Close Close

Financial Planning > Charitable Giving

Fidelity, Vanguard Report Increases in 2016 Charitable Giving

Your article was successfully shared with the contacts you provided.

Fidelity Charitable granted a record $3.5 billion on behalf of its donors in 2016, a 15% increase over the previous year, and Vanguard Charitable supported charities with $686 million in grants, the organizations reported this week.

Fidelity Charitable, founded in 1991, and Vanguard Charitable, founded in 1997, are among the country’s top sponsors of donor-advised funds.

Schwab Charitable, another major DAF sponsor, recently reported its 2016 results. It facilitated some $1.5 billion in grants to charities in 2016.

Goal Surpassed

Last year, Fidelity celebrated its 25th anniversary, and to commemorate it challenged its account holders to bring recommended grants over that period to a cumulative $25 billion by the end of 2016. Donors met the challenge and surpassed the goal on Dec. 16, according to the report.

Over the course of the year, the sponsor granted more than 750,000 grants on behalf of its donors to some 110,000 nonprofit organizations.

Fidelity acknowledged in its report that there is “a story behind each and every grant,” and by way of illustration, spotlighted Dan and Jill Francis, an Ohio couple who had sold their family business.

Using a DAF, they started and funded early childhood learning initiatives in Ohio, then continued their charitable work in southeastern Michigan after retirement. There, they worked with Child Care Network, a local nonprofit that provides preschool scholarships for lower income families suffering from homelessness or other life crises. They pledged to recommend an annual grant of $100,000 to support the nonprofit’s expansion.

“We were both raised that you have an obligation to help people that don’t have your resources,” Dan Francis said. “Giving to a DAF really suited our style because we could put the money in and still be studying how and where we wanted to give. Because that was most important to us, to give in a way that would be effective and efficient.”

Donor Focus Shifts

Vanguard Charitable reported that it supported 30,000 charities in the U.S. and internationally last year, up 9% from 2015. These included 7,400 first-time grantee organizations, representing nearly a tenth of all grants for the year.

Vanguard’s account holders recommended 78,000 grants in 2016, a 13% increase over 2015. The average account granted $56,000 during the calendar year.

Some 60% of last year’s contributions came from noncash assets, such as highly appreciated assets that would otherwise be subject to capital gains taxes if sold.

Vanguard said its mission composition of top 10 grantee organizations shifted in 2016, reflecting a focus on civil rights, refugees and the environment. The top three nonprofit sectors receiving grants were human services, religion and education.

Of those, it said donors recommended more grants to human services and religious organizations, but fewer dollars. At the same time, they recommended fewer grants to educational organizations, but more dollars.

Vanguard said its donors also provided a modicum of stability for charities for ongoing operations, increasing unrestricted giving by 14% in 2016, thus giving nonprofits more flexibility in spending over a wider range of needs than restricted grants would allow.

And besides actively granting at year-end, donors recommended 16% of total 2016 grant dollars during June and July, traditionally a period when nonprofits’ funding is most vulnerable, Vanguard said.

— Check out New Study Predicts Charitable Giving Rise in 2017 and 2018 on ThinkAdvisor.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.