Donor-Advised Fund Charity Payouts Rise, Defy Tough Markets – Schwab Charitable

Editorial Staff

24 July 2023

People using donor-advised funds in the US gave more than $5 billion to charity in the financial year ending June 30, rising 8 per cent from a year earlier. Contributions covered more than one million grants, according to Schwab Charitable.

Schwab Charitable is a major US provider of donor-advised funds and other philanthropic resources.

The rise in contributions via DAFs and other structures happened in a period when stock markets had sunk in 2022 before recovering somewhat with the turn of the year. The aftermath of the pandemic, disasters such as the Turkey earthquake of February and the ongoing war in Ukraine have created some of the backdrop. Continued concerns about health and education, sharpened by the pandemic and lockdowns and the impact on mental and physical health, are also possible factors at work.

“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 last year,” Sam Kang, president of Schwab Charitable, said.

The figures appear to buck a trend. Schwab Charitable cited figures from Giving USA’s annual report on philanthropy, showing that total giving in the US declined in 2022 – only the fourth time in four decades that donations did not increase year over year. This decline is due in part to a sustained period of economic uncertainty and corresponding market volatility.

In the past, this publication has tracked the debate about the advantages and drawbacks of DAFs – which carry certain tax advantages –compared with private foundations.

To see a related editorial commentary about the role of the philanthropy advisor, see here.