BY JANET LEVAUX
Groups Share Update on DAFs
RECENT RESEARCH CONDUCTED BY VANGUARD
Charitable, Fidelity Charitable and
Schwab Charitable finds that a growing
number of individuals are using donor-advised funds (DAFs) and are giving more
through these organizations—pointing
to an area for great engagement between
financial advisors and clients.
Fidelity Charitable manages about
$12-billion worth of donor-advised
funds. Its 104,000 donors have some
64,000 charitable accounts and made an
average of eight grants in 2013, up from
seven in 2012; the average value of the
grants topped $4,015, a year-over-year
jump of 6%. Plus, the number of gifts
that surpassed $1 million accounted
for nearly a quarter of the $2.1 billion
granted through the organization.
Fidelity Charitable, which was started
23 years ago, says most donations were
shared with philanthropic organizations as
grants over a 10-year period: Its research
finds that over 90% of contributions made
between 1996 and 2000 were distributed
as grants to charities by late 2010.
“Having a dedicated account for
charitable giving has helped many donors integrate philanthropy into their
total financial picture, fundamentally
changing their approach to charitable
giving,” said Amy Danforth, president
of Fidelity Charitable, in a statement.
The organization says there is growth
in both volume of grants and the amount
granted on an annual basis via donor-
advised finds. In fact, grant volume
tripled to nearly 519,000 in 2013 from
about 168,000 in 2004.
Most of the grant dollars go to educational organizations, 34%, followed
by religious groups, 16%. On average,
about 60% of grant dollars are shared
with non-profit organizations in the
recommending donor’s home state.
Research assembled by Vanguard Charitable says 61% of donors are strategic
about giving, while 73% of donors are
involved with the charities they support.
The organization says it grants 20.3%
of assets to charity annually, though giving levels vary based on the individual
strategies and goals of donors.
“Donors may prefer to give regularly in equal amounts to their favorite
charities, or perhaps they do not give
in one year, in order to recommend
a large grant for a major project in
the following year,” the organization
explained in its latest DAF report.
The compound annual growth rate
of dollars granted through Vanguard
Charitable is 22.1%. The rate for dollars granted from accounts with a baby
boomer and Gen X/millennial donor is
more than double that: 44.9%.
“More than 55% of donors say [they]
use a DAF for the majority of their giving, and 90% of donors are involved
in more than one type of philanthropy,
including donating financial assets,”
the Vanguard Charitable report noted.
The organization has supported some
142,400 charities in the past decade.
Schwab Charitable says that individuals gave $822 million to 34,500-plus
charities for the 12 months ended June
30, a nearly 40% jump from the prior
12-month period. The organization
has $6.4 billion in assets under management, and its clients have granted
45% of contributed into these accounts
to charities since the group’s inception.
“Our donors have absorbed the new
tax policies that took effect in 2013, and
they are encouraged by an improving
economy and a strong stock market.
As a result, they are increasing their
giving and supporting a wide range of
causes,” said Kim Laughton, president
of Schwab Charitable, in a statement.
“Their donor-advised accounts give
them a great way to unlock the value
of their investments to give to their
favorite charities, reduce their taxes
and manage their giving simply and
easily in one place,” Laughton added.
Schwab Charitable expanded the
investment options available to donors
by adding a new Income Index Pool in
August, bringing the total number of
investment pools to 14.
To date, Schwab Charitable has received over $9.8 billion in contributions
and has facilitated over $4.4 billion in
grants to charities on behalf of donors;
the number of Schwab Charitable accounts grew 17% in the 12 months
ending June 30.