Donor-advised funds (DAFs) have emerged as a popular philanthropic tool, providing donors with flexibility, ease of use, and accessibility in their charitable giving. Prior research on DAF trends tend to find average payout rates above 20 percent, while median payout rates are typically around 13 percent (Heist and Vance-McMullen, 2019). For example, the 2022 National Philanthropic Trust annual report on DAFs found the average DAF payout rate to be 27.3 percent in 2021, with a total of almost $46 billion being granted to charities that year.
In California, the use of DAFs has garnered attention due to limited available data on the subject. However, a new analysis of data from twenty-two of the largest community foundations in the state sheds light on the widespread adoption and diverse practices of DAF usage. This report analyzes the findings of this analysis to provide valuable insights into the landscape of community foundation use of DAFs in California.
Using the latest available data (fiscal years 2021 and 2022) on 990 filings, we examined twenty-two large community foundations in California, which collectively represent over 90 percent of all community foundation assets in the state. Among these foundations, the number of DAF accounts exceeded 6,600, with $16.7 billion of assets. This substantial figure indicates DAFs have become a popular and significant mechanism for charitable giving and fund management among private foundations in California.