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.
Vanguard Findings
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.
