Growth in Recent Years
Donor-advised funds grew significantly in 2013. Total charitable assets available for grantmaking reached an all-time high from a combination of an increase in annual contributions and probable gains from investment yields. Grants from donor-advised fund accounts rose, as did the number of individual donor-advised fund accounts.*
Number of Accounts Saw Healthy Increase
The number of donor-advised fund accounts increased by 5.7 percent in 2013, to 217,367. (Table 1 and Figure 1) This sustains the annual growth rate of 4 percent or better reported since 2011. The number of accounts at Single-Issue Charities held steady with an increase of just 1.1 percent; Community Foundations increased by 3.1 percent; and National Charities saw the largest increase, with 9.1 percent more donor-advised fund accounts over the previous year.
Grant Total Nears $10 billion
Grants from donor-advised fund accounts to charitable organizations reached a new high at $9.66 billon. (Table 1 and Figure 2) The growth rate compared to a revised total for 2012 grants of $8.58 billion is a 12.6 percent increase. The rate of growth between 2012 and 2013 is almost double the 6.7 percent increase between 2011 and 2012.
Contributions At All-Time High
Contributions to donor-advised fund accounts in 2013 totaled $17.28 billion, also an all-time high. This number surpasses the revised 2012 value of $13.99 billion by $3.2 billion (Table 1 and Figure 3), an increase of 23.5 percent. Even in reaching a new high, however, contributions rose at a slower rate in 2013 than they had in 2012, when the amount contributed to donor-advised funds increased by 33.5 percent. In 2007, contributions to donor-advised fund accounts were approximately 3 percent of total giving in the United States. For 2013, contributions of $17.28 billion equate to more than 5 percent of total giving.
Charitable Assets Grew 19.8%, Exceed $53 billion
Charitable assets under management in all donor-advised fund accounts totaled $53.74 billion in 2013, an all-time high (Table 1 and Figure 4) The increase in total charitable assets can logically be attributed to the growth in the number of funds (a 5.7 percent increase) and contributions (a 23.5 percent increase). While the data collected do not provide investment return information, the stock market experienced a 25 percent increase in value. It is likely that investable charitable assets generated solid gains at all donor-advised fund charitable sponsors.
Grant Payout Rate Exceeds 20% Again
Grant Payout rates from 2007 through 2013 annually exceed 20 percent using a revised calculation method that closely follows the approach used by the Foundation Center for approximating payout rates for private foundations. 8 For 2013 the payout rate was 21.5 percent, down from its high of 24.7 percent in 2010. This decrease reflects the recent growth of charitable assets in donor-advised fund accounts relative to a more modest rise in grants paid out from donor-advised fund accounts.
In contrast to the 20-plus percent grant payout rates from donor-advised fund accounts, the payout rates at a typical private foundation hover around 5 percent, which include operational costs. While federal law requires a minimum foundation payout of 5 percent, some foundations have granting policies to ensure a higher payout rate. Donor-advised fund payout rates do not include overhead.
Average Account Size Rises
The 2013 average donor-advised fund account size reached $247,217, which is also an all-time high (Table 1 and Figure 6) The growth in average account size follows a 23.5 percent increase in contributions and a 5.7 percent increase in the number of donor-advised fund accounts for the same year.
- See Methodology