Donor Advised Funds are the Fastest Growing Option in Charitable Giving

Donor Advised Funds are the Fastest Growing Option in Charitable Giving

Feb 11, 2021 The Philanthropy Roundtable

In a paper released today by The Philanthropy Roundtable and American Enterprise Institute, the author reveals how Donor Advised Funds (DAF) have become the fastest-growing vehicle for charitable giving in recent years.

“Appreciation in Donor-Advised Funds: An Analysis of Major Sponsors,” the paper written by Howard Husock, adjunct fellow at the American Enterprise Institute and a senior executive fellow at Philanthropy Roundtable, showcases how charitable giving is not just alive and well in the United States, but that DAFs are rapidly becoming a vehicle of choice for charitable giving at all levels.

In addition to more DAF accounts being created the past several years and an increase in distribution of grants from them, DAFs may currently hold more than $5 billion in appreciated assets which, by law, are reserved for only one purpose: future charitable giving.

"$5 billion in future charitable funding is great news for all those doing the hard work to improve our country as well as those who have a desire to give,” said author Howard Husock. “Donor Advised Funds have opened the doors for more free and fruitful charitable giving."

Compared to the Bill & Melinda Gates Foundation ($36 billion), the Ford Foundation ($12 billion), and the MacArthur Foundation ($7 billion), DAF accounts average $166,000. Arguably, DAFs help democratize philanthropy, making it more accessible to a wider reach of donors.

DAFs are, in effect, small, personal foundations for middle-class donors. While the number of DAF accounts has steadily risen in the past few years, reaching more than 720,000, the average asset total in DAF accounts has fallen, indicating their growing accessibility. Even as DAF contributions have increased, so, too, have grants to all other major categories of charitable organizations, including human services, health, education, and religion.

To read Appreciation in Donor-Advised Funds: An Analysis of Major Sponsors, click here.