From Niche to Necessity: Tax & Accounting for Web3 and Digital Assets

Hello and welcome to Niche to necessity, your go to podcast for everything tax

and accounting in the realm of web three and digital assets. I am Taylor Zork

and every episode we sit down with the top finance professionals and

CEO's from the world of web three to dissect the latest developments,

solutions and practices and best practices in this rapidly

evolving field. Our mission is to demystify the complexities of digital assets

and blockchain for tax and accounting professionals. Whether you're deep in the trenches of

web three finance or just starting to explore the impact of digital assets,

this podcast is designed to keep you informed and ahead of the curve.

Today we have the pleasure of speaking with Robbie Heger, president and

CEO of Endowment on Philanthropy in web three and donor

advice funds. So Robbie Heger is a self

taught software engineer who founded Endowment, a revolutionary

nonprofit organization that is the first community foundation of its kind

to be entirely powered by blockchain technology. A veteran of consumer

technology applications, Kieger began his career working for

Apple's media products division looking for more impact focused

manifestation of software technology. He left Apple in 2018 to

begin exploring on chain applications. He soon discovered that the tried

and true methods of donating complex assets in the traditional finance

world were not readily available for the newer asset classes of digital collectibles

and cryptocurrency. What blossomed from that original need to

give digital assets is endowment.org, the first

on chain DAP provider. So donor advised funds

built for the next 50 years of philanthropy and wealth management,

endowment staff accepts nearly any asset with a liquid market,

traditional or goal or digital, and marries their

expertise and complex donations with a delightful modern user

interface built for the rising generations of

families, individuals and corporations looking to give back.

Welcome, Robbie, and thanks for joining us. Well, thanks so much for

having me, Taylor. We're big fans of crypto CFO's and

love how deep you guys get into the weeds. So looking forward to the conversation

today. Yeah, super excited to give the folks some value and

the awareness of a product that I think will help a lot of people.

If you could just real quickly give us a little bit of background on how

you originally got into digital assets, what attracted you to the space, and

just some more clarity on that? Yeah, I

mean, you mentioned it in the intro, but

I was working on media products back

in the

20 teens and

my, my passion for

rights management, publishing, the media industry

was the original hook that got me into crypto. This

idea of digital scarcity, of digital rights management

actually being enforceable on the Internet,

a lot of the precursors to the NFT boom

that occurred in the early 2020s, um,

was what got me on this journey. Now it is

not where I have wound up. Um, ive. Ive sort of

changed, uh, industries in. In coming

to crypto. But the original hook

was, you know, I had this roommate who was working for

Ripple, and, uh, he was a recruiter,

and he. He would come home with his work, and, you

know, this was just another company that he had gotten placed at. And,

you know, he came home with his work and he was like, I don't totally

understand this, and can you guys read about it and kind of tell me

what you think? And that that led

me down the rabbit hole. That was like 2013, 2014.

And. And, you know, I started off as a

speculator, you know, as just an investor, as somebody who

took, you know, one to 3% of their net worth and put it

in crypto as. As kind of like a hedge against

the traditional finance system, as a long

on programmable money, and

forgot about it for about four or five years and really

just fell down the theoretical side, like, really was a

lurker in the media meets on chain

application space. And then

the ICO cycle hit, and

the 2017 to 2018 cycle played out.

And that really

turned my attention to

this industry as a space that really needed more

robust financial services that people were running into the brick wall

of paying the tax Mandeh and I

myself was, you know, had taken some gains and wanted to

do what I had been doing at Apple, which was giving some of my restricted

stock to a donor advice fund, right? Like,

I was very lucky to have a brother who was a CPA who was like,

you should do this, right? This is the tax savvy move. I was like,

okay, let's open a daft. So we had the Heger brothers fund

at a daft provider in the San Francisco Bay Area, at a community foundation in

the Bay Area. And all of a sudden,

I had random down market coins

that I had huge gains on because I had been

participating in the ICO craze,

and I wanted to give some of it away because it really feels like found

money. I think people who have

been in the crypto market for long enough have this feeling of, like, I

took some small amount of money and I put it on to

this coin, and I put those coins onto a flash drive, and I put that

flash drive in a safety deposit box, or am I safe at home? And

then I woke up three years later, and all of a sudden, it's a significant

game that I have tax obligation on. And

how do I both take some of those winnings, take some of those

profits, but also how do I acknowledge the privilege that it

was to be early, and how do I try and

evangelize for this technology while also mitigating my tax

obligation? And that was really the

seed that sprouted

into endowment. So I had these coins, I wanted to give some of

them away. And I think it was chain link that I was looking

to give away. And it was like during the chain link bull

cycle. And of

course, my current, at the time, DAF provider didn't accept

chain link. They didn't accept BTC or ETH. At the

time, Schwab and Fidelity were barely accepting BTC.

And so that was the spark. That

was the thing that said, not only do we need to be able to give

these new assets away because it helps

people manage their tax obligations,

but also we need this as a

critical use case for this infrastructure to say

that there's an opportunity to build robust Internet native

philanthropic infrastructure alongside all of the speculative,

profit driven financial infrastructure that we are building to

upgrade the financial system across the world. And

I think that's a really powerful use case for people to get to latch

onto as they are trying to explain to their

friends, to their family, to their communities, to their government,

to their legislators about what the value of this

technology is. Endowment winds up serving this, this really

lovely use case and storytelling

narrative for the broader industry. And we're really proud to

be able to do that. I love that. And I love that

it fits nicely into what we're trying to do in our community, which is

to educate accounting and tax professionals, because what you guys

are doing is directly a benefit to tax practitioners

that may know how to leverage dafs in the traditional

world, but may not know how to do that, or may not know the steps,

may not even know that that was possible or an option for their clients in

the crypto tech space. So just taking a quick step

back before we get too far ahead of ourselves, just so that

the audience members who may not be familiar with dafs, can you just give a

little bit more context on that and just how they

may be, how they're currently used as a philanthropic tool

for tax savings, and how you kind of envision them working with crypto

as well. Yeah, dafts are really cool. And nobody

knows about dafs either. We'll go to conferences and we'll be

like, do you know what a DAF is? And universally, nobody knows what a DAF

is. And of course, financial

advisors, wealth advisors, tax professionals, they know what dafs are because it's their

job. But in the same way that people know what a

401k is or know what an IRA is or know what a health savings account

or even any number of 529

is, a lot of people know what some of these tax mitigating accounts are.

But for some reason, like, the DAF is kind of like the

forgotten stepchild, and, like,

it's so cool and it's so powerful. And we think

so many people who don't have dafts right now should have dafs. So

if you've never heard of a DAF before, listen up. So,

effectively, a DAF is like a charitable checking account. It's

not exactly a checking account. It's not your money. You give

into a DAF, and the money is gone forever. Right? You give into a DAF,

and it's like you're giving to a nonprofit, but you're

holding those DAF assets. What you gave to that DAF

at that nonprofit gets held in the donor advice

fund. And now you have what are called advisory privileges.

Right? So if you're the donor, it's a donor advised fund. Right?

So very semantic, right? So you give to a DAF,

you are now the donor advisor. You get to advise on

how that money is invested until you advise

on how that money is granted. And you can do one of two

things with money in a daft. You can grow it or you can

give it away. And when you grow it, you

make choices about what you want to allocate it to. And the

DAF provider provides you with those choices. So they say, here's a

library of choices of different investments that you can make with the

assets that you've already donated. And when

it's time to grant, you create what are called grant recommendations. And those

are distribution requests. Effectively where you're saying, hey,

distribute $1,000 of my donor advise fund.

It's not really your donor advise fund, but distribute

$1,000 of the donor advise fund that I am the advisor

of is a more accurate way to say it, and

give it to UNICEF. Right? And the

nonprofit's job, the donor advice fund provider, their job is

to say, okay, did you get anything for making this grant recommendation?

And you say, no, I didn't get anything. I didn't go to a gala. I

didn't get tickets. I didn't get some material

benefit from this grant recommendation. And they say, okay, great.

They turn to the organization. They say, hey, organization, are you giving

anything to the donor in exchange for this and the organization says, no,

no, we're not. This is going to this cause and this cause only.

And we are in good standing with the IR's. And once those two

things are solved for, the donor advice fund provider will

send a check or stable coins, in our case, to the

nonprofit. And the nonprofit receives the money and they've

now fundraised for the program. So what does this mean

substantially for an individual? Well, it means that you can now

separate the how much should I donate question

from the where should I give whatever amount I

donate in the tax year 2023.

Right. You can now have a holding cell,

effectively, for your charitable assets. So if you have a big

year, one year, right. If you make a ton of money

one year, that's generally when people use dafs, is

they say, I have more money to give in order to mitigate my tax

obligation, then I. I meaningfully know what to do with when it comes to

grant making. And so what they do is they put

a big donation into ADAF, and then they take their time, they grow

it over time. They give a little bit out each year. They

find some organizations that they want to get involved with. They get involved with them,

and then they make some gifts to that organization. Right. The DAF is

this more flexible way of

giving that allows you to make a financial wealth

management planning decision every year about what you want to

give and separates that from, okay. Now, you

also need to decide what causes you're going to support with that

gift. And that's really powerful. It kind of makes

you like your own. It's almost like a family foundation

in a box kind of thing, but with less paperwork and less overhead. And

the nonprofit, the DAF provider, that's endowment in our

case. We are the DAF provider. We're a 501 C three

nonprofit, and we go

off and do all the diligence work, all the reporting work, all the bookkeeping,

all of the investment management, and all the things that you

would normally have to hire people for if you were to open a family foundation.

You don't have to do that with a donor advice fund. And so that's why

DAFs are like the most popular giving vehicle in the US

by year over year growth. And it's like a $250

billion philanthropic

market. So there's a quarter of a

trillion dollars locked up in donor advise funds.

And historically, the largest donor advice fund providers have

been offshoots of major brokerages. So people like

Fidelity, Schwab, Vanguard, Merrill Lynch,

E Trade, if you can name the brokerage, they have a

charitable arm, and that is serving as a DAF

provider. We said, like, well,

we're from the Internet, and we don't really do the

Fidelity Schwab Vanguard thing anymore,

and we want something new that's kind of for people from the

Internet. And so that was the idea behind starting

our own community foundation that is an expert in

taking digital assets, but also is backwards compatible

and does all the same things that you would expect from your normal DAF

provider. And that's. And that's really what a DAF

is in a nutshell. It's like this way for you to each

year, you know, if you are itemizing your tax deductions, you should

be. You should have a DAF that you give to.

That's what we say, at least. It's, like, best practice, although we don't give

tax advice. And, you know, I'm sure there's plenty of disclaimers here,

but, like, if you're somebody who is itemizing

your tax deductions and thinking about tax mitigation and wealth management

every year, ADAP is just another tool in your tool belt

to help make sure that you're not paying more than you should be

to Uncle Sam. Yeah. We want to be paying only what

we're obligated to play, and we don't want to pay more than that.

I think that one clarification that I just want to understand for

my own purposes is when you contribute to a DAP,

and you mentioned, obviously, in this realm, you could have

that DAP invested in bitcoin or ethereum or whatever,

is that tax benefit on the amount you donate

at that time or when you distribute it from the DAF to those.

Charitable organizations, very importantly,

it is only at the moment of donation. Okay,

so the way to think of. Yeah. Of donation to the

deaf. Right? So when you give to a DAF, you're giving to a

nonprofit, that gift is irrevocable. You can

never have that money back. And that is the moment where you get the

tax deduction. Everything that happens after that

moment of contribution to the DAF happens tax free. So if

you put $1,000 into a

DAF and you turn around and you put that into.

Let's take the traditional finance scenario for a minute, and you put it

into spy, right? Which is what is the

sort of, like, medium growth option at most staff providers, is

like a ETF that tracks with the market

effectively. Right. And that

$1,000 grows to $1,500 over the next

five years. Right. You do not get a new

deduction for that $500 gain that has now, that

is now dedicated to going to philanthropy. That growth just

happens tax free. So no tax is owed

on that growth because that growth actually happened while the

asset was being held by a nonprofit, by a tax exempt

nonprofit. But you, the donor, are only ever getting

the deduction at the moment that you make the first gift. Right.

The grant recommendation is not a new donation. You

are recommending a grant from one nonprofit to another

nonprofit. That makes sense. So, basically,

like, it's. It's 1231, and this might not be, this may be too close to

the deadline, but you're like, I don't know who I want to give to, but

I know I want to give. So I'm going to give to adapt so that

I can get the tax benefit and deal with where I want that money to

go when I have the time to do that. And then if you

donated $100,000 and that goes to a million, well, now you've just had

more of an impact. And, you know, your money, your

philanthropic gesture goes for a. That's exactly right.

And it's funny that you should mention 1231, because

we in the crypto space, think

of time and blocks. And

I got an email from my previous donor advice fund provider

in early December that was like, all gifts need to be made by

December 21. So most community foundations will say,

you've got till ten days before. In order to guarantee that it gets in

by the end of the year. We'll take crypto gifts up until the last block

in 2024. Yeah. And what is so

exciting about getting to rebuild this infrastructure from scratch is

we're doing end to end donations, right? So

donation instigation through to liquidation and deposit at the

donor advise fund in one atomic transaction. So if you can get

that transaction into a block, you've got a timestamp

that shows that this donation happened

within this taxable year. And, like, that's how it should be, right?

Like, that's how financial systems infrastructure should work,

is that if it's, you know, it's kind of like if you postmark something by

election day, like it gets counted in the election, right? If you post market

transaction, if you get at that transaction mind,

into a block before the end of the year, that should be a

valid charitable deduction. And that's exactly how we operate. And so I

think there are big things that we do differently because

we're a smart contract protocol based DAF

provider, and then there are little things that we do differently. And sometimes it's the

little things that showcase just how

big of a step forward we're taking in infrastructure

capacity by moving

the DAF into an on chain environment. And

so I just love that example. So sorry for the tangent, but no.

I love that this is why we're here, right? We're here to get into that

stuff. So speaking of, kind of like diving into the details a little bit

more, can you kind of walk us through what it looks like to set up,

adapt just so that those folks that are maybe, maybe thinking about doing it on

1230 or 1231 understand maybe what that process looks

like and maybe if they need to start a couple days beforehand to just get

ahead of it. The good news is

you could theoretically start this on the 31st and get your gift

done. Opening a daf is three clicks away.

I encourage anybody who's listening to this podcast right now

to just open up a browser, open up a new tab, go

to app dot endowment.org, and you

can open a fund in three clicks. It is

super easy. And again, like one of the little things that we do that

it just kind of feels like, duh. But honestly, like,

you still have to fax in paperwork at a lot of community foundations these

days. You still have to go through additional KYC. That's not required

legally, but that like brokerage is required because they have

other compliance concerns because dafts aren't their main product. So

they'll still make you give your social and then go run a background check on

you. And you have to wait a couple days and then you got to talk

to somebody and then you'll get your daf. No, none of that. At

endowment come, you sign up, you connect with an email address,

social media login, Google account, Apple

account, any ethereum enabled

wallet we accept as logins. And you provide some

basic contact info, a name for your DAF and a description, click a

button and we actually deploy that contract on

base automatically for you for free, no

minimums. Wow, awesome. And so, like within

seconds, you have a donor advice fund deployed on chain

that is ready to service inbound assets

as donations. Very cool.

So along this kind of, kind of following that, you

know the discussion through that. You know what, when you do create a

dev, what is the, what does it

look like? It sounds like it's a smart contract that is

holding the funds that are then distributed somehow in some

way. Can you talk about

from a security standpoint if it is smart contracts? Do

you guys have audits on those smart contracts? What does the security

of this look like? Endowments v

two protocol has undergone two different independent security audits.

Awesome. Our v one underwent a single security

audit. We no longer use the v one contracts anymore.

We use a series of multi signature wallets

and hardware wallets behind those multi signature

wallets to manage the entire endowment protocol.

The endowment protocol is a suite of smart contracts.

It's basically one smart contract for every donor advice fund

and one smart contract for every individual

nonprofit. So, effectively, what we're building is an

ecosystem of smart contract addresses that are

serving as, like, our fund management system

for donor advice funds and their recipients.

It's really cool because that means all of our

activity, any financial monetary movement of

capital, whether on chain or off chain, is

represented through some on chain transaction. So we create

either a receipt token if you're moving into off

chain investments for DAF assets, or we are actually holding the

underlying digital asset in a 46 26

vault. That is a pool that each

DAF gets a receipt token for their share of the pool of invested

assets that are owned by endowment, the nonprofit. And so we're

basically using smart contracts as a generalized on chain

custodian and having endowment bring its tax

status as the administrator of that protocol. So you'll often

hear about protocols, have the nonprofit Swiss

foundation, that is the administrator of the protocol. They keep the lights on, they

keep the thing running. They've got some people who are making sure

that all of the contracts are up to date, that they're

finding bugs, fixing bugs, doing redeployments

as necessary, increasing function functionality, so on and so forth.

That happens at the swiss foundation. And then you have the labs

entity, and the labs entity is the one building new versions of the

protocol, right? The one doing all of the sort of like,

venture backed activities, the sales, the marketing, all of the different things

that you would expect a software company to do.

And they have that two entity architecture. We at endowment have the same thing. We

have a labs entity. It's called Endowment Tech. And they build the

protocol and license it to the

foundation entity, to the nonprofit entity. But in our case,

instead of a swiss foundation, we have a us 501

nonprofit public charity and public benefit corporation

based out of California. So we have added compliance

hurdles to go through, as you can imagine, by not housing our

nonprofit entity offshore. So we. We

go through extra lengths to make sure that we're meeting all the compliance

requirements of being a public charity and 501

in the US. That means we have

more intense requirements around proof of reserves

and financial audits. We just finished our first independent third

party financial audit under California state law for the

California state attorney general it turns out the math does

really, the chain does really good mathematic, and it does it right

every single time. We were super, super proud of the results of that audit,

and we have some great blog posts about it if you want to read about

more of that. But we also have a constellation of

custodians, depending on what it is we're holding.

We very publicly talk about taking in anything with a liquid

market. If you can sell it, we'll take it

as a donation, basically.

And in order to do that, we have to have a

wide range of different custodial options, whether that's unchained or

Anchorage or Coinbase custody, or

even being. There are basically

no other community foundations out there in the world that have

comfort with multi signature wallets, with the

ability to self custody assets with decentralized exchanges, and

liquidating on decentralized exchanges with NFTs and

NFT custody, or participating. Participating in NFT

auctions at different NFT houses around the world.

That's required us to build this network

of different custodians. So we use USDC

as our base token for the entire protocol. We chose

USDC because they're the gold standard in us based compliance when it

comes to stablecoin issuance. We can audit their accounts.

We know that they have reserves, they have great resiliency when it comes to

DPEG risks, really strong custodians.

But on top of that, we have our own Mercury bank accounts that are part

of sweeper FDIC insurance pools that give

us up to $5 million in coverage of deposits. We have

our own insurance requirements, both DNO and then

we are constantly working on tech and cyber insurance, crime

insurance, all those different kinds of things that are commonplace at

community foundations around the country, but are not nearly as complicated

because they're nothing holding as complex of assets. And so because

we've built this specialty and complex asset custodianship,

we've had to build a partner network that enables us

to go out and say, we can custody those things as a tax exempt

501. And so whether

it's buying stocks and bonds and equities for our

traditional investment portfolios for DAF assets at

Fidelity, or it's all the way up to us self

custodying rocket pool Ethan and

offering that as a DAF asset option,

we're really trying to build this

muscle of how good can we get at

complex asset custodianship? And we're even working into things

like LP interests and venture funds, S Corp and C

Corp interests, property, real estate

houses, cars, boats. There's no reason why

somebody should get turned away for wanting to give something away.

What that requires is a community foundation that is very comfortable

with securing and custodying complex

assets. And historically, that's been reserved for the really, really

large providers. But because we've gotten all this experience with

crypto, it's really taught us how to do this across the entire

spectrum. Happy to dive more into any of

those different risk areas. We also have a great risk

framework published on our docs site. If you go to docs dot

endowment.org and you click on governance, you can read our Risk

framework, our controls

and different policies and procedures,

our code of conduct, all of the extra layers of

security that we have to put on top of the fact that we have this

audited smart contract protocol that

involves a lot of people. You got to have the internal controls as well.

There's many, many different areas to risk and compliance. But

the 501 is our Faberge egg. There's nothing to

the protocol if we can't give a tax exemption. And so we have to protect

that tax exemption at all costs, basically. And that

means being compliance first from day zero. And

so we've really taken it to heart and tried to

build an expertise in that kind of custodial security

as an administrator of a protocol that necessarily

must be a custodian in order to provide the tax benefit.

I love that. And it sounds like you guys are doing a really good job

of drawing tech from different aspects of the industry as well, because it sounds like

the way that you're describing the way that these donations work from the

crypto side, it sounds a little bit like a liquidity pool where you're giving people

receipt tokens for their share of that pool or for the share of the assets

that they put in as a way to on chain

identify how much, if that pool already distributed, how much of

that you're owed. Very cool, right? Like

there's this feeling of, you know, you go to.

To a community foundation, or you go to a, you know,

a commercial daft provider like Schwab or fidelity or vanguard

or National Philanthropic Trust or Silicon Valley Community foundation, or, you

know, there are all these major, major providers, and they're great.

You know, like, we stand on the shoulders of giants, right? But, like, their

infrastructure is limited in that they don't have that natively

transparent capacity. You're trusting

that they're holding this underlying asset and that they've

credited this much of that underlying asset to your account.

And what we have basically is like, qualified custodian best

practices like, what does it mean

to be a financial institution in the US? It's

like you're segregating accounts,

you're keeping good records, you're doing full reporting and disclosures to

the government. You're doing. All these little things add up to being a

qualified custodian. And our point

of view is the chain helps qualified custodians do their job

more transparently, more easily, and with

less trust required from their clients of their

capacity to operate in a trustworthy manner.

It's that verify, don't trust us state.

And so for us to have, if you have the knowledge, if you have

the. The curiosity, if you have the depth, the technical depth to

go in and look at the contracts, you can see every

dollar that you've donated and how it's attributed and how it's allocated,

and that the underlying resource is sitting there waiting

for you to claw it back and give it to a nonprofit. And that's

also big in the world of philanthropy, where people make a ton of

pledges but don't actually follow through on those pledges. And

it's like, hey, we've got the receipts.

If you give on endowment, you gave, and we

can, hey, come

look at the chain kind of thing. And I think

that's part of what it means to try and have

crypto cross the chasm. Right? That's what it means to

try and communicate what the value of this

technology is in a way that doesn't require any understanding of the underlying

technical mechanics of it, is to say that, like, this helps

people be held accountable for the actions that they say they're

taking and to

not allow them to take advantage of,

you know, the heartstrings of the community by saying, I

pledge x dollars and never giving them, because people. Don'T always fall off on

that. They're like, oh, great, that person is pledging it. But that doesn't mean that

that actually went through. So that's very interesting. It's,

again, speaking to the ethos of the tax and accounting professional, where it's trust but

verify. I can say I trust you, but I still want to

verify under the hood that everything is on the up and up. And what you're

saying it is. So. Well, one thing, just to throw in

another example here, which is one of my favorite

partnerships that we did from last year was directly with

Etherscan, and we've now integrated

the entire endowment contract suite into Etherscan

and constantly update it. So if we have public labels

for contract addresses, we continually update those in Etherscan.

And that means when you go to Etherscan, a third party, right? A third

party, publicly auditable blockchain explorer, and you

look at an endowment transaction, you can actually follow the

money yourself in plain English to see

how we are moving it into the hands of the nonprofit.

I think, like, the

prior status quo is

comparatively way less sick.

Like, the prior status quo is pull up the organization's

990, which is their tax filing, and look at

their aggregate grant making reporting. So they bundle everything. They

don't show you individual transaction level donation

events. They just bundle everything. They say, this is how much we gave to this.

This is how much we gave to that. This is how much we gave to

this other. Right. But you can't see this daft.

Gave this much to this, and then it moved out to that, or

that, then went and put it and invested it and then moved it out to

their bank account, right. No, there's not that same level of transparency. And so

for us to be, like, really pioneering

this idea of transparent philanthropy that's still

anonymized by leveraging the blockchain and

a mix of, like, hashed identities with, you

know, labeled contract addresses, it

means that anybody can come in, like, see for

themselves that this philanthropic activity is happening in

a way that otherwise, you have to trust the community foundation, or you have to

trust the government reporting, or they're reporting with the government. And,

like, we all know that that's pretty slippery. So

I think there's something really powerful in

and real in moving philanthropic activity on chain,

because it gives less wiggle room for people to abuse the

system. I love that. And so, speaking

to this, where do you see the

intersection of crypto assets and philanthropy happening

heading? Do you see it? What innovations or trends might

we expect to see in the future? And, I mean, obviously, this is an innovation,

what you guys are doing, but where do you see this headache in the next

five to ten years? I think in the next five

to ten years, youll see

a crypto native community foundation become a

top ten nonprofit in the United States.

Theres just so much capital formation thats going to happen around the tokenization

of everything that I really struggle to see

how the

current top five big five community

foundations that sit close to or inside of the

top ten of nonprofits by size

in the United States isn't joined by a crypto

native version of a similar kind. And

obviously, we hope that's us, right? That would

be sweet. That means we're doing multi billions of dollars in

grant making entirely on chain, every year.

And that would be just massive, right? That would be huge.

But I also think that in the same way

that we went from offline to online, and

the consumer's expectation also went from offline to

online, we're going to also see a transition from

online financial services to on chain financial services, and the

consumer expectation will follow.

And in that regard, I think theres this opportunity

to say not only will crypto based

philanthropy, digital asset based philanthropy start to push up

into significant percentage of

total giving market share right now, its single digits or

basis points of total philanthropic

giving, but seeing it push up into

competing with traditional asset giving. But we're also

going to see, I hope

that we will see a large migration of people moving away

from more opaque institutions to institutions

that are built on community governance and inherent

transparency from day zero. And that will be the

disruptive force that drives the transition from online

to on chain over the next

five years. A lot can happen. And

yeah, I'm really excited about it. I think it's just

so important that as we make these upgrades to our financial

infrastructure, that we also not leave

the communities and the organizations that are often

left behind in new technology behind

when we have the power to do something about it now.

And I think in some ways that

feels like, just on a very personal note,

like my fate or

destiny, and to some degree also

endowments. Fate or destiny or reason for

existence. That's awesome. It's continuing discussion

on forward looking what are endowment strategic goals for the next

few years? And are there any new features or expansions

planned within the platform? Oh, yeah. I mean,

one of the things that's super unique when it comes to endowment versus other

DAF providers is that we're one of very few DAF

providers with a full time venture backed engineering

team working on the underlying technology

that's powering the DAF provider. Most DAF

providers are either entirely nonprofits

and don't have the labs entity

or they are.

Their engineering team is part of a larger brokerages

engineering team and the DAF is the last thing they work

on. So not only do I

like there are things that we have planned, but then there are also the things

that we don't even have planned yet that we can't even dream of yet

because the market isn't

mature enough yet for those ideas to blossom. Kind of like

Uber. Before there was Uber, nobody dreamt of Uber.

One of the things that I love about what we've done, we have. One of

those examples is the universal impact pool. So people oftentimes rag

on dafts for people coming dropping money off at

a DAF and never to be seen again. The money sits there and it never

actually makes it to a nonprofit. And donor advice fund

providers generally don't have any capacity to do anything about that.

We said, that seems silly. How can we use the new

on chain technology to create a better

end of life scenario for idle dafs, for dafs that have been

forgotten? What we do is we say if a DAF goes

idle for two or more years, that we

start shaving off of that DAF and putting it into the universal impact

pool. The universal impact pool is a donor advice fund

in and of itself. It's actually a community fund. It's got a mission and a

sort of stated grant making purpose. So it's kind of like a field of interest

fund. And we have it

programmatically give grants every quarter

based on quadratic matching. So we look at all of the

activity because we have on chain events for every single gift and every

single grant. We look at every on chain event that happens over the

course of a quarter and use that as a voting, as

a voting round for a quadratic match.

We literally partnered with Gitcoin to use the same algorithm that

powers gitcoin, GG 20 and GG

into the future, get coin grants into the future and said,

okay, let's have that power and ecosystem wide

matching mechanism for all the gifts that are happening on

endowment. And that does two things. One is it incentivizes nonprofits

to do their fundraising on endowment, because the more people who give on endowment,

the bigger the match will be from the universal impact pool. And

secondly, it incentivizes

staff holders to be active philanthropists to say,

hey, don't get pruned into the universal impact pool.

Or better yet, give into the universal impact pool on your own

volition, rather than having us

trim it for you. And hopefully that will inspire you to do more giving.

Because what we know is that when people are more active with their daft, they're

more likely to top it back up. This idea

that there is you only want people to put things into your DAF

and you don't want them to put it out is part of why

dafts get a bad rap. And so what we're saying is like,

the problem isn't actually the legislation or the regulation around

dafs. It's not that you need some minimum payout period. It's that you

need DAF providers who are

incentivized to get paid when money goes out the door.

And so the problems with the model, not with the

regulatory environment, and we're really trying to

build from the ground up in a way that tries to address

some of those criticisms. So really, our focus for the rest of the

year is to, is to really make sure people in your

audience and beyond know that endowment is

a crypto native death. But you don't have to know anything about crypto to use

endowment. We are, we like to call ourselves boomer

proof, and anything your old

daf does, endowment does. And really

what we think is that anybody who cares about

the experience that they have when they go to make a grant should consider using

endowment because it's really one of the best user

experiences in the industry. We'll continue to polish

that, continue to work on it, then. I think the other thing that's big and

down the line is we really want to decentralize our governance of our board of

directors. There's no 501 in the country right now

using a token based electorate body to

elect its board of directors. And it seems only

natural that we would decentralize our governance in that way and

have a decentralized accountability mechanism and continue to decentralize

the operation of the protocol itself. So

there's lots of progressive decentralization to come. But

even before that progressive decentralization, our focus is on making sure that we

have a large, sustainable, durable,

thriving, independent community foundation that is

providing a real service to a real group of

clients, and then the decentralization

will follow. So that's sort of what's ahead for

us. I love it, and I love the ethos of kind of

this dow managing things

and having that be decentralized. It's so

important in these types of ventures because you can really have

that much more impact by making it not only

transparent but also decentralized. And I think that it's something that's much needed

in this space, and it can also provide a really nice tax benefit as well.

So I'd love to kind of close things out. I know. I want to respect

your time, just with any final thoughts that you might

have and anything youd like to share with our audience about the power

of blockchain and enhancing charitable giving.

Preston well, so everybody whos listening to this podcast either has clients who have

crypto or have crypto themselves.

And what I want everybody to know is

that you should never worry about whether or

not you could ever donate some of that crypto to

charity. We will find the liquid market for it,

even if it's like pre launch tokens or venture capital

interests. We are interested in the most creative, most complex

donations that people can come up with. And really we see our niche as

complex donations with our bread and butter being in crypto.

So if you can dream of a gift that you want to make, we want

to hear about it. And if somebody approaches you with a gift that they want

to make, or if they have a perfect DAP asset, keep

in mind this conversation and remember that you should never say no to a

donation. The other thing I'll say is,

we're really looking forward to bringing wealth

managers and tax advisors into a

collaborative experience with endowment DAff holders. So

endowment will also be unique to your audience

insofar as we have new, powerful collaboration

tools where you can queue up the perfect donation, the right

donation at the right time every time for your clients

by getting to collaborate with them in the DAF provider

themselves. And so you queue up the right transaction, they go in one click,

approve it. And I think a lot of times when we talk to CPAs

and FAS and RAs and family offices, it's

like there's this email thread that happens where they talk about what they want to

give and then hopefully the translation doesn't get lost. And then they give

something and it's like, oh man, they gave the wrong thing, right? We are eliminating

that. So you should never say no to a gift. And better yet,

you should queue up the gifts that you want to give based on what

you already know about your client's tax situation. And

endowment is really the only place where you can do both of those things. And

so we hope we'll see you and your clients with us this giving season,

or even before then. If you have a DAP that is already funded at another

provider migrating, super easy. But

overarchingly, we're really existing just to be the

best possible partner for people in your audience to do complex

donations. I love that. And so for listeners that are

interested in establishing a DAP or exploring more about endowment, what's the best

place? Or where can they find additional information for that?

The easiest place is our website, of course, endowment.org dot. You can follow us

on Twitter endowment e n d a

o m e n t d o t o r g so

endowment.org spelled out. Follow us on Warpcast or

Farcaster. Whatever forecaster client you use at

endowment, you can join the channel

philanthropy. If you're a Warpcast person that's hosted by

yours truly. And you can always, of course, join our

discord or check out our docs. Discord gg

endowment that's endaoment

and docs dot

endowment.org dot. So plenty of

resources you should be able to find us. We're also deeply working on our SEO,

so even if you're not trying to find us, you should find us.

So yeah. And feel free to reach out to me. I'm

obbyheger on twitter. He on

warpcast. Or you can email me robbyndowment.org

dot awesome. Well, Robbie, I want to thank you so much. This has been an

amazing conversation. I think there's a ton of value in here and I'd encourage anyone

who's been listening to check that out and to start to

advise your clients on dapps and the benefits they can get out

of them. And if they're in crypto, this is the place to be in down.

So oh, I have one Easter egg. Can I get one Easter egg

before we close? We just launched an educational

website as well. It's very tongue in cheek. It's called

daft Squatch XYz. So d a

f, squatch s q u a T c h

xyz. If you're looking to educate yourself or your clients

about dafs, this is a free resource that we made. It's got a little bit

of endowment mentions, but it's mostly endowment agnostic. And it's a great

way to learn in a fun way about what a daf is.

I love that. And you know what? You know, being partners of the crypto CFO's

community as well, we should definitely set up some, some CPE content as well for

those, for sure the counts to get actual credits for this, this stuff

and be able to put that towards their

biannually credit threshold. So thanks again,

Robbie. We really appreciate your time and we'll chat again soon. Thank you.