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Donors Set Records at Schwab, Fidelity Charitable

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Charitable granting at Schwab Charitable and Fidelity Charitable continues to set records, according to new reports from the two providers of donor-advised funds.

Schwab Charitable said it had facilitated $2.4 billion in grants to some 83,000 charities during fiscal year 2019, ended June 30, a 33% increase in dollars granted and a 26% increase in the number of grants.

For the year through July 19, Fidelity Charitable reported that its donors have recommended $4 billion in grants, a 48% increase over the same period last year.

Schwab Charitable: 20th Anniversary 

“Over an incredible 20-year span of growing generosity, our donors have recommended a total of more than $12.5 billion in grants to 150,000 charities,” Schwab Charitable’s president, Kim Laughton, said in a statement.

“Thanks to strong market performance over the majority of the last 12 months and a growing familiarity with the relatively new tax law, donors found the 2019 fiscal year to be an especially good time to give.”

In fiscal 2019, two-thirds of contributions to Schwab Charitable were noncash assets, including publicly traded securities, restricted stock, real estate and privately held business interests, which were the most popular, according to the report.

And more than a year after the tax overhaul, some donors realized that they could benefit from “bunching” or concentrating their charitable contributions, including contributions of appreciated noncash assets.

Individuals who do this contribute to their DAFs in higher income years and then recommend grants to charities of their choice over time. This enables them to itemize charitable deductions in some years and benefit from the increased standard deduction in other years.

Schwab Charitable donors span all generations. In fiscal 2019, older generations generally gave more with greater frequency, according to the report:

  • Greatest Generation (born before 1946): recommended an average of 12 grants, each averaging $12,000, to eight charities
  • Boomers: average of 10 grants, average value of $5,000, to seven charities
  • Gen X: average of seven grants, average value of $7,000, to five charities
  • Millennials: average of six grants, average value of $4,000, to three charities

Schwab Charitable reported that 72% of DAF account assets were associated with a professional investment advisor. In fiscal 2019, donors with advised accounts recommended an average of 11 grants to charities.

Financial advisors are well-suited to help donors give with greater impact, according to the report. They can help identify appreciated assets that would make tax-efficient charitable gifts. And they can offer personalized giving strategies that may maximize tax efficiency under the new law.

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According to the latest RIA Benchmarking Study from Charles Schwab, 79% of advisory firms include charitable planning in their primary service offering, well up from 67% of firms five years ago.

“Advisors tell us that they promote charitable planning and advice as a way to start conversations that lead to referrals and deeper and broader relationships with key clients,”  Fred Kaynor, vice president of business development and marketing at Schwab Charitable, said in the statement.

Fidelity Charitable: Breaking Records

Fidelity Charitable DAF accountholders’ grantmaking in 2019 — 668,000 grants year to date, supporting 105,000 charities — follows a record $5.2 billion in grants in 2018, $700 million more than the previous year.

Since its inception in 1991, Fidelity Charitable has made more than $35 billion in donor-recommended grants to more than 278,000 charities, the firm noted in a statement.

“The strong rate of grant activity from donors who use a Giving Account underscores how DAFs have become a growing source of reliable nonprofit support during periods of uncertainty or market volatility, such as the dramatic market drop we saw at the end of last year,” Fidelity Charitable president Pamela Norley said in the statement.

Fidelity Charitable reported that it continues to innovate in order to enable donors to contribute assets that might otherwise be difficult to donate. Since inception, Fidelity Charitable’s complex asset program has generated $6 billion in funds available for charitable grantmaking.

Last year, contributions of non-publicly traded assets set a new record, with more than $1 billion in complex assets — such as private stock, limited partnership interests, real estate and cryptocurrency — converted to funds available for grantmaking.

Since 2015, Fidelity Charitable donors have contributed some $106 million in cryptocurrencies. The firm recently added Ripple to its existing array of assets that donors can contribute into their DAFs to fuel their philanthropy.

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