John Glier, Grenzebach Glier and Associates CEO, and Suzanne Hilser-Wiles, Grenzebach Glier, and Associates President had a candid conversation on current philanthropic trends. Taking the most comprehensive, accurate, and up-to-date data in Philanthropy from Giving USA’s Annual Report, released June 21, 2022, John and Suzanne provided context around the data, shared insights, and offered key take aways in order to help you plan for the future.
For more information regarding Giving USA’s Annual Report and other insights visit: https://givingusa.org/
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1. Do we know how much of the shift from individuals to foundations involves DAFs?
One interesting point to observe about the numbers is that while, it may appear as though individual giving is shifting or declining. It’s not, it is growing. In the overall picture of all of charitable giving it is now taking a smaller share than other channels compared to past data. While we don’t currently have specific details on Donor Advised Funds and if there has been a shift in contribution from individuals to foundations, DAFs are one of largest growing philanthropic vehicles with contributions from both individuals and foundations increasing.
Giving by source, 1981-2021 (in billions of current dollars)
2. I haven’t had a chance to dig into the report yet, but what is GUSA saying about the rise of DAFs? This is a big conversation amongst organizations.
In the report itself, Giving USA has provided immense data around DAFs and their growth, providing some context however does not provide much speculation on the cause of the rise of DAF contributions. In general DAFs are beneficial to a donor as they provide tax benefits upon contributed to the fund while providing flexibility when contributions are made from the fund.
See a glimpse of the Giving USA data below.
“DAFs have grown rapidly over time. Over the past fourteen years, DAFs have grown dramatically across a number of metrics, including number of accounts, contributions to DAFs, assets held by DAFs, and grants made from DAFs. In 2006, there were 160,000 DAF accounts that held assets of $31.1 billion, according to a report from the U.S. Department of the Treasury. In addition, $9.0 billion was contributed to DAF accounts and DAF grants accounted for $5.7 billion in 2006. By comparison, in 2019 (the most recent year in which data was available), the National Philanthropic Trust’s 2020 Donor-Advised Fund Report reported that 873,228 DAF accounts held assets of $141.95 billion. Contributions to DAFs totaled $38.81 billion, and total grant dollars from DAFs reached a high of $27.37 billion. DAFs have grown by 330 percent or more for each one of these metrics in the past fourteen years. By comparison, total giving grew 52 percent over the same time period.
Total contributions to donor-advised funds in 2019 reached $38.81 billion according to the National Philanthropic Trust’s 2020 Donor-Advised Fund Report. Contributions to DAFs represented 8.7 percent of total giving from all sources in 2019, according to the most recent Giving USA.”
3. Are gifts from DAFs considered individual giving, or foundations? And, have there been more foundations established by wealthy families in recent years, leading to the increase in giving from foundations?
DAFs are comprised of a few types of fundholders – individuals, foundations, corporations, and workplace giving. Meaning, gifts contributed to DAFs could be considered as individual gifts, foundation gifts, corporate gifts, etc. DAFs are the vehicle through which a fund holder, whether that be an individual donor or a foundation, gives to charitable causes.
The DAF report doesn’t include information on recently established family foundations, but rather that foundations contributing to DAFs is on the rise, as with all other types of fundholders contributing to DAFs.