Bank of America and Zelle Team Up to Use Instant Payments to Fund Nonprofits

Zelle introduced an application that permits charitable disbursements from donor advised funds (DAFs), according to a Thursday (March 12) press release emailed to PYMNTS.

The new offering, announced in partnership with Bank of America, lets nonprofits receive charitable grant funding in near real time, replacing what is normally a multiweek and paper-based process, per the release.

“This new capability is part of Zelle Forward, the network’s innovation agenda,” the release said. “Zelle is working with financial institutions to explore ways to expand into new, practical use cases. Americans now send more than $1.2 trillion annually using Zelle and increasingly rely on it for everyday needs like rent and childcare.”

The DAF proof of concept is being introduced via Bank of America’s Charitable Gift Fund, the bank’s donor advised fund, which lets donors send charitable grants to a select group of nonprofit organizations via Zelle, according to the release.

Although the offering is starting with Bank of America’s Charitable Gift Fund, the aim is to support wider use by financial institutions that offer Zelle and have DAF programs, per the release.

“Through Zelle Forward, we are advancing practical new applications of the Zelle network, and this charitable grant delivery capability represents the first of many ways Zelle will continue to innovate and grow,” Denise Leonhard, general manager of Zelle, said in the release. “By bringing the speed and reliability of Zelle to charitable grant delivery, we are helping funds reach nonprofits faster so organizations can stay focused on their missions.”

Meanwhile, real-time payments have reached a turning point in North America.

“Instant payment systems across the United States, Canada and Mexico are scaling, modernizing and broadening their reach,” PYMNTS reported Monday (March 9).

Although each region is taking a different approach to their system, put together, these arcs show that real-time payments are becoming a foundational financial infrastructure.

The PYMNTS Intelligence report “Fee Sensitivity and the Opt-In Economics of Instant Payouts” found that 74% of U.S. consumers said they have received at least one payout instantly, an indication that instant delivery has achieved mainstream scale.