In 2012, Donor-Advised Funds Grew Despite Slow Economy

From 2011 to 2012, the U.S. economy grew 2.8 percent, after adjusting for inflation. This is a markedly lower rate of growth than the 60-year average annual inflation-adjusted growth rate of 3.4 percent from 1948 to 2007, but is a positive movement from the extremely low rate of 1.8 percent recorded for 2011.4

In 2012, the official unemployment rate was 8.1 percent—down slightly from the reported 8.9 percent rate in 2011. By comparison, the 2007 pre-recession employment rate was 4.6 percent.5

The Dow Jones Industrial Average rose by more than 3 percent in 2012, after adjusting for inflation, reaching 13,104. This number is still below the pre-recession level of 14,100 in 2007.6

Donor-advised funds saw striking growth in almost every metric, including assets under management, total contributions, and total grant dollars (Table 1). These increases mark a second year of robust growth after declines experienced in 2009. One possible reason for continued growth in 2012 was donor concern about proposed tax law changes that would reduce the value of the charitable deduction in 2013 and beyond.

This debate along with other tax and spending policy issues created the “Fiscal Cliff” at the year’s end.7 Some donors may have elected to “advance” more than a year of giving in order for their contributions to qualify for the known deductions, rather than risk the unknown.

Of particular note:

  • Assets in donor-advised fund accounts grew by $7.21 billion in 2012; total assets under management in all donor-advised funds accounts were an estimated $45.35 billion. This is an increase of 18.9 percent from a revised total of $38.14 billion8 and continues the steep growth trajectory begun in 2011.
  • Contributions increased to $13.71 billion, or an increase of 34.6 percent compared with 2011 contributions, which are revised to $10.19 billion based on the new fund sponsors tracked.
  • Grantmaking is estimated at $8.62 billion, representing an increase of 6.7 percent compared with 2011, which is revised to $8.08 billion with the data about additional donor-advised fund sponsors.
Table 1: Donor-Advised Fund Metrics Overview*
  2011 2012 % Change
Assets Under Management $ 38.14 Billion $ 45.35 Billion 18.9%
Total Contributions $ 10.19 Billion $ 13.71 Billion 34.6%
Total Grant Dollars $ 8.08 Billion $ 8.62 Billion 6.7%
Payout** 17.5% 16.0% -9.1%
Total # of DAF Accounts 188,487 201,631 7.0%
Average Size of DAF*** Account $ 202,341 $ 224,921 11.2%

* Values reflect 1,007 fund sponsors, including 355 not previously tracked in the Donor-Advised Fund Report.

** Payout = Grant Dollars divided by (Assets Under Management at Year-End + Grant Dollars) x 100 to get a percentage.

*** Donor Advised Fund. This average is the Total Assets Under Management divided by the Total Number of DAF Accounts.

  1. All growth percentages calculated using “GDP in billions of chained 2009 dollars” in the table for national Gross Domestic Product values released September 26, 2013 by the Bureau of Economic Analysis, www.bea.gov.
  2. Bureau of Labor Statistics (BLS) average unemployment rate, civilian labor force 16 years and over (percent), not seasonally adjusted, www.bls.gov/cps/prev_yrs.htm. Accessed September 20, 2013.
  3. Figures taken from Dow Jones Averages, www.djaverages.com, accessed September 29, 2013.
  4. The term “Fiscal Cliff” is used in this report to describe the planned government spending cuts and tax increases that were scheduled to go into effect beginning January 1, 2013. It was widely speculated that if these policies were to go into effect, it would have an immediate, negative impact on the U.S. economy. Congress debated these policy issues in late 2012.
  5. Last year’s report, based on fewer fund sponsors, estimated total assets of $37.43 billion for 2011. This year, based on more sponsors, the estimate for 2011 is $38.09 billion.