Americans Donated Record $417B in 2013

Schwab and Fidelity DAFs report big increases in donations

American donors contributed $417 billion to charity last year, a 13% increase over 2012, the Atlas of Giving reported last week.

Several key factors combined to create a favorable atmosphere for philanthropy in 2013, Rob Mitchell, chief executive of the Atlas of Giving, said in a statement.

“Stock market growth fueled much of the giving but improving employment, growing real estate values, a lack of inflation, low interest rates and acceleration in GDP also helped to make 2013 an especially strong giving year,” Mitchell said.

“These conditions in the marketplace motivated many affluent donors to give — especially to universities and donor-advised funds. Giving appreciated stock or real estate is a great way to avoid paying capital gains tax, and many donors took advantage of the opportunity by making gifts involving such assets.”

Schwab Charitable and Fidelity Charitable, two of the country’s largest DAF sponsors, both reported increases in grants to nonprofit groups in 2013.

Fidelity made some 518,000 grants totaling $2.1 billion on behalf of its account holders, a 29% increase over 2012. Schwab donors’ grants amounting to $742 million benefited more than 41,000 charities last year, a 36% increase.

Both organizations said in statements that appreciated securities accounted for a larger percentage of contributions from donors in 2013. For Schwab, two-thirds of contributions were appreciated securities, a five-year high.

Fidelity said publicly traded and non-publicly traded appreciated assets made up 62% of all contributions, up from 54% in 2012.

When appreciated assets are transferred to DAF accounts, donors get an immediate tax deduction and do not pay capital gains tax on the sale of assets.

The Atlas of Giving statement contained these findings from its report:

• Human needs organizations and environmental causes experienced the highest rate of growth in giving last year, up 19.1% and 18.5%, respectively.

• The lingering effects of high unemployment continued to hurt churches and organizations that rely on a large number of small gifts from many donors.

• Publicity related to the Affordable Care Act appeared to depress giving to hospitals and health-related charities.

• Among wealthier donors, significant charitable assets moved away from family foundations and into DAFs where costs are lower and there are fewer management issues.

The report said the initial outlook for giving in 2014 was positive — up about 4%, according to Mitchell — but it did not expect giving to keep pace with 2013 levels, which jumped up significantly from the previous six years of data.

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