There’s a paradox at the heart of modern philanthropy: a gap between mission and intent. Each year, billions of dollars flow into charitable vehicles such as foundations, trusts, and donor-advised funds (DAFs). Yet an estimated 95% of that money is parked in traditional public markets — stocks, mutual funds, and bonds — often invested in companies whose activities directly contradict the donor’s stated mission or values.

As Ken Kurtzig, Co-Founder of CataCap, recently observed, “Some of the smartest money in philanthropy remains underused.” Locked in conventional financial markets, this capital could instead be leveraged to tackle pressing social and environmental challenges — while still generating returns for the donor.

This tension set the stage for a series of recent LinkedIn Live conversations hosted by Investors Circle, a 30-year-old network of impact-driven investors, and CataCap, a platform redefining philanthropy by activating untapped capital in DAFs, foundations, and charitable accounts. The sessions gathered investors and practitioners including Babbie Jacobs, Annarie Lyles, Diane Keefe, and Eli Fadil of Investors Circle, alongside Kurtzig and Sydney Campos of CataCap — voices working to move philanthropic dollars from passive accounts to active impact.

Defining philanthropic investing

“Philanthropic investing is about providing not only an alternative, but a solution to the challenges,” Campos shared in one session. Instead of treating philanthropy as pure giving and investing as purely financial, this approach blends the two. Donors invest their philanthropic dollars into enterprises or funds with social and environmental missions. As those ventures succeed, capital returns to the donor’s account — ready to be redeployed again or donated outright.

Most DAF holders don’t know they can do impact investing.

For Jacobs, accessibility is central: “If I have $100 I want to invest in a company — or $100,000 — I can do so and get a tax deduction. That’s democratizing investing for everyone, regardless of amount.” Platforms like CataCap, Impact Assets, and Align Impact streamline the process, allowing individuals and families to invest in values-aligned opportunities without being bogged down in paperwork or tax complexity.

From individuals to communities

The appeal of philanthropic investing extends beyond individual choice — it’s also about scale. “We want to reimagine how we use our money to develop solutions both for people and for the planet they depend upon,” explained Lyles, reflecting on the ethos behind Investors Circle.

But alignment isn’t easy. “One of the dirty secrets of impact investing is that everyone has a different definition of impact,” Lyles noted. Expectations for returns — financial, social, or both — vary widely, making it difficult to pool capital at the scale entrepreneurs need to grow. This is where networks play a vital role. By connecting like-minded investors who channel funds through shared tools and frameworks, they can aggregate smaller contributions into meaningful support. Platforms for catalytic capital and philanthropic impact investing accelerate that process, ensuring resources flow more quickly to founders addressing issues like climate change, poverty, and community development.

DAFs: From dormant to dynamic

One of the most underutilized vehicles for philanthropic investing is the donor-advised fund (DAF). In the U.S., more than $250 billion currently sits in DAF accounts. Following the foundation model, roughly five percent of that is distributed annually as grants — meaning that 95 percent remains invested, most often in traditional financial markets.

“Most DAF holders don’t know they can do impact investing,” said Kurtzig. Historically, the process involved complex due diligence, investment minimums, and tax compliance — barriers that kept many donors on the sidelines.

Today, new platforms are reducing those barriers, simplifying compliance, and allowing families and foundations to align their philanthropic accounts with their missions. Keefe emphasized another advantage: donors who contribute appreciated stock to a DAF can avoid capital gains taxes, freeing up more dollars for mission-aligned investments.

For her, the motivation is generational. “Although these won’t necessarily have a hockey-stick return, they could have a hockey-stick change-making return. That’s what I want to leave to my kids and grandkids — and to the world at large.”

What do these investments look like?

Philanthropic investing dollars can support enterprises working in diverse, high-impact markets — from renewable energy and local food systems to women’s health and Indigenous enterprise.

Navajo Power, for example, is a majority Native-owned clean energy company developing large-scale renewable projects in partnership with Tribal communities. Its model ensures that these projects deliver lasting local benefits, reinvesting revenues to fund future developments.

Another example is Global Round Table Leadership, a company reimagining organizational leadership by replacing “lone wolf” models with shared, relationship-driven approaches rooted in connection, care, and collective responsibility.

By supporting such enterprises, philanthropic investors expand the definition of “return” — embracing not only financial gain but also social value and environmental resilience.

Steps to get started

For those interested in exploring this model, speakers advised:

• Audit your holdings. “If you open your stock portfolio and cringe, move it to someplace you feel good about,” Jacobs advised.
• Revisit your mutual funds. Many contain companies that may not reflect your values. “Begin investing in the way you want the world to look,” urged Keefe.
• Reallocate a portion of your assets. If you have a DAF, trust, or foundation, examine how your 95% is invested. Even carving out 10% to start can move the needle.
• Start small. With emerging platforms, investors can begin with as little as $100—testing the waters while learning the process.

Looking ahead Philanthropic investing is not a replacement for traditional philanthropy or market investing — it is a bridge between them. It offers a pathway for unlocking dormant capital and directing it toward meaningful change. By making the process accessible, building community around shared missions, and redefining what success looks like, this approach represents a practical evolution in how capital serves society.

If we begin investing in the way we want the world to look, we move one step closer to transforming philanthropy from a passive store of wealth into an active force for regeneration.