November 15, 2016 | AUTHOR: Eileen R. Heisman
NPT Releases Our 2016 Donor-Advised Fund Report
National Philanthropic Trust is proud to release our 10th annual Donor-Advised Fund Report. For the sixth consecutive year, there was growth in all key metrics—number of individual donor-advised funds (DAFs), total grant dollars from them, total contributions to them and total charitable assets in them.
Key findings from the 2016 Donor-Advised Fund Report:
↑ Total charitable assets available for grant making in all DAFs totaled $78.64 billion (11.9 percent increase compared to $70.27 billion in 2014, continuing a trajectory of double-digit growth every year since 2010)
↑ Grants from DAFs to qualified charities totaled a record $14.52 billion (a 16.9 percent increase from $12.42 billion, furthering a double-digit annual payout rate of 20.7 percent for the 10th consecutive year, compared to the 5 percent mandatory minimum for foundations)
↑ Contributions to DAFs totaled $22.26 billion (11.4 percent increase from $19.98 billion)
↑ DAF accounts totaled 269,180 in the U.S. (11.1 percent increase from 242,390 accounts)
↑ The average size of DAF accounts reached a record $235,727 (8.8 percent increase from $216,760)
What's Driving DAF Growth?
For the first time in history, a DAF charitable sponsor surpassed the United Way as the largest charity in the country. It has people asking "why DAFs?" Donors, financial advisors and industry leaders all want to learn more about DAFs, why they have experienced such tremendous growth and what makes them so popular.
While the motivations for giving have stayed the same for centuries, the methods have evolved. Today’s donors are highly engaged in their giving. Baby Boomers and Millennials in particular want a close connection to their philanthropy and to track their charitable impact. DAFs provide the flexibility and management donors are seeking. This shift in philanthropic strategies, from a dated federated funding model to contemporary DAFs, has occurred in the last 25 years. Similar to the Greatest Generation handing over the reins of the economy, the growth in popularity of DAFs is an example of how generations have shifted their approach to giving in America. The next generation wants to be closely connected to their philanthropy, which is reflected in double-digit DAF growth.
We predict that DAF growth will continue as donors grow more knowledgeable about using DAFs to implement their charitable vision. Other predictions in the 2016 Donor-Advised Fund Report include: growth in DAF grantmaking, steady payout rates and an increase in illiquid asset donations to DAFs. DAFs are a dramatically growing philanthropic vehicle and are being woven into the American way of giving. We are proud to serve our donors, educate the public and offer DAFs as a way to realize philanthropic goals.