Projections and Observations
Comparison of Projections and Results for 2014
In last year’s Donor-Advised Fund Report, we predicted that the major growth in contributions to donor-advised funds in 2012 and 2013 would result in greater grantmaking. This prediction proved to be correct. The growth rate in grantmaking from donor-advised funds between 2013 and 2014 was almost 30 percent—nearly double the increase from 2012 to 2013 (15.0 percent) and triple the increase from 2011 to 2012 (5.0 percent).
As part of our grantmaking prediction, we noted that grants from donor-advised fund accounts at National Charities would rise significantly. They rose by a substantial 28.0 percent between 2013 and 2014. However, Community Foundations had the highest one-year increase in grantmaking, totaling 40.6 percent. Grants from donor-advised fund accounts at Single-Issue Charities increased at a slower rate of 9.2 percent.
In our last report, we predicted contributions to donor-advised fund accounts would continue a steady rise following two years of extreme growth due to the 2012 Fiscal Cliff. This prediction also proved correct as contributions increased 14 percent.
In this metric, growth at Community Foundations outpaced the other types of charities that offer donor-advised funds. In this report, the one-year growth rate in contributions to donor-advised funds at Community Foundations was 30.8 percent, while National Charities and Single-Issue Charities experienced 8.0 and 5.6 percent growth, respectively.
What Lies Ahead?
The number of donor-advised fund accounts has grown each year since we began collecting data for the Donor-Advised Fund Report. Increased contributions to donor-advised funds and soaring grantmaking from them demonstrates that an increasing number of philanthropists actively engage their donor-advised funds. We project continued growth in all metrics, particularly in grantmaking as charitable assets continue to rise.
While this report can not collect data on the types of contributions to donor-advised fund accounts, we anticipate that donors will continue to fund their donor-advised fund account with illiquid gifts. Donors are utilizing assets beyond their brokerage accounts as gifts to charity—assets such as real estate, collections and limited partnerships. This trend is related to economic growth, where mergers and acquisitions, taking companies public and extended real estate recovery are creating new wealth. We anticipate that this will play a role in increasing contributions to all donor-advised fund charities in the coming years.
These projections are based on NPT’s experience and anecdotal evidence over the past year in addition to observed economic and political conditions.
All types of charities that offer donor-advised funds reported growth in grantmaking, contributions and charitable assets in 2014. Aggregate payout rates have been above 20 percent since we first started collecting data in 2007. This suggests that donors who use this type of charitable giving vehicle intend to support philanthropic organizations and the public good, regardless of the economic climate.