JENKINTOWN, Pa.--(BUSINESS WIRE)--The 2018 Donor-Advised Fund Report, the most comprehensive data on donor-advised funds (DAFs) in the U.S., reveals grants from DAFs to qualified charities grew 19.9 percent to a record $19.08 billion, increasing the payout rate to 22.1 percent. DAFs remain the fastest growing giving vehicle in the U.S., with the number of accounts surging 60.2 percent to 463,622.
The 12th annual Donor-Advised Fund Report finds growth in every key philanthropic benchmark with DAFs representing 10.2 percent of all individual giving in the U.S. Total assets available for grantmaking increased 27.3 percent year-over-year to $110.01 billion. Contributions to DAF accounts, every dollar destined for charities, grew 16.5 percent to $29.23 billion. National Philanthropic Trust (NPT), the largest national independent donor-advised fund sponsor in the US, publishes the Donor-Advised Fund Report annually.
“Growth in donor-advised funds reflects the charitable instinct Americans, who are among the most generous donors in the world,” said Eileen Heisman, President and CEO of National Philanthropic Trust. “Tax reform drove many to ‘pre-fund’ their philanthropy in 2017 when the value of their tax deduction could be higher. A booming stock market and a tense political climate spurred generosity and helped donors support the values and causes they embrace.”
Key Report Findings
National Philanthropic Trust’s 12th annual Donor-Advised Fund Report identified growth in all key metrics for the eighth consecutive year.
↑ Assets destined for charitable grantmaking in all DAF accounts totaled $110.01 billion, a 27.3 percent increase compared to $86.45 billion in 2016. DAF assets surpassed the $100 billion mark for the first time and continued growth momentum since 2010.
↑ Grants from DAF accounts to qualified charities totaled $19.08 billion in 2017, a 19.9 percent increase compared to $15.91 billion in 2016.
↑ Grant payout rate to qualified charities was 22.1 percent compared to 20.6 percent in 2016. Donor-advised funds continue to have a payout rate nearly four times higher than that of private foundations.
↑ Contributions to DAFs totaled $29.23 billion, a 16.5 percent increase compared to $25.09 billion in 2016.
↑ DAF accounts in the U.S. totaled 463,622, 60.2 percent increase compared to 298,628 in 2016.
↓ Size of DAF accounts averaged $237,356, a 20.5 percent decrease compared to $298,628 in 2016. Historic growth in number of DAF accounts resulted in this decrease.
“Growth in grants from DAFs to charities—large and small—have outpaced contributions for four out of the last five years,” said Heisman. “The 2016 to 2017 period saw the fastest rate of growth in DAF grantmaking in several years. We predict that grants from DAFs to charities will exceed $20 billion in 2018.”
Heisman continued, “We believe that DAF donors give more and are fully committed to philanthropy. To attract DAF dollars, charities should communicate their mission to prospective donors with impactful stories and innovative fundraising tactics.”
For the first time, the Donor-Advised Fund Report includes a brief analysis of the types of assets contributed to donor-advised funds. The limited data set we compiled represents 61.5 percent of the total contributions in 2017. Of those contributions, approximately 60 percent were non-cash assets.
“The vast majority of non-cash asset contributions are publicly-traded securities, but we also see donors turning their business interests, real estate, fine art and jewelry into charitable capital,” said Heisman. “We saw an increase in these illiquid asset contributions six years ago. DAFs make it easier for donors to turn these assets into charitable grants for the organizations that mean most to them. We anticipate contributions of illiquid assets will continue to increase in the coming years.”
First established nearly 100 years ago, DAFs have evolved into an important giving vehicle for donors and steady funding source for charities. The Next Generation is adopting them because of their flexibility and simplicity.
“We are in the midst of a transformative era in the history of philanthropy,” said Heisman. “The surge in number of individual DAFs reflects donors’ interest in being active and strategic with their philanthropy. Many DAFs offer the opportunity to align their charitable capital with their financial goals and personal values. For example, donors are starting to choose impact investments for their DAF contributions to double the impact of their philanthropy.”
Continued Heisman, “We are seeing emerging, innovative models that capitalize on the efficiency and flexibility of DAFs, including crowdfunding and workplace giving. This evolution of giving means new opportunity for donors and charities alike.”
National Philanthropic Trust’s Donor-Advised Fund Report has been published annually as a public service since 2006. It primarily uses data from IRS Form 990 filings to provide the most up-to-date and reliable analysis of the DAF market. The 2018 report examined 1,002 charitable organizations that sponsor donor-advised funds, including national charities, community foundations and other sponsoring charities. A glossary of terms can be found here.
About National Philanthropic Trust
NPT is the largest national independent donor-advised fund sponsor and has raised $11.3 billion in charitable contributions. NPT currently manages $6.7 billion in charitable assets and has made more than 230,000 grants exceeding $5.6 billion to charities around the world. NPT ranks among the largest grantmaking institutions in the US. NPT published HistoryofGiving.org, the most comprehensive narrative about the past 500 years of philanthropy, including rarely accessed images, videos and documents. More at NPTrust.org.