This edition of the Donor-Advised Fund Report examined a total of 1,016 charities registered under Section 501(c)(3) of the Internal Revenue Code that sponsor and/or manage donor-advised funds. These include the following organizations:
- National Charities: organizations that are independent or are commercially-affiliated and national in reach; not focused on a particular region; do not have a specific religious and/or focus area. Examples include National Philanthropic Trust, Fidelity Charitable Gift Fund and Renaissance Charitable Foundation.
- Community Foundations: organizations that have a specific geographic or regional focus. Examples include Cleveland Foundation, Delaware Community Foundation and Community Foundation of the Ozarks.
- Single-Issue Charities: organizations that support a specific religious faith; focus on a particular issue area or cause; or fund a specific institution. Examples include Jewish Federation of Rhode Island, San Diego Human Dignity Foundation and Stanford University.
Primary Data Source
The primary source for each charitable sponsor’s assets, contributions, grants and total number of donor-advised funds is their IRS Form 990. The Form 990 is the annual information return that charities file with the Internal Revenue Service. For those organizations that filed returns for FY2009 and forward, this information is found in Schedule D.
For organizations that filed returns for FY2008, this may include information found on Schedule D.
For others, and those organizations that filed returns for FY2007 and FY2006, this data can be found on the following lines:
- Contributions: Line 1A
- Grants: Line 22A
- Accounts: Schedule A, Part III, Line 4D
- Assets: Schedule A, Part III, Line 4E
For FY2007-2010, the following served as secondary sources for the above data. This includes data the organization publicly disclosed and/or reported:
- The former donor-advised fund survey conducted by The Chronicle of Philanthropy
- The organization’s annual report
- The organization’s website
- The organization’s audited financial statements
Standard Fiscal Data by Filing Year
Since organizations have varied fiscal years, which may end March 31, June 30 or December 31, data was recorded in the fiscal year in which the charity filed the 990 Form with the IRS and posted on GuideStar. For example, whether an organization’s fiscal year ends on March 31, 2015 or December 31, 2015, the data will be recorded as 2015. This is consistent with GuideStar’s reporting process in date stamping all Form 990s for the organizations’ respective fiscal years.
Continuous Data Updates
Starting in the 2014 edition of the Donor-Advised Fund Report, National Philanthropic Trust compiled a larger file covering more donor-advised fund sponsors. In this edition, the data are again compiled from that larger file.
- For this 2016 edition, NPT reviewed 1,016 organizations. These include the largest programs in all major categories — 48 national programs, 608 Community Foundations (CFs) and 360 Single-Issue Charities.
- NPT maintains a time series of all key data points (charitable assets, grants, contributions and accounts) back to FY2007.
- For this edition, NPT used the most recent data from IRS Forms 990 to supplement the file and to reflect the few mergers and closures that have occurred. Values shown for prior years include all donor-advised fund sponsors that could be identified as operating in the year reported.
Payout from donor-advised funds is calculated to resemble how the Foundation Center estimates the grant payout rate for private foundations.
The Foundation Center published a report about how payout rate is determined using rules established in the tax code. The tax code allows private foundations to include as “qualified distributions” certain expenses associated with grantmaking and other payments made for charitable purposes (e.g., conferences, technical assistance for grantees and other expenses). Those expenses are too complex to track accurately for 75,000+ private foundations. In its work, the Foundation Center uses a simpler approach, which this report now replicates.10
In the “Foundation Center method,” the current year’s grants are divided by investable assets held at the end of the prior year. When using this method, the payout rates for donor-advised funds rise from prior levels reported in the Donor-Advised Fund Reports before 2015.
For a comparison of the impact of using the Foundation Center method, see Figure 13 in the 2015 Donor-Advised Fund Report.
A Note on Comparing Changes in Donor-Advised Funds with Changes in Private Foundations
Independent foundation grantmaking rose by about 10.9% in from 2014 to 2015,11 which is lower than the 16.9% increase in grants from donor-advised funds.
Even after NPT’s revision to use the “Foundation Center method” of payout calculations, comparing annual changes in donor- advised funds with changes at private foundations can be confusing because organizations use many different reporting years. Many donor-advised fund sponsors use a July-June fiscal year, and many private foundations use a calendar year or an April-March fiscal year. When a significant economic event occurs in the last six months of a calendar year, the impact of that event will appear in different reporting years for those using a fiscal year and those using a calendar year.
- Renz, L. 2012. Understanding and Benchmarking Foundation Payout Rates.
- Reported amounts from Giving USA 2015 and Giving USA 2016.