Fidelity Charitable on Wednesday issued a report that analyzes how its donor-advised fund account holders use DAFs to support their favorite charities.
Fidelity also noted that it had become the second-largest grant maker in the U.S., behind the Bill & Melinda Gates Foundation.
According to a survey conducted in February and March, 62% of 1,042 Fidelity Charitable donors said they used a DAF to sustain giving in retirement.
Twenty-seven percent said they used the vehicle to capitalize on a wealth event, and 24% said it was to do good after receiving a year-end bonus.
Donors also liked several features of DAFs that enabled them to increase their charitable impact.
Seventy-three percent of respondents said that with a DAF they could give more money to charity by leveraging tax benefits, such as those associated with giving long-term appreciated assets.
Seventy-six percent noted that their DAF enabled them to grow charitable dollars with tax-free investment options.
And 68% said their DAF gave them time to research the charitable causes and organizations they wanted to support.
Various Giving Methods
According to Fidelity, nearly all DAF donors also use other giving methods. For example, 91% of respondents said they gave directly, 9% gave through community foundations and 6% through private foundations.
Donors reported different reasons for using various giving methods. Most of those who engaged in planned giving activities, such as large donations and recurring gifts, preferred to use a DAF.
Others who engaged in casual donations — perhaps responding to requests from family or friends, or supporting an individual in need — gave directly with cash or cash equivalents.
The survey found that on average, donors reported using a DAF for about two-thirds of their household’s charitable giving.