DonorsTrust Has Another Record Year, What Will 2020 Bring?

DonorsTrust CEO Lawson Bader makes 2020 charitable giving predictions

ALEXANDRIA, Va.--()--In 2019, leading donor-advised fund (DAF) DonorsTrust completed a record-breaking year in terms of the new accounts opened, total amount of donations collected and number of grants made.

“The popularity of donor-advised funds reflects not only the charitable tendencies of our fellow citizens, but suggests a growing tendency for givers to be much more strategic about how they give, not just why,” said Lawson Bader, CEO of DonorsTrust.

The 2017 Tax Cuts and Jobs act nearly doubled the standard deduction and shifted the way people think about itemizing their taxes. As a result, DAFs have grown at a rapid pace as taxpayers begin to understand they can maximize their benefits by donating to charities through a DAF.

In 2019, DonorsTrust clients contributed $310 million to its donor-advised fund, an increase of 86% compared to the previous year. More importantly, DonorsTrust accountholders recommended $206 million in grants to 2,200 charities in nearly every U.S. state, an increase of 20% from 2018. These charitable organizations span across a wide range of interests and beliefs, including medical, arts, religion, education, public policy, student programs among many others.

“DonorsTrust has one of the highest payout rates of any U.S. donor-advised fund provider. This reflects a donor-base with a philanthropic strategy that invests in problem solving now, not in twenty years. We are pleased to offer the practicality and ease of a donor-advised fund with the understanding that our fund and its supporters does not sit idle, but engages with thousands of charities on an annual basis. This is what a donor-advised fund should be doing,” added Bader.

As the Nation enters a new decade of philanthropy, many are asking what will 2020 bring? Lawson Bader explains,

  1. “Major election years make some nonprofits nervous about the potential of declining contributions. They should not worry. There is not necessarily a zero-sum game between a ‘political’ and ‘nonpolitical’ gift. High-dollar donors giving via their private foundations or donor-advised funds see a difference between supporting charity and engaging politically. Charitable vehicles such as private foundations and donor-advised funds will continue to grow even while the amount of money spent on the 2020 election cycle will probably stagger most of us.
  2. On-line giving, both straightforward transactions (credit card and recurring charges) as well as social-community giving such as GoFundMe, will continue to grow as they reflect the technological bent of Gen Z and Millennials. Charities that focus on ‘relief’ or ‘social services’ may experience declining contributions from younger donors who prefer the more direct and personal approach to giving and who do not benefit from any charitable tax deduction.
  3. Donor privacy is becoming more politicized at both the state and federal level. If the Democratic candidate loses to Donald Trump, expect Congressional leaders to focus on donations to charitable groups deemed 'political.' More and more Republican governors and state legislatures are examining the activities of state-based think tanks and policy education groups, allies and perceived enemies alike. It is unfortunate that frustration with many voters about ‘money and politics’ has been diverted from discussions of political action committees, 501c4 advocacy organizations, and special interest groups and is now focused on the charitable behavior of citizens with a chilling effect.
  4. Major changes in tax laws have an effect in creating new institutions of giving. Enabling IRA distributions directly to charity avoids some of the changes made to standard and itemized deductions, much as the habit of ‘bunching’ now does. It will be interesting if the wealthier US citizens spend less energy creating private foundations for their giving, and instead focus on donor-advised funds or LLCs to avoid potential changes in income tax brackets depending on the election outcome. A concentrated campaign to vilify the wealthy may have a chilling effect on the charitable community.
  5. As donors become more strategic and sophisticated and focus not just on the bottom line of a charity’s activities, the outcomes that these charities are seeking may put pressure on them to consider M&A as means of emphasizing comparative advantages and justifying outcomes. Smaller nonprofits face the greater opportunity to merge than do larger national institutions.”

To learn more about DonorsTrust, visit www.donorstrust.org.

About DonorsTrust:

Established in 1999 as a 501(c)(3) public charity, DonorsTrust is a community of donors devoted to creating a better future. Our donors support charities they believe protect our Nation’s constitutional liberties and strengthen civil society through private institutions rather than with government programs. Our boutique size lets us offer our donors personal attention and advice that helps them achieve their philanthropic goals. We ensure that our donors’ intentions are protected and offer them a simple, effective and tax-advantaged way to give. Since inception, DonorsTrust has granted out over $1.3 billion to over 4,000 charities that protect our constitutional liberties and strengthen civil society without government funding.

To learn more about DonorsTrust, visit www.donorstrust.org.

Contacts

Hayley Advokat
Hayley.advokat@kglobal.com
202.579.1062

Contacts

Hayley Advokat
Hayley.advokat@kglobal.com
202.579.1062