The data underscores how DAFs are an increasingly visible part of the US philanthropy landscape.

Grant making by Vanguard Charitable's donor clients rose by 14 per cent in the first half of 2022 from a year before. A driving force behind this rise has been the need for humanitarian aid in Ukraine.

Vanguard Charitable, which operates donor-advised funds (DAFs), a common structure for philanthropy in the US, said that granting reached a record of $952 million in H1 2022. Donors distributed 83,838 grants with an average grant amount of $11,354, a 7 per cent and 6 per cent increase, respectively, compared with the first half of 2021. 

To date, Vanguard Charitable says it has granted over $14 billion to non-profits since its inception in 1997. 

Overall, the top non-profits supported were Doctors Without Borders, World Central Kitchen, International Rescue Committee, Direct Relief, and UNICEF.

The data underscores how DAFs are an increasingly visible part of the US philanthropy landscape. (They’re also growing as a channel in the UK.) Besides Vanguard Charitable, other prominent providers of DAFs include Schwab Charitable and Fidelity Charitable. (See here for an article several years ago by Susan Winer, COO of Strategic Philanthropy in the US.)

Philanthropy appears to remain on an upward curve. Last week, BNY Mellon Wealth Management released its 2022 Annual Charitable Gift Report. It found that charitable giving started to rebound in 2021 after declining in 2020, with the number of gifts increasing by 10 per cent. The total dollar amount of gifts increased by 27 per cent, and the average gift size climbed by 15 per cent.

Holders of DAFs receive a deduction from US income tax, as well as an exemption from capital gains tax on gifts of appreciated assets. DAFs are also exempt from estate taxes. DAFs have sometimes drawn criticism, because they don’t give financial incentives to donate money quickly, much of it ends up sitting indefinitely in accounts rather than being distributed. On aggregate, the foundation which holds the DAF must disburse at least 3.5 per cent of the average balance over the previous two years, but there is no annual disbursement quota for individual fund holders (source: The Charity Report). 

“We are inspired by our extremely generous donors,” Rebecca Moffett, president of Vanguard Charitable, said. “Giving must continue during times of economic uncertainty to support those most in need, but maintaining a giving strategy is not always easy to do during these times.”

Disaster relief giving
Russia’s invasion of Ukraine, and the humanitarian disaster this caused, has driven some of the donations over the past six months.

Vanguard Charitable donors, leveraging the fast and responsive nature of DAFs, have granted nearly $60 million to Ukraine relief non-profits in the first half of 2022.

Including Ukraine relief, other causes supported by donors were:

-- Human services: Nearly 26,000 grants, totaling 31 per cent of overall giving and a 24 per cent increase over the same time last year; 
-- Religion: More than 20,000 grants, totaling 25 per cent of overall giving; 
-- Education: More than 12,000 grants, totaling 15 per cent of overall giving; and 
-- Health: More than 9,000 grants, totaling 11 per cent of overall giving.

"Every day, Doctors Without Borders/Médecins Sans Frontières (MSF) delivers medical and humanitarian aid to people in more than 70 countries. We provide medical care where it is needed most, both through longstanding programs and emergency response activities,” Kim Goldsmith-N’Diaye, director of Development at MSF-USA, said.

Through Vanguard Charitable’s 2022 financial year, from July 1, 2021, to June 30, 2022, donors gave a record total of $1.9 billion to non-profits. Giving patterns followed a similar trajectory as the first half of calendar year 2022, with top granting areas including human services, religion, education, and health.

Of note, donors continue to support solutions to the perennial challenge of hunger and homelessness domestically, which has only been exacerbated by current economic pressures including inflation and the housing crisis.