Growth in Recent Years
Donor-advised funds grew significantly in 2014. Grants from donor-advised fund accounts rose sharply and the number of individual donor-advised fund accounts increased as well. Total charitable assets available for grantmaking reached an all-time high. This rise is a result of both an increase in contributions to donor-advised fund accounts and gains from investment returns.
Grants Grew Almost 30% to Exceed $12 billion
Grants from donor-advised fund accounts to charitable organizations reached a new high at $12.49 billon (Table 1 and Figure 1). This is a 27.0 percent growth rate compared to a revised total for 2013 grants of $9.83 billion. The rate of growth between 2014 and 2013 is almost double the 15.1 percent increase between 2012 and 2013. From 2011 to 2012, grants increased by 5.0 percent.
Contributions at All-Time High
Contributions to donor-advised fund accounts in 2014 totaled $19.66 billion, also an all-time high. This number surpasses the revised 2013 value of $17.23 billion by $2.4 billion (Table 1 and Figure 2), an increase of 14.1 percent. Even in reaching a new high, however, contributions rose at a slower rate than the previous year, which was a 23 percent increase.
Charitable Assets Passed $70 billion
Charitable assets under management in all donor-advised fund accounts totaled $70.70 billion in 2014, an all-time high (Table 1 and Figure 3). The increase in total charitable assets can logically be attributed to the growth in the number of funds (an 8.8 percent increase) and contributions (a 14.1 percent increase). While the data collected do not provide investment return information, the stock market experienced a 25 percent increase in value in 2013 and another 7.5 percent hike in 2014. It is likely that investable charitable assets generated gains at all donor-advised fund charities.
Number of Accounts Saw Steady Increase
The number of donor-advised fund accounts increased by 8.8 percent in 2014, to 238,293 (Table 1 and Figure 4). This figure sustains the annual growth rate of 4 percent or better reported since 2010. The number of accounts at Single-Issue Charities held relatively steady, showing 3.4 percent growth to 44,540; Community Foundations increased by 4.7 percent; and National Charities saw the largest increase, with 13.1 percent more donor-advised fund accounts over the previous year.
Grant Payout Exceeded 20% Again
Grant payout rates from donor-advised fund accounts annually exceeded 20 percent for the eighth consecutive year. For 2014, the payout rate was 21.9 percent exactly even with the previous year (Table 1 and Figure 5).
In contrast to the 20-plus percent grant payout rates from donor-advised fund accounts, the payout rates at a typical private foundation is usually around 5 percent, which include operational costs. Federal law requires a minimum foundation payout of 5 percent and some foundations have granting policies to ensure a higher payout rate. Donor-advised fund grants and corresponding payout rates do not include any of the sponsoring charity’s overhead.
Average Account Size Rose
The 2014 average donor-advised fund account size reached $296,701, which is also an all-time high (Table 1 and Figure 6). The 13.7 growth in average account size follows a 14.1 percent increase in contributions and an 8.8 percent increase in the number of donor-advised fund accounts for the same year.