Investing DAF Assets

As a financial advisor, you have multiple tools available for managing your clients’ DAF assets. This includes full control over Advisor-Managed Portfolios (AMPs), collaborative target allocation suggestions for Endaoment-managed portfolios, and coordination of cash management for grant distributions.

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Advisor-Managed Portfolios (AMPs)

Advisor-Managed Portfolios are the cornerstone of DAF asset management, giving you direct control over a portion of your clients’ charitable assets through your existing platform and processes.

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Automatic AMP Setup

New advisor-managed DAFs are automatically configured with:

• 100% AMP Allocation: Assets initially allocated entirely to your management
• Shell Account Creation: Dedicated accounts at your existing broker-dealer
• Platform Integration: Seamless management through your current trading system
• Custom Fee Structure: Ability to configure your own management fees within the AMP setup

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AMP Management Capabilities

Full Investment Control

• Asset Selection: Complete flexibility in investment choices
• Alternative Investments: Access to private markets, real estate, and specialized strategies
• Rebalancing: Manage portfolio rebalancing on your timeline
• Tax Management: Coordinate tax-loss harvesting and optimization strategies

Operational Integration

• Existing Platform: Use your current trading and portfolio management systems
• Client Reporting: Integrate with your standard client reporting processes
• Risk Management: Apply your established risk management frameworks
• Compliance: Maintain consistency with your firm’s investment policies

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Requesting Additional AMPs

Clients can request AMPs through:

1. Client Dashboard: “Request Advisor-Managed Portfolio” button on fund page
2. Direct Contact: Advisor email request to admin@endaoment.org
3. Onboarding Process: Automatic setup during initial DAF creation

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Portfolio Reporting Requirements

Monthly reporting ensures proper oversight and regulatory compliance for all Advisor-Managed Portfolios.

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Monthly Statement Submission

Submission Requirements

• Frequency: Monthly statements required for all AMPs
• Destination: Send to advisors@endaoment.org
• Timeline: Submit by the 15th of each month for the previous month
• Alternative: Upload via integrated client portal if available

Required Information

• Current market value of all holdings
• Individual position details and quantities
• Cash balances in shell accounts
• Any corporate actions or position changes
• Performance attribution if available

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Valuation Methods

Traditional Securities

• Market Value: Use current market prices for publicly traded securities
• Pricing Source: Standard pricing services (Bloomberg, Reuters, etc.)
• Timing: End-of-month valuations preferred

Private Market Investments

• Fair Market Value: Mark to latest available fair market value
• Cost Basis: Use cost basis if FMV not available
• Documentation: Provide valuation source and methodology
• Updates: Report valuation changes when new information becomes available

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Reporting Best Practices

Documentation Standards

• Use consistent formatting across all statements
• Include all required data points for each portfolio
• Maintain clear position identification (CUSIP, ticker symbols)
• Provide context for large position movements
• Flag any unusual activity or significant changes

Timeline Management

• Submit reports by the 15th to ensure timely processing
• Notify Endaoment of any expected delays
• Coordinate with month-end closing procedures
• Plan for holiday schedule adjustments

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Cash Management for Grant Distributions

Effective cash management ensures sufficient liquidity for grant distributions while maintaining optimal investment allocation.

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Grant Liquidation Process

Advance Planning

• Grant Pipeline: Monitor client’s planned charitable distributions
• Cash Positioning: Maintain appropriate cash levels for expected grants
• Liquidation Timing: Coordinate asset sales with grant timing needs
• Tax Considerations: Optimize liquidation timing for tax efficiency

Execution Coordination

• Grant Requests: Receive advance notice of upcoming grant distributions
• Liquidity Assessment: Evaluate current cash position and liquidation needs
• Asset Selection: Choose optimal positions for liquidation to raise cash
• Settlement Timing: Ensure cash availability aligns with grant execution

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Cash Management Strategies

Conservative Approach

• Higher Cash Allocation: Maintain 10-15% in money market or cash equivalent
• Immediate Availability: Grants can be processed without asset liquidation
• Lower Returns: Trade-off between liquidity and investment growth

Aggressive Approach

• Lower Cash Allocation: Maintain 2-5% cash for immediate needs
• Higher Investment: Maximize assets in growth investments
• Liquidation Coordination: Require advance notice for large grants

Dynamic Management

• Seasonal Adjustments: Increase cash during high-giving periods
• Client Communication: Coordinate with client’s giving calendar and tax planning
• Market Timing: Consider market conditions when planning liquidations

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Allocation Strategies Across Portfolio Types

While you have full control over AMPs, you can also suggest target allocation changes across Endaoment-managed portfolios to complement your management approach.

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Available Portfolio Categories

Your Advisor-Managed Portfolio

• Assets you manage directly on your existing platform
• Held in shell accounts at your broker-dealer
• Full flexibility for alternative investments and private markets
• Your custom fee structure applies

Traditional Asset Portfolios

• Index funds, money markets, and fixed income options
• Minimum investment: $500 per portfolio
• Variable annual fees (0.50% minimum)
• Professional management by Endaoment’s team

Digital Asset Portfolios

• Bitcoin, Ethereum, tokens, over 1000+ tokens available
• 1.00% annual fee
• Maximum 30% of total platform assets per investment policy

Impact Investment Portfolios

• Values-aligned investments with social/environmental benefits
• Board-approved options focused on positive societal impact
• Combines financial returns with charitable values alignment

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Target Allocation Suggestion Workflow

Step 1: Access Fund Allocation

1. Navigate to client’s DAF from your Endaoment dashboard
2. Locate “Fund Allocation” section under “Add Assets” & “Make Grant” buttons
3. Click “Edit Allocation” to open allocation editor

Step 2: Propose Portfolio Mix Changes

1. Search & Select: Browse available portfolio options
2. Add Portfolios: Click ”+” button next to desired portfolios
3. Set Target Percentages: Adjust allocation for each selected portfolio
4. Verify Total: Ensure all percentages add up to 100%

Step 3: Submit for Approval

1. Review proposed target allocation strategy
2. Click “Save Changes” to submit recommendations to client
3. Client Approval Required: Suggestions queued for client review and approval

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Key Collaboration Permissions

What You Control Independently:

• AMP Management: Full control over Advisor-Managed Portfolio investments
• Asset Selection: Complete investment decision-making within AMPs
• Rebalancing: Manage AMP rebalancing on your timeline

What Requires Client Approval:

• Target Allocation Changes: Suggestions for Endaoment-managed portfolio allocations
• Portfolio Mix Adjustments: Addition or removal of portfolio types
• Percentage Changes: Adjustments to any non-AMP portfolio allocations

Implementation Process:

• Weekly Rebalancing: Approved changes implemented during Endaoment’s ~weekly rebalancing cycle
• Professional Execution: Endaoment’s team handles all trades for managed portfolios
• Coordination: Work within Endaoment’s infrastructure policies and timing

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Strategic Allocation Considerations

Risk Management

• Diversification: Balance AMP concentration with Endaoment-managed diversification
• Correlation: Consider correlation between AMP strategy and suggested portfolios
• Capacity Limits: Respect platform-wide portfolio caps for compliance

Client Objectives

• Risk Tolerance: Align allocation with client’s overall risk profile
• Time Horizon: Consider client’s expected giving timeline and growth needs
• Values Alignment: Incorporate impact investing based on client preferences

Operational Efficiency

• Rebalancing Coordination: Work with weekly rebalancing cycles for optimal execution
• Minimum Investments: Respect $500 minimum for individual portfolio allocations
• Fee Optimization: Balance management fees across different portfolio types

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Working with Endaoment’s Infrastructure

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Weekly Rebalancing Process

• Timing: Endaoment conducts ~weekly portfolio rebalancing
• Implementation: Approved allocation changes executed during rebalancing cycles
• Coordination: Align your recommendations with this systematic approach
• Optimization: Endaoment determines optimal timing and methods for portfolio transitions

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Investment Policy Compliance

Broad Investment Guidelines

• Advisory Privileges: As fund advisor, you have advisory privileges over investment recommendations, consistent with Endaoment policies
• Default IPS: All AMPs adopt Endaoment’s broad Investment Policy and default Investment Policy Statement for Advisor-Managed Portfolios
• Policy Framework: Guidelines accommodate a wide range of investment strategies while maintaining charitable purpose alignment

Committee Approval Requirements

• Standard AMPs: Default Investment Policy Statement allows most traditional and alternative investment strategies
• Custom Strategies: Any deviation from the default IPS requires Investment Committee or Board approval before implementation
• Private Markets: Blended capital or specialized private investment strategies must receive pre-approval
• Timeline: Allow adequate time for committee review during the approval process

Asset Deployment Limits

• Portfolio Caps: Respect protocol-wide limits on asset deployment for compliance
• Diversification: Balance concentration risk across portfolio types and asset classes
• Regulatory Requirements: Maintain compliance with 501(c)(3) and advisor custody regulations

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Risk Management & Exit Rights

Crisis Response Capabilities

• Exit Authority: Endaoment retains the right to exit any portfolio position at any time for safety or risk management reasons
• Emergency Action: Crisis response procedures prioritize asset protection and regulatory compliance
• Communication: Immediate notification to advisors of any emergency position changes
• Documentation: All emergency actions documented with clear reasoning and timeline

Ongoing Risk Oversight

• Position Monitoring: Regular review of portfolio positions for risk management
• Market Conditions: Heightened oversight during volatile market periods
• Compliance Review: Ongoing assessment of positions for regulatory compliance
• Coordination: Work collaboratively with advisors on risk management decisions when time permits

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Private Market Investment Requirements

Prohibited Persons Compliance

• Questionnaire Required: DAFs seeking private market exposure must maintain a completed Prohibited Persons/Entities Questionnaire on file
• Annual Updates: Questionnaire must be refreshed annually to support compliance
• Anti-Prohibited Benefit: Ensures compliance with IRS regulations prohibiting excess benefit transactions
• UBIT Compliance: Supports Unrelated Business Income Tax compliance for private investments

Private Market Access

• Documentation: Maintain current Prohibited Persons documentation before private market deployment
• Review Process: Enhanced due diligence for private investment opportunities
• Ongoing Monitoring: Regular compliance review for private market positions
• Exit Planning: Clear procedures for private investment liquidation if needed

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Professional Support

• Technical Assistance: Support available for allocation planning and implementation
• Market Insights: Coordination with Endaoment’s investment team for market perspectives
• Compliance Guidance: Ongoing support for regulatory and operational questions

For complete details on managing collaborator access, see Adding a Collaborator. For information on withdrawal policies and procedures, see Policies and Procedures.