If it wasn’t already clear that donor-advised funds are the go-to charitable giving vehicle of the decade, consider The Chronicle of Philanthropy’s ranking of the 400 charities that raised the most money from private resources in 2016.
Seven organizations at the top of the list are mainly built on DAFs, and account for about a quarter of total dollars donated to the 400 charities.
The Chronicle said that besides the bull market, a big factor in DAFs’ ascendance was a growing number of affluent people closing family foundations and putting the assets in these funds. Some donors are simply choosing to avoid the expense and red tape of foundations, it said.
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The report also acknowledged that for some folks in the nonprofit sphere, DAFs “represent an unwelcome change to charitable giving.”
Critics, The Chronicle said, consider the funds warehouses of philanthropic capital that could be more beneficial if given to charities sooner than later. Critics also cite DAF sponsors’ opaqueness about where money comes from and how it is paid out — a key attraction, it should be noted, for many account holders.
The 400 nonprofits in the new ranking raised a combined total of $108.7 billion from individuals, foundations and corporations last year. Organizations that appeared on both the 2015 and 2016 rankings experienced a 5% increase in contributions.
The Chronicle reported that many new donors were engaging in charitable giving for the first time. “They are policy-minded progressives shaken by the election of President Trump and showering money on organizations that aim to protect civil liberties, immigrants, women’s health and even information itself.”
The report said contributions began to increase last year to nonprofits focused on issues that candidate Trump appeared to threaten: to the American Civil Liberties Union, up 42%; to Planned Parenthood Federation of America, up 21%; and to the Environmental Defense Fund, up 11% — all on the Philanthropy 400 list.
In contrast, results were mixed for conservative-leaning organizations on the list: contributions to Focus on the Family, for instance, were up 7%, while those to the Heritage Foundation were down 11%.
The Chronicle reported that even as contributions to big nonprofits on the Philanthropy 400 list increased by 5% in 2016, those to charities overall rose at a much slower 2.7% (or 1.4%, adjusted for inflation), according to the Giving USA 2017 report.
In addition, giving remained highly concentrated, with contributions to the Philanthropy 400 accounting for 28% of all dollars given to charity in 2016, about the same as in recent years.
The top 10 nonprofits collectively raised 13% more in 2016 than the year before, $3 billion. These now account for 22% of all giving to the Philanthropy 400.
According to the report, donors are becoming more discerning about how they want to give, putting a burden on fundraisers to figure out how to structure complex gifts — and introduce those ideas to supporters.