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Daffy Charitable Fund Donor Agreement

Mission and Vision

The Daffy Charitable Fund (“Daffy”) is a not-for-profit organization organized around a simple mission. Daffy exists to help people be more generous, more often.

Our organization is inspired by a compelling vision: a world where everyone regularly puts something aside for those less fortunate than themselves.

Daffy members fulfill this mission by making a commitment to put aside money regularly into our proprietary donor-advised fund, built from the ground up to help automate giving and sharing those generous acts with others. We call this commitment, The Daffy Pledge.

Daffy is the Donor-Advised Fund for You™.

Donor-Advised Funds

Daffy oversees and administers donor-advised fund (“DAF”) accounts, and these accounts form the basis for a member’s identity on the platform. A DAF account is a charitable giving vehicle administered by a sponsoring organization such as Daffy that is a tax-exempt organization under §501(c)(3) of the Internal Revenue Code. A donor may make multiple contributions to their DAF account and activities in an account are separately maintained and accounted for. Contributions to a DAF account are irrevocable charitable donations to the DAF sponsor, and as a result, members are generally eligible to take an immediate tax deduction for the calendar year when the contribution is made.

The donor serves as an advisor over their account, with the ability to select how (and whether) the account is invested. The donor also recommends donations to qualifying charities. The sponsoring organization verifies that the recommended donation and donation recipient meets all necessary qualifications for approval. Once approved, the donation amount is deducted from the DAF account, and the money is sent to the donation recipient. The sponsoring organization retains ultimate authority and control over individual DAF accounts and may refuse a donor’s recommendations for any reason.

Membership

Becoming a Daffy Member

Daffy accounts are only available to Daffy members. New members can join Daffy either through the mobile application available for the Apple iPhone or using the website available at daffy.org. Daffy members are asked to provide authentication credentials, information to help describe the purpose and goals of their fund account, and financial information to automate the funding and investment of their account. Members are asked to take The Daffy Pledge and can also select to make a one-time contribution through their bank account or credit card.

Membership Levels

Daffy currently offers two levels of membership, each based on the financial features selected by each member, as well as the level of support the member provides. This membership is supported by membership dues, as outlined below.

Daffy Contributors are provided access to their unique Daffy donor-advised fund, with the ability to make both one-time and recurring contributions to their DAF account. Contributions can be made through a linked bank-account, or through a linked debit or credit card through Apple Pay™. Contributors can select between a range of portfolios to invest their accounts including options invested in global stocks, bonds, and crypto assets.

Daffy Benefactors are provided access to all of the same features and capabilities as members, with the added ability to make contributions of publicly-traded stocks and crypto assets. Daffy reserves the right to modify the features and privileges available to each level of membership, as well as the expected membership dues for each level.

Membership Dues

Daffy membership dues are based on level of membership and are currently charged on a monthly basis. Members can review the membership dues for each level on the Daffy website at: https://www.daffy.org/membership.

Members are required to pay membership dues directly from their DAF account. If there are insufficient funds in a member’s DAF account, the account will be suspended, and the member will be prompted to contribute additional funds. The account will remain suspended until additional funds are transferred by the member. Daffy reserves the right to schedule a minimum contribution to cover the difference in dues owed.

Investment Options

Investment Portfolios

Daffy members can select from a variety of investment portfolios to invest their DAF account. These investment portfolios offer members the potential for their gifts to grow tax-free, potentially providing additional funding to the charities of their choice. These investment portfolios have been selected to offer a range of investment characteristics: some portfolios are more conservative, while others are more aggressive. These portfolios also vary based on the composition of investments. Currently, Daffy offers portfolios invested in public market exchange-traded funds (“ETFs”), as well as selected crypto assets, such as Bitcoin and Ethereum. For a complete list of portfolios offered by Daffy currently, please refer to the website: https://www.daffy.org/portfolios.

Investment Advisor

Daffy may retain the services of one or more investment advisers to assist with the construction of investment portfolio options. However, Daffy is not and will not be acting in the capacity of a registered investment company or a registered investment adviser (as such term is defined by the Investment Advisers Act of 1940 or any state law) or an agent to any Member or other third-party customer or client. Further, pursuant to available exemptions under the Investment Company Act of 1940 and Investment Advisers Act of 1940, Daffy qualifies for an exemption from registration as a registered investment company and a registered investment adviser, respectively. Daffy will utilize the services of a registered broker-dealer in connection with the investment of its assets and is not responsible for any system or software failures of any third-party, including such broker-dealer.

Miscellaneous

All investment portfolios are subject to change by Daffy at any time. Daffy will retain full authority and control over the DAF accounts. Daffy does not and will not provide Members with investment advice. Investments carry significant risk of volatility, and Daffy does not guarantee that the invested DAF accounts will earn any positive rate of return. Daffy will not be liable for any diminution in the value to DAF accounts, such as losses that may occur from investing in a fund.

DAF Requirements

Eligibility

Any individual over 18 years of age may open a DAF account, provided the individual first becomes a member of Daffy and has a U.S.-based bank account. However, foreign account holders may not be eligible for an income tax deduction for contributions to a Daffy donor-advised fund account. A member can only contribute funds and assets over which they have immediate and unrestricted use, benefit and enjoyment.

Minimums

There are minimum contribution amounts required to open and fund a Daffy donor-advised fund. All DAF accounts require an initial one-time contribution of at least $100, or a commitment to take the Daffy Pledge with a recurring contribution. The minimum recurring weekly Daffy Pledge contribution is $10 per week and the minimum recurring monthly contribution is $25 per month.

DAF accounts can also be initially funded via the contribution of shares of publicly-traded stock or crypto assets. The minimum contribution of stock is $1,000, and the minimum contribution of Bitcoin is 0.001 BTC (10,000 Satoshis).

Account Enrollment

To create a DAF account, a Daffy member must provide personal and financial information sufficient to ensure the safety and security of their own account as well as the Daffy community. This information includes but is not limited to: A Member’s first and last name, city of residence, email address, and a link to a bank account, debit card, or credit card. Additional information may be required to authorize transactions depending on the transaction size or its nature.

Account Access

Daffy Members may access their accounts at any time on the Daffy mobile application by logging in with their selected username and password combination. For additional account security, options like two-factor authorization (“2FA”) are supported. Members are responsible for reviewing their accounts to ensure their accounts are secure. Daffy is not responsible for any losses resulting from account fraud, theft, or any other unauthorized activity.

Account Identification

Contributions to a Daffy account are held in an account named by the Daffy member, though Daffy reserves the right not to approve a name for a Daffy account. Daffy assigns each DAF account a unique fund number to identify the specific DAF account. Contributions made to an account remain in that member’s account until a member recommends a donation or the account is terminated (as described herein).

Successorship

After opening a DAF account with Daffy, members are able to name successors for their accounts. If a Member does not select a successor, any remaining balance is transferred to Daffy’s general charitable fund upon the member’s death. If a Member is unable or unwilling to manage an account, or if a Member dies, control over the Member’s account will pass to the Member’s named successor. If a Member does not select a successor, any remaining balance will be transferred to Daffy’s general charitable fund upon the Member’s death. A successor does not have the ability to appoint additional successors, and upon the death of the successor, any remaining balance is transferred to Daffy’s general charitable fund.

Contributions

Acceptable Contributions

Daffy members may make contributions to their DAF account via bank account transfer; debit card, credit card, or Apple Pay payment; or by contributing shares of a publicly-traded security, or a supported crypto asset (like Bitcoin) through the Daffy mobile application or website.

Tax Deductibility

Members may generally take a tax deduction after making a contribution to a DAF account. Daffy Charitable Fund is exempt under Section 501(c)(3) of the Internal Revenue Code and has an EIN of 86-3177440. This charitable deduction may be used to offset a portion of taxable income; however, the amount eligible for deduction varies depending on a donor’s filing status, income, and contribution made. Donors are only eligible for a tax deduction when making the initial contribution to a DAF account; donors may not take an additional deduction when a donation is recommended to a charity. Donors who contribute certain non-cash assets, such as cryptocurrencies and securities that exceed $500 in value, will be required to file Form 8283 with their federal income tax return. Contributions of cryptocurrencies and other forms of property may be subject to further requirements. Daffy recommends its members consult with a tax advisor for additional guidance specific to their personal financial situation and tax returns.

Irrevocability

All contributions to a DAF account are unconditional and irrevocable. Once contributions are made to a DAF account, Daffy retains the ultimate control over how the assets in the fund are invested and distributed.

Employer Matching

Some employers offer their employees the ability to receive a matching donation for donation made to a qualified not-for-profit organization. Please consult with your employer to find out if donations made to a DAF qualify.

Recordkeeping

Daffy offers secure online access to accounts. Daffy will provide confirmations of all account transactions in the Daffy Charitable Fund mobile application, website, or email. While Daffy maintains these records for active members, donors are advised to also save these confirmation receipts for their tax records.

Daffy also provides other financial information or reports required by law, as well as an annual summary of contributions. Daffy members that have invested in Daffy investment funds also receive monthly investment statements and performance reports.

If a donor contributes publicly-traded securities or crypto assets, Daffy provides donors with confirmation of the quantity and price of the contribution on the date of receipt, as well as the liquidated value of the contribution to the DAF account.

Nevertheless, donors are completely responsible for the value they claim as a deduction on their individual tax returns.

Donation Recommendations

Recommending a Donation

Members may recommend a donation at any time after a DAF account has been created. Member recommendations are only advisory; Daffy retains ultimate control over the DAF accounts and reserves the right to deny any donation recommendation for any reason. However, Daffy generally notifies members of a denial of a recommendation within 30 days after the recommendation has been made. Daffy then permits the member to make a recommendation to an alternative charity or charities. Members may not impose restrictions or conditions on the assets in DAF accounts.

Permissible Charitable Recipients

Members may recommend a donation to any charity in the Daffy Charitable Fund mobile application, or through the Daffy Charitable Fund website. Daffy limits charitable recipients to U.S. public charities described in Section 509(a)(1) or 509(a)(2) of the Internal Revenue Code that are in good standing with the Internal Revenue Service (“IRS”). Daffy derives its selection from the IRS Exempt Organizations Business Master File. Nevertheless, Daffy reserves the right to modify its charitable grantees and criteria at any time for any reason. Donations that have already been approved and issued cannot be cancelled.

Impermissible Recipients

Daffy does not permit members to recommend donations to non-U.S. charitable organizations, private foundations, Section 509(a)(3) supporting organizations, natural persons, or employer-sponsored disaster relief funds. Daffy also prohibits members from recommending donations to known or suspected terrorists or organizations known to support terrorists. Accordingly, Daffy prohibits donations to organizations listed on the U.S. Treasury Department’s Office of Foreign Assets Control Specifically Designated Nationals and Blocked Persons List.

Donation Recommendation Prohibitions

Donation recommendations may not be made for any non-charitable or improper purpose. Members may not recommend donations to satisfy pre-existing pledges or obligations for their private benefit. Donation recommendations may not provide more than an incidental benefit to the member, or any of the aforementioned’s family or 35% controlled entity (together, a “Disqualified Person”). Examples include, but are not limited to, payment for tuition, free tickets to a gala or membership benefits to third-party charities or organizations. As a result, Daffy cannot approve recommendations that are intended to cover any portion of a donation that would result in anything more than an incidental benefit accruing to an individual, including benefits associated with fundraising events. Donors will be required to affirm that their donation recommendation adheres with this policy each time a donation recommendation is made and donors and donor advisors accept all responsibility for ensuring donation recommendations confirm to the Internal Revenue Code and Daffy policies. Donation recommendations also may not provide an excess benefit to any Disqualified Person. Donation recommendations may not be used for lobbying purposes, political contributions, or to support political campaign activities.

Educational Grant Programs

Members may recommend donations to support scholarship and tuition programs under limited circumstances. No Disqualified Person may participate in selecting individuals who will receive an educational or scholarship award, nor may a Disqualified Person be a recipient of an educational or scholarship award. The recipient charity also must exercise full control and discretion over the donated funds.

Donation Number Limits & Amounts

Members may recommend an unlimited number of donations in any given month. The minimum donation recommendation is $20. If a member recommends a donation that exceeds the DAF account balance, Daffy offers the member the ability to schedule a contribution to fully fund the donation recommendation. Daffy only approves a donation recommendation if sufficient funds are available in the member’s DAF account.

Recognition and Anonymity

When recommending a donation, a Daffy member may request to be identified to the recipient charity by name, address, and DAF account name or by DAF account name only. Under IRS guidance, naming rights are an incidental benefit, so Members are permitted to receive naming rights upon recommending a donation. Alternatively, a Daffy member may remain anonymous and not be identified to recipient charities. Daffy reserves the right to limit anonymity under certain circumstances.

Donation Recommendation Review

Daffy reviews all donation recommendations to ensure donations are made for qualified charitable purposes. Such review shall be conducted by a committee selected by the Daffy Board of Directors (the “Board”). Such review shall include (a) verification of the tax-exempt status of the proposed recipient and (b) confirmation that the funds will be used for charitable purposes and that there are no impermissible benefits, and shall be conducted on an ongoing basis by the Board or a committee selected by the Board.

Member recommendations are subject to Daffy’s “variance power.” This variance power gives Daffy the authority to modify any donor recommendation or condition on donations from an account for any specified charitable purpose or to any specified charitable organization if, in the sole judgment of Daffy, such recommendation or condition becomes unnecessary, incapable of fulfillment or inconsistent with this DAF Agreement. Daffy retains the ultimate decision-making authority and reserves the right to deny a donation recommendation. Moreover, Daffy will reject a recommendation if it is aware that the donor advisor has an improper purpose in recommending the donation. Daffy will also take remedial action if it discovers it has made improper donations, including requiring that the donation be returned.

Donations to Charities

Daffy processes donations to charitable recipients on a weekly basis. Daffy transfers approved donations to selected charities by check or, if possible, electronic transfer. If other Daffy members have recommended donations to the same charities, Daffy may combine the individual donations and make one payment to the eligible charity. Members are notified if a donation is undeliverable to their recommended charity and may make an alternate donation recommendation.

Minimum Annual Distributions & Inactivity

Daffy members are encouraged to make regular and continuous contributions and donations throughout the year. If no donation recommendations are made from an account for a continuous, 12-month period, Daffy marks the account as “inactive” and makes a donation of $25 on behalf of the DAF account to Daffy’s general charitable fund.

Daffy will make multiple attempts to contact the member based on the contact information provided on the “inactive” account. If the account remains designated as “inactive” for more than a continuous, 12-month period, then any remaining funds in the DAF account will be transferred to Daffy’s general charitable fund and the account will be closed.

Relationship with Aside, Inc.

Aside, Inc. provides Daffy with technical and operational services, including managing the Daffy Charitable Fund mobile application and website. All Daffy member information is shared with Aside, Inc. employees as needed to properly service and support DAF accounts held by Daffy.

Aside, Inc. owns and licenses the intellectual property Daffy utilizes in connection with its charitable giving platform. Daffy pays Aside, Inc. fair market value for its platform license and services.

Terms and Conditions of Donor Agreement

This Agreement outlines the policies, procedures, rules, and restrictions associated with opening and maintaining Daffy donor-advised fund accounts. Member participation in Daffy is subject to these terms and conditions. In engaging with Daffy and Daffy donor-advised fund accounts, Members agree to accept and be bound by this Agreement. Subject to IRS rules and guidelines governing DAF operations, Daffy reserves the right to modify or change this Agreement at any time for any reason. In the event of modifications or changes, Daffy will update the Agreement on the Daffy website, https://www.daffy.org. Members are responsible for periodically reviewing this Agreement to be informed of updates.

Governing law

This Agreement shall be construed in accordance with the laws of the State of Delaware, and the rights and obligations of the parties to this Agreement shall be governed by the laws of the State of Delaware.

Additional Information

Any questions about this Agreement or requests for further information may be directed to policy@daffy.org, or in writing to Daffy Charitable Fund at 300 3rd Street, Suite 7, Los Altos, CA 94022.