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Financial Planning > Charitable Giving > Donor Advised Funds

$5B in Giving Shows Rapid Rise of Donor-Advised Funds: Schwab Charitable

By John Manganaro

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Individuals and families working with Schwab Charitable granted more than $5 billion to philanthropic causes in fiscal year 2023, which ended June 30, representing an 8% increase from the prior fiscal year and underscoring the impressive growth of donor-advised funds.

According to a news release issued by the firm, giving from Schwab Charitable donor-advised funds has reached historic levels, despite turbulent markets and concerns about inflation and the global economy.

Donors surpassed 1 million individual grants for the first time in the organization’s history, according to the release, with the proceeds going to more than 120,000 unique charities throughout the year.

The total dollar amount granted to charities rose by 8%, or nearly $350 million, compared to the prior fiscal year.

Sam Kang, president of Schwab Charitable, calls this level of giving “truly inspiring,” noting that donor-advised funds have proven to be a resilient tool for donors, who were able to increase their support of nonprofit organizations despite economic volatility in the past year.

As ThinkAdvisor has previously reported, Giving USA’s annual report on philanthropy shows total giving in the United States modestly declined in 2022, only the fourth time in four decades that donations did not increase on an annual basis.

Specifically, giving fell 3.4% from 2021, but it was actually down 10.5% when adjusted for inflation. Experts say this decline makes sense and was to be expected because there was a 20% to 25% decline in the stock market during the year, with a still impressive $500 billion in charitable contributions.

Hidden in the data is the broader resilience of giving coming from donor-advised funds, says Fred Kaynor, managing director of relationship management, marketing and strategic partnerships at Schwab Charitable.

“One of the many benefits of the donor-advised fund is that donors can contribute to their account during more financially stable times and invest those assets for potential growth while they’re in the account, thus having readily deployable funds to grant each year regardless of the broader environment,” Kaynor explains.

This dynamic has allowed Schwab Charitable’s donors to step up in times of greater need throughout the most recent fiscal year, Kaynor adds, maximizing their support of the causes that are most important to them, as well as communities in need in their own backyard and internationally.

According to the release, during the fiscal year, 81% of donors granted to charities they previously supported, and 68% of donors granted to new charities they had not previously supported.

Credit: Adobe Stock

John Manganaro

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