Giving From Donor-Advised Funds Climbs in 2013, Says Fidelity Report

Donors to Fidelity Charitable, which manages $12-billion worth of donor-advised funds, increased the average size and frequency of their gifts last year, bringing the average grant size back closer to pre-recession heights, according to a new report.

Among Fidelity’s nearly 64,000 charitable accounts, donors made an average of eight grants in 2013, up from seven in 2012. The grants had an average value of more than $4,000 each, up 6 percent from the previous year.

Giving from Fidelity Charitable, the country’s second-biggest charity by private support raised, according to The Chronicle’s latest Philanthropy 400 rankings, continues to skyrocket: It reached a record $2.1-billion in grant making in 2013. But the average grant size is just now creeping back up to where it was before the economic downturn.

Donors, many of whom saw the value of their charitable accounts dip during the recession, are feeling more confident again and ready to “give more money more often,” says Amy Danforth, Fidelity Charitable’s president.

That confidence, she says, may also be behind the increase in the number of gifts of $1-million or more, from 126 in 2012 to 185 last year.

Money on the Move

Donor-advised funds allow people to take an immediate tax deduction for their contributions, then channel the money in their accounts to charities of their choosing. Unlike traditional foundations, they are not subject to minimum-disbursement requirements, meaning assets can remain in the funds indefinitely.

Fidelity’s second annual giving report from the 23-year-old organization provides a counterpoint to critics who say that too much of the money given through donor-advised funds sits idle. The majority of incoming donations were expended as grants within a decade, the data show. For example, 91 percent of contributions made from 1996 to 2000 were given as grants to charities by the end of 2010.

As the report says, for every $10,000 contributed from 1996 to 2000, only $700 remained by 2013.

These analyses cover initial donations only, not investment income, which the report says, has totaled $2.9-billion since the start.

More Charities Benefit

Other of the report’s findings:

• Gifts of assets other than cash, stocks, and bonds—things like restricted stock and privately held securities—accounted for more than 17 percent of contributions last year, up from about 11 percent in 2012.
• Roughly $4 of every $10 of grant money was awarded last year as an unrestricted gift, about the same as in 2012. The report, which called such donations “where needed most grants,” says charities especially welcome them “as they provide the freedom to apply funds in line with the most mission-critical priorities.”
• The report found donors spreading their gifts among an increasing number of charities, from about 77,100 organizations in 2012 to nearly 87,500 the following year.
• Education institutions received the biggest share of grants—34 percent of all the money awarded in 2013. While religious organizations accounted for 16 percent of the gift money, they were the most popular recipients, representing 27 percent of the number of grants made.

This year’s report included a survey component assessing how Fidelity Charitable donors approach philanthropy as a family.

Based on more than 1,100 responses, the report says that donors under 50 years old were one and a half times more likely as donors over 70 to agree strongly that they are teaching or have taught their children to give. Donors with the biggest accounts—those over $1-million—were most likely to express a strong interest in getting family members more involved in giving decisions.