Fidelity Charitable Sees Record Grants and Contributions in 2012

Last year’s improved stock market and economic conditions—and an uncertain tax environment—made donors feel more charitable

Incoming contributions rose for the fourth year in a row while outgoing grants rose for the third straight year, making 2012 a record year for both measures of donor activity, Fidelity Charitable reported Tuesday, citing last year’s improved stock market, economic conditions and uncertain tax climate.

In 2012, donors recommended more than 428,000 grants totaling $1.6 billion, up 13% from a year ago, and contributed $3.6 billion for charitable accounts. Boston-based Fidelity Charitable is an independent public charity that has helped donors support more than 160,000 nonprofit organizations with more than $14 billion in grants since 1991. Both dollar figures represent a 24% increase compared to 2011. The number of new charitable accounts rose 32% compared to 2011.

Advisors’ donor relationships continued to influence the majority of contributions. Such referrals accounted for more than 70% of contributions in 2012.

Complex assets, such as private business interests and other non-publicly traded assets, played an increasingly important role in donors’ contributions, according to Fidelity Charitable. Contributions of complex assets more than tripled compared with 2011 and accounted for 11% of contributions. Appreciated securities once again accounted for the majority of contributions, at 54%.

“Committed donors are becoming more resourceful in how they fund their giving, and the charitable causes they support benefit,” said Sarah Libbey, president of Fidelity Charitable, in a statement. “By leveraging their most appreciated assets and the tax advantages associated with donating them to charity, donors can often give more.”

In the fourth quarter, which tends to be the strongest quarter for grants and contributions, donors recommended more than 172,000 grants totaling $657 million. Contributions totaled $2.4 billion in Q4, or 66% of the annual total, slightly above the 60% that the final quarter of the year typically sees.

Last October, Fidelity in its Charitable Giving Season Survey predicted that four out of five Americans would donate the same or more in 2012 than they had in 2011. The results showed that Americans on average expected to give $2,400 to charity compared with $2,100 in the prior year.

Religion, human services and education ranked as the top three sectors, with donors recommending grants to charities in all 50 states. The average grant size rose to $3,773 in 2012, a 10% increase compared with 2011.

“Throughout 2012, donors took advantage of the improved stock market and economic conditions to contribute more to their charitable accounts and in turn better support the causes they care about,” Libbey said. “We also saw many donors discover the benefits of using a donor-advised fund for the first time as the uncertain tax environment prompted more discussions about philanthropy between advisors and clients.”

Read Fidelity Charitable Offers 4 Strategies for Giving in Fluid Tax Environment at AdvisorOne.

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