Are you a charitable organization? Join our verified registry →
Fidelity manages $86 billion in DAF assets because they embedded giving in their platform. Community banks hold trillions but have no equivalent.
Community banks originate 60% of small business loans and 80% of agricultural loans in the United States, according to the ICBA. They compete on relationships, local knowledge, and personal service. And they lose their clients' charitable giving to platforms that have nothing to do with banking.
Nearly 4,000 community banks hold trillions in deposits. Their clients give to their churches, their local nonprofits, their alma maters. Every one of those gifts happens outside the bank's platform. The bank never sees the transaction, earns no revenue from it, and has no data on it.
The large brokerages solved this problem with donor-advised funds. Fidelity Charitable manages roughly $86 billion in DAF assets. Schwab and Vanguard run similar programs. But DAFs were designed for high-net-worth investors doing tax-efficient asset conversion. Vanguard still requires a $25,000 minimum. Fidelity dropped its minimum to zero in 2020, but the typical DAF account holder is 62 years old with a median balance well above $50,000.
Most community bank clients are not sitting on concentrated stock positions. They have checking accounts, savings accounts, CDs, and small business loans. Their charitable giving is not about separating a tax event from a grant decision. It is about designating a portion of their deposits or earnings for causes they care about.
A $200 monthly gift from a checking account does not need a donor-advised fund. It needs a feature inside the banking app that is as simple as paying a bill.
A client opens their banking app, selects a charity from a verified directory, sets an amount or a rule (a percentage of interest earnings, a fixed monthly amount, a one-time gift), and the bank originates the transfer on its own rails. No separate account. No minimum contribution. No custody transfer.
The bank did not build the verification, the safeguards, or the ledger. It integrated once against a single API surface. The infrastructure handles charity verification (IRS 501(c)(3) status, OFAC screening), pre-transfer policy checks, and an append-only audit trail. The bank retains full control of the funds path.
The immediate benefit is revenue. Every gift generates a per-transaction fee shared between the bank and the infrastructure provider. This is not advisory fee revenue on large invested balances like a DAF. It is recurring transactional revenue that scales with client adoption.
The longer-term benefit is retention. A client who sets up recurring charitable designations through their bank has built something personal on the platform. Their giving history, their tax records, their relationship with specific charities all live inside the bank's app. Switching to another institution means losing that. The same retention dynamics that make Fidelity's DAF clients so sticky apply here, at a scale that works for a community bank.
There is also differentiation. The largest national banks do not offer embedded giving. A community bank that does has a capability that its competitors, including much larger ones, cannot match.
The gap between where community bank clients hold their money and where they give has persisted because no one built the infrastructure to close it at this scale. A community bank with a five-person technology team cannot build charity verification, safeguard engines, and tamper-evident ledgers from scratch.
That infrastructure now exists. It connects to the core systems community banks already run (FIS, Fiserv, Jack Henry), handles everything behind the API surface, and lets the bank originate every transfer on its own rails. The bank integrates once. The question is not whether clients want to give. It is whether the bank will participate in the transaction or keep watching it leave.
If you run a community bank, we can model what embedded giving would look like for your client base. Pick a time and we will walk through the integration and the economics.
Research and perspectives on embedded giving, delivered when we publish.
