infrastructure to engage in grant making and be responsive to the needs of central Texans.

Sarah Florer (20:12.393)
Mm-hmm.

Sarah Florer (20:21.891)
Wow.

Sarah Florer (20:25.718)
Right.

Stephanie Sessa (20:32.45)
forever and we know what the needs are today and we'll have that flexibility to be able to support what might come down the road as well. so, yeah, we can be a great partner for folks looking to think, thinking about legacy and impact and not just thinking about, like, where should I give, but what change am I trying to create and how does my capital get us there?

Sarah Florer (20:48.214)
Mm-hmm.

Sarah Florer (20:54.998)
Mm-hmm. Yeah, that's just incredible. mean, again, I'm going to reemphasize. I I think what you're saying makes sense, especially when you start to talk about legacy planning and the necessary education for future generations to be seeped in the values of the essentially whether the family has generational wealth or whether it's the you know, the individual is the current generation who's kind of had a major wealth building life, I guess.

There's a lot in legacy planning where a lot can go wrong in future generations. And so having a steadfast partner like Austin Community Foundation is what I'm hearing saying is that it's like a consultant, it's a type of a very specialized financial advisor, right? Who's there next to you to help the future generations understand and just keep on the right track with things. Because life is complex and there's a lot of things to keep track of.

as an adult, so as a child to slowly learn how to take care of those things. It's something that I've heard from lot of friends and colleagues, people that I know that work in wealth management in general and specifically with emerging and fully private family offices. Listen Stephanie, we are at about 40 minutes and I'm so grateful that you took time to spend with us today. I'd love to have further chats if there's ever an opportunity to do that.

You know, definitely this area of philanthropic capital is very important to people who are already interested in alternative investing and being educated about that. So everything you've had to say is so relevant for our audience, even though it's not the exact business of making the money, which is what we talk about a lot of times, too. Right. So I appreciate your time and just the sheer amount of education you've given us as a gift. So thank you for being with us today.

Stephanie Sessa (22:53.746)
me at Son of Pasha.

Sarah Florer (22:54.912)
Yeah, great. So thanks everyone for joining us today. Sorry we lost Roland. We decided to proceed because we had Stephanie's time today to use. And so we look forward to seeing you next time on Alt Investing Made Easy. Take care.

Sarah Florer (23:13.335)
All right.