Anyone an expert on DAFs (donor-advised funds)?

Hey WSO,

I'm doing some quick research on a potential early stage investment in a company called Chariot and wanted to reach out to see if anyone is familiar with donor-advised funds.

https://www.givechariot.com/

The premise is that they are a payment network connecting non-profits to approximately $160Bn that is just sitting in US-based donor-advised funds.

A donor-advised fund (DAF) is a specialized financial account used for the purpose of charitable giving. It allows donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants (that become donations) to 501(c)3 charities over time.

Chariot allows nonprofits to add a payment option (widget) to their website, allowing donors to 'one-click' give with their donor advised fund. They enable this by creating a network connecting donor advised funds and nonprofits. Charities/non-profits/fundraising platforms can add or integrate a "Pay with DAF" widget to their website/payment page. Donors click the button, log in to their DAF account, and make a payment in just a few clicks. The company makes money by charging a 2.5% transaction fee (covered by the donor)

Pro's Donor-advised funds are growing in popularity with CAGR for the # of DAFs in the US increasing 36% from 2016 to 2020 The company is a soon-to-be-graduate of Y Combinator (the most selective / prestigious accelerator in the world) Legendary investor Ron Conway is an existing investor in the company

Con's Pre-launch / no traction - no hard numbers or data showing the founders have something that is working Classic vitamin vs. painkiller problem? - there is some friction associated with getting funds sitting in a DAF account -> charity/non-profit, but the friction is not super crazy for someone who is motivated. Donors can register with https://www.dafdirect.org/ to donate, the UI is clunky, but people who have a DAF have their favorite charities, so registering on https://www.dafdirect.org/ vs. using a button that is native to a charity's website is not a huge improvement? Seemingly a lack of defensibility? (e.g. what prevents other payment providers from adding the button / widget?

Thoughts?