The Vennfi Relationship
A description of the relationship between Vennfi, Inc. and Charityvest, Inc.
Last updated
A description of the relationship between Vennfi, Inc. and Charityvest, Inc.
Last updated
The Charityvest venture is powered by an innovative social enterprise partnership.
"Vennfi" is a modern venture-backed software and financial technology company, creating innovative new giving products. Its first product is "Charityvest," a modern donor-advised-fund-based giving platform.
Vennfi partners with "Charityvest, Inc.", a 501(c)(3) public charity and DAF-sponsoring organization, to power its donor-advised funds. Charityvest, Inc. is an independent public charity, governed by its own independent charitable board. The two organizations share rights for the brand "Charityvest."
This innovative for-profit / nonprofit partnership enables modern technology to be seamlessly integrated with an efficient tax-deductible giving vehicle, empowering greater giving.
A common concern we hear is, does Vennfi's nature as an early-stage venture pose risks to Charityvest's DAF assets? As a matter of law, a 501(c)(3) DAF sponsoring organization such as Charityvest cannot divert charitable assets due to e.g., the capital needs of a vendor such as Vennfi. If any service provider of Charityvest went bankrupt, including Vennfi, creditor/investor claims could only be paid from the remaining assets of the service provider itself and not from funds held by Charityvest.
Where charitable assets are involved, a DAF sponsoring organization’s directors and officers have both statutory and common law duties to safeguard and assure that the assets continue to be used for charitable purposes.
Charityvest is an independent, 501(c)(3) public charity with a donor advised fund program. It is managed by its own independent Board of Directors with fiduciary duties with respect to its charitable assets. These duties include a legal responsibility to ensure that all DAF assets are used only for charitable purposes and that the DAF program is otherwise operated in compliance with applicable tax law.
Like many other donor advised fund sponsoring organizations, Charityvest has contracted with a third-party service provider (Vennfi, Inc.) to provide comprehensive software and administrative services to its DAF platform for a fee. As a third-party service provider, Vennfi, Inc. has no claim, in either contract or law, to Charityvest’s DAF assets.
Also, Charityvest’s Board of Directors retains fiduciary oversight in connection with any arrangements with Vennfi, Inc. and/or other service providers. This oversight includes ongoing monitoring of Vennfi, Inc.’s performance and exercising the requisite standard of care to determine whether such arrangement continues to be in the best interests of Charityvest. These duties also include ensuring that Vennfi, Inc. (or any other third party service provider of the charity) has no claim by contract or otherwise to the charitable assets of Charityvest and that any fees paid to Vennfi, Inc. in consideration of these services do not exceed fair market value.
