Have you ever considered the possibilities that arise when philanthropic capital is directed towards funding startup companies? In this episode of The Angel Next Door Podcast, host Marcia Dawood sits down with Sally Boulter from Impact Assets to unravel an often overlooked but transformative investment approach—using donor-advised funds to fuel entrepreneurial ventures. If you're an angel investor or contemplating entering the startup ecosystem, this episode will give you a fresh perspective on navigating investments impactfully. Sally Boulter brings a wealth of experience to the table, having a diverse background in nonprofit fundraising and impact investing. Impact Assets, a nonprofit financial services firm, is tailored to investors who wish to make a difference while achieving returns. Sally's journey from traditional fundraising to becoming a pivotal player in impact investing highlights a unique blend of passion for societal betterment and astute financial strategies. Throughout the episode, Marcia and Sally discuss the mechanics of how donor-advised funds can be employed to support for-profit startups, offering both new and seasoned investors a blueprint for high-impact investments. They explore the simplicity and flexibility of setting up a donor-advised fund, the risks and rewards associated with impact investing, and real-life success stories like that of Seth Goldman, who amplified his philanthropic reach after his work with Honest Tea. This episode is a must-listen for anyone eager to understand how to make their investment dollars work harder, not just for financial gains but for genuine societal progress. You’ll walk away with actionable insights and a newfound enthusiasm for merging philanthropy with entrepreneurship.
Have you ever considered the possibilities that arise when philanthropic capital is directed towards funding startup companies? In this episode of The Angel Next Door Podcast, host Marcia Dawood sits down with Sally Boulter from Impact Assets to unravel an often overlooked but transformative investment approach—using donor-advised funds to fuel entrepreneurial ventures. If you're an angel investor or contemplating entering the startup ecosystem, this episode will give you a fresh perspective on navigating investments impactfully.
Sally Boulter brings a wealth of experience to the table, having a diverse background in nonprofit fundraising and impact investing. Impact Assets, a nonprofit financial services firm, is tailored to investors who wish to make a difference while achieving returns. Sally's journey from traditional fundraising to becoming a pivotal player in impact investing highlights a unique blend of passion for societal betterment and astute financial strategies.
Throughout the episode, Marcia and Sally discuss the mechanics of how donor-advised funds can be employed to support for-profit startups, offering both new and seasoned investors a blueprint for high-impact investments. They explore the simplicity and flexibility of setting up a donor-advised fund, the risks and rewards associated with impact investing, and real-life success stories like that of Seth Goldman, who amplified his philanthropic reach after his work with Honest Tea. This episode is a must-listen for anyone eager to understand how to make their investment dollars work harder, not just for financial gains but for genuine societal progress. You’ll walk away with actionable insights and a newfound enthusiasm for merging philanthropy with entrepreneurship.
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Marcia Dawood
Sally, welcome to the Angel Next Door podcast.
Sally Boulter
Thanks, Marcia. Thanks so much for asking me to be here. I'm really excited.
Marcia Dawood
Oh, my gosh. Okay. So many things. First of all, using philanthropic capital to invest in a startup company is. I've talked to so many people, even seasoned angel investors, and they're like, it blows their mind. They did not know it was possible. So we're going to really just get down and dissect all of the things. But I feel like, Sally, you have been in this space for so long.
Marcia Dawood
We met back in, what, 2015 or 2016 when we were raising. Yeah, raising the Next Wave Impact Funds fund. And there were so many people who were super interested in getting involved. They wanted to be a part of it. Some people were not accredited investors and some people wanted to use their philanthropic capital in order to invest. We set up something through Impact Assets and we're able to do that. So we're going to get into all those things. But let's just start off.
Marcia Dawood
Tell us a little bit about your background, Sally, and a little bit about how you got into Impact Assets.
Sally Boulter
Oh, sure. Thanks again for having me here. This is just. It's great. So most of my career I did fundraising. I worked for a lot of different nonprofits in Connecticut, New York City. And when my family moved to the Mid Atlantic, I came across Calvert foundation, which is now Calvert Impact Capital, which is an impact investing firm. And they.
Sally Boulter
They're also a nonprofit and they raise. They need a little bit of philanthropic capital for their investment product. So I started raising money from them. And it introduced me to this amazing world of impact investing. And when there was an opportunity to join Impact Assets, which is a spin off of Calvert, and they marry both my two loves of impact investing and philanthropy, it was the obvious choice for me, and I just love doing it. But I should probably tell you a little bit about Impact Assets and who we are. And so Impact Assets is a nonprofit financial services firm. Our main product, if you will, is a donor advised fund.
Sally Boulter
So for those of you who don't know what a donor advised fund is, it's a. It's. I've heard it called a philanthropic checkbook. And it is. People open them when they've had them when they want to make a tax deduction, so they. Or take a tax deduction. So maybe they've sold a business or something and they want to take a tax deduction in that particular year, but they don't necessarily know where they want to grant their money out to. So they'll open a Donor advised fund account, take the tax deduction in that year and then grant money out over time.
Sally Boulter
There are many donor advised funds out there. There are some focused that are like commercial donor advised funds like your Fidelity, Schwab Vanguard and then there are several community foundations wherever you're based. I live in Baltimore. There's Baltimore Community Foundation. Every community seems to have a community found and their focus is really on helping those communities now. Impact Assets niche in the space is around Impact Investing. When, when we were started, our founders were looking around at the world of finance and looking at donor advised funds and seeing all this untapped capital that could, that was put aside by people who care about the world, care about people and they had set it aside to be granted out. But all that money was sitting there.
Sally Boulter
Trillions of dollars are sitting in donor advised funds that have yet to be activated. And so that's our, really our niche is that while you're waiting to grant money out, all of your investment options are impact investment options. In about 2015 or so, impact Assets started opening up the possibility for our clients to identify their own investments and make those and make it possible for you to bring a deal to Impact Assets fully baked. You've sourced it, you've diligenced it, you've got it structured, but you just want to use the assets in your donor fis fund to make that investment. So they started offering that to clients, as I said about 2015, really started doing it on a more regular basis and it has really taken off and it's what we're known for in the space. We do about one a day. Typically we have over a thousand separate holdings, much of which is what we call client recommended investments. Those are the bespoke investments that our clients have recommended.
Marcia Dawood
Okay, so with everything that you just said, let's walk through what happened with the Next Wave Impact fund. So there were 10 people I believe that wanted to invest using their donor advised fund. So let's just say there's a person, we'll call her Lisa and she has a donor advised fund already at another institution. She would then take that money and move it over to Impact Assets.
Sally Boulter
But how Next Wave got started was I met Wendy and she was telling me about how amazing this fund was. And so I reached out to a bunch of my friends who are not accredited investors. Right, I'm not, but all people who could afford to put $5,000 into a kitty basically to make the investment. So we each put $5,000 into a donor advised fund that we opened at Impact Assets. And then we recommended that Impact Assets make the investment in Next Wave. So it was 10 people that did it. And I did it as Sally Boulter. I did not do it as part of my job.
Sally Boulter
I just, I wanted to be part of that fund. I wanted to participate in the learnings that were available. And that was, it just came about in that way. It was like people I knew or people that I knew and we just all joined together and none of us are accredited investors. We're all just jumped on this train. And so that's one of the things that is great about donor advised funds is that you don't have to worry about the accreditation because the donor advised fund itself is making the investment.
Marcia Dawood
Right. And with with Next Wave Impact Fund, we didn't necessarily have to have people pulled together, but it just was set up better that way for the fund. But let's just say any other investment that somebody wanted to make, they could do that directly with their own donor advised fund through Impact Assets. They wouldn't necessarily have to pool with other people.
Sally Boulter
Oh yeah, 100%. So anyone could if their donor advised fund's not willing to make the investment. Because you should definitely check with your own donor advised fund to see if they'll do it. But yeah, if they're unable to do that, then you can make a donation to Impact Assets, open up your own donor advised fund, recommend the investment and then we'll execute and hold that investment for you in your donor advised fund account at Impact Assets.
Marcia Dawood
Right, awesome. So let's take a step back and just say that somebody is interested in using philanthropic dollars. So dollars that you can donate and you will get your tax deduction in order to invest in a for profit company. So walk us through how somebody would do that and like through Impact Assets. And then how what happens so that the money, it doesn't really come back to the person because you can't use that money again. But what does happen to the money if there's a positive return?
Sally Boulter
Yeah. So once you donate money to a donor advised fund, it is no longer yours. It's a irrevocable contribution. So when you. So first, if you want to walk through the process, it's pretty simple with us. Once the money is in your account that you are intending to invest, then there's a very simple questionnaire that we ask you to fill out that says what's the name of the entity? How much do you want to invest? What structure is it? Is it equity, convertible debt, whatever? And then what's your impact Intentionality for that deal, you want to support women founders or whatever that is, you care about the planet. And then let us know who we reach out to at the fund and then you sign that with your computer and you're done. And then Impact assets will reach out to the entity and say we've received a recommendation to invest in your entity and we'll ask them for some materials at the investment documents, their business deck.
Sally Boulter
We ask them to fill out a questionnaire, we do an OFAC check to make sure we're not dealing with terrorists and the like. And then there's no legal reason to not make the investment. We'll make the investment, we review for just a couple things really we're looking at. Does or could the donor benefit from the investment personally? Do they own too much of the entity and are there any concerns on the for the entity, like I said, like terrorists or fraud in the background or anything like that.
Marcia Dawood
And then let's say that entity, then let's say it's a startup company and they grow and they are sold. There's an acquisition, there's some kind of what we call an exit where there would be liquidity event. And now let's say that the amount of money that was originally invested through the donor advice fund, let's say it doubles. So now instead of however much money was originally in the account, now they have, now you have twice as much money. What happens from there?
Sally Boulter
I always tell people you can grant that money out, you can reinvest and reinvest that money in another fund, but you can never like buy a Ferrari with it. It's not your money. It is impact to assets money held with or whatever your donor buys fund is. It's held. We hold that money. And so you can recommend what we do with it, either grant or reinvest.
Marcia Dawood
Right. So that money now has doubled in this particular example and that would be twice as much money that could be then donated to a 501C3, a charity of choice. Or you could take some or all of that money and reinvest it into another for profit company where it could do the same thing. If you were especially, I know for a lot of people that I know who are really interested in backing female founders, they do that. And then when there is a return and that money comes back into the fund, the donor advised fund, then they can turn around and they could make another investment into another female founder or something like that.
Sally Boulter
Yeah, and we certainly have seen that with our donors. One of our more celebrated donors is Seth Goldman, who was the CEO of Honest Tea and when he sold Honest Tea to Coke, he had a big return there and opened a donor vice fund with us. Then he invested in Beyond Meat, among other things, and that had a big ipo. And then like every time that's happened, he's turned around and reinvested and founders who are focused on food and alternative proteins. So he's done a lot of investing in that space.
Marcia Dawood
That's amazing. I love hearing stories like that. So I've had people, especially since my book has been out for the last couple of months, I've had people ask me like, wow, this is so fascinating that you can use philanthropic dollars to invest in a for profit company. Like, how do I really get started? That's always the question. I get.
Sally Boulter
Yeah, I mean, I get it depends on you, you know what you mean by get started. If you're like, oh, I know I have this great company that I want to invest in. An easy way to get started is to open a donor advised fund and make the recommendation and you're done. Because it's super easy. If you're more like, this sounds cool, but I don't really know what I'm doing. There is a really cool new website out there, Cap, and I think it's like catacap app, but we can get.
Marcia Dawood
That in the show notes.
Sally Boulter
Yeah. And it is an amazing way to get started. I just moved a small amount of money, like $3,000 from my donor buys fund into Catacap and there's all these options on there and you can create a portfolio of impact investments using that website I invested in Empower her, which Marcia and I are both familiar with. It's a friend of ours has started this fund for women founders, but there's a ton of choices on that thing and some of them you can invest with as little as 500 bucks. So it's a great way to get started with a portfolio with very little in capital. And it's all philanthropic.
Marcia Dawood
Right. I was just going to say. And you're using philanthropic dollars. So if you went onto catacap's website, at least how I understand it is you could make that donation or it really, it is an investment, but you, it is with your philanthropic capital. So you're not going to ever get it back and buy your Ferrari like you mentioned, but you could at least make that donation and it would be invested into that company. And then if it comes back, it's in your catechap account, that money and then you can do it's basically the same thing that you were talking about with Impact Assets, Donor advised funds, right?
Sally Boulter
Yeah. And even though it's new and the website is beta, the back office for CATACAP is actually Impact Assets. So it is a singular donor advised fund at Impact Assets. So you have the full team that we have. We have six people who work on the investment services team who are monitoring the investments and processing everything and working with the entrepreneurs and fund managers. So it's not some fly by night little operation. It's backed by the, by our organization and we have 3 billion in assets under management. We've been around for a while.
Sally Boulter
There's a lot of comfort I think in having us as back office.
Marcia Dawood
That's great. Do you have a sense for how much money is actually sitting in donor advised funds or how much philanthropic capital could be used to invest in some of these for profit companies?
Sally Boulter
Oh, I mean there's trillions sitting in donor advised funds that are not being activated. But the number of people who are interested in angel investing is, is definitely going to be smaller because it's high risk. But I think what's great about doing it through a donor advice fund is it's easier to take a flyer on something you really believe in or something you'd like to see advanced in the world. Because even if the company doesn't succeed, you've gotten Your tax deduction 1 and 2, you've advanced that effort in the world. Even if the company doesn't necessarily succeed, if you've gotten, if you've funded some little tech company that is trying to do clean energy, you will still have advanced that effort in the world even if an individual company doesn't make it. So I try to think about it that way too. Using philanthropic capital, right?
Marcia Dawood
Yes. I've heard so many people just say, well this seems to me that it's more approachable. It's a way that I can get started. And it doesn't seem so daunting. It doesn't seem quite so scary because I'm not taking money that I might need for my kids college or whatever the story is. Don't, don't invest your kids college fund into angel investing. I try to tell people that all the time. Don't use money that you are expecting to get back relatively quickly because you just never know.
Marcia Dawood
It's. And it's all cyclical. It's just like everything else in the market. Right. I mean right now the 2022 through 2024 was pretty rough when it comes to getting returns and seeing liquidity. But like everything, what goes up must come down and vice versa. So I'm hoping that we're going to start to see clear skies ahead. And we've already started to see more M and A and IPO activity.
Marcia Dawood
So that usually means it'll come down our way right to the early stage stuff and we'll start to see some cool things happening.
Sally Boulter
That's awesome. That's awesome. Oh, I did want to say one thing because sometimes people will ask me, how can you even do this? How can a donor vice fund make these kind of investments? And with Impact Assets, we were started by Impact Investors for Impact Investors. So our articles of incorporation are that the mission that is baked into that is about increasing the flow of capital for impact investments. So that's how we're able to do it. Most donor advised funds, their mission has something to do with granting. Ours is really about impact investing. Although we are full service, don't revise funds.
Sally Boulter
You can make grants and do all kinds of other crazy things, but you can absolutely do this kind of investing with assurance.
Marcia Dawood
I love that. Well, Sally, thank you so much for being on the podcast and telling us all this great information. We will make sure we have links to everything in the show notes. This is something I am personally very passionate about and I know that this can really start to move the needle on the things that we want to see change in the world. So I'm excited just at what I've watched Impact Assets do for the last eight years or so and I'm really excited to see what happens in the future because I think it's just going to keep on going and faster.
Sally Boulter
Thank you so much. It was a pleasure to be here.