Growth in Recent Years
Donor-advised funds grew further in 2015. Donor-advised fund grantmaking rose markedly 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 More than 16% to Exceed $14 billion
Grants from donor-advised funds to charitable organizations reached a new high at $14.52 billion. This is a 16.9 percent growth rate compared to a revised total for 2014 grants of $12.42 billion. The compound annual growth rate from 2010 to 2014 was 14.5 percent. Donor-advised fund grantmaking in 2015 increased more quickly than the average over the prior five years.
Contributions at All-Time High
Contributions to donor-advised funds in 2015 totaled $22.26 billion, also an all-time high. This number surpasses the revised 2014 value of $19.98 billion and shows an increase of 11.4 percent. The compound annual growth rate for contributions from 2010 to 2014 was 20.9 percent. In 2015, contributions to Community Foundations and Single-Interest Charities slowed, which is reflected in the lower rate of growth overall.
Charitable Assets Passed $78 Billion
Charitable assets under management in all donor-advised funds totaled $78.64 billion in 2015, an all-time high, with growth of 11.9 percent compared with 2014. The increase in total charitable assets can logically be attributed to the 2015 growth in the number of individual donor-advised funds (an 11.1 percent increase) and contributions (an 11.4 percent increase) in addition to rapid growth in both metrics in 2014. It is likely that investable charitable assets at some donor-advised funds’ charitable sponsors generated gains, as well.
Number of Donor-Advised Funds Saw Steady Increase
The number of donor-advised funds increased by 11.1 percent in 2015, to 269,180. This figure sustains the annual growth rate of 5 percent or better reported since 2012. The number of individual donor-advised funds at Single-Issue Charities held relatively steady, showing 1.4 percent growth; Community Foundations increased by 3.1 percent; and National Charities saw the largest increase, with 18.6 percent more individual donor-advised funds than previous year.
Grant Payout Remains Above 20%
Grant payout rates from donor-advised funds annually exceed 20 percent for every year on record. For 2015, the payout rate was 20.7 percent. The highest payout rate was in 2010, at 24.7 percent. In that year, the payout rate was based on 2009 year-end assets, which reflected the market decline that affected investments throughout the U.S. Donors maintained high levels of grants, however, so the total payout rate was comparatively high.
In contrast to the 20-plus percent grant payout rates from donor-advised fund accounts, the payout rate at a typical private foundation is usually around 5 percent, which include operational expenses, such as salaries, rent, and legal and accounting fees. 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 Donor-Advised Fund Size Rose
The 2015 average size of an individual donor-advised fund based on available data is estimated to be $235,727. This is 8.8 percent higher than the revised estimate for 2014 average account size of $216,760.