Schwab Reports 12-Percent Boost In Grants

July 18, 2016       Andy Segedin      

This story has been updated to include additional information.

Donors to Schwab Charitable gifted $1.2 billion in grants during the 2016 fiscal year, a 12-percent increase from 2015. More than 56,000 charities received grants from Schwab Charitable donors, an increase of more than 30 percent from last year’s 42,000 recipients.

Nonprofits focused on health, human services, religion and education were the primary beneficiaries of grants, according to an announcement made last week. Organizations providing assistance to Syrian refugees such as Doctors Without Borders, International Rescue Committee and Save the Children Foundation were also a focus, receiving a combined $6.9 million.

A total of $1.9 billion was contributed to Schwab Charitable during the 2016 fiscal year, according to a spokesperson. The San Francisco, Calif.-based DAF reported $2.1 billion in contributions for the fiscal year ending June 30, 2015.

More than half, 59 percent, of contributions into donor-advised fund accounts were non-cash investments or assets – down from 68 percent and 63 percent in 2015 and 2014, respectively. Such investments and assets included stock, interests in private businesses, real estate and hedge funds. Appreciated assets held for a year or more are not typically subject to capital gains tax when sold, meaning that donors might realize up to 20 percent in tax savings.

“Despite a tumultuous year for stock markets and investments, donor-advised funds are proving to be a steady force in philanthropy, and we remain committed to providing our donors with simple, tax-smart and efficient solutions that help them give most effectively,” said Kim Laughton, president of Schwab Charitable.

Critics have taken aim at donor-advised funds as accounts swell. Criticisms have ranged from a need for greater transparency and regulation to claims that the mechanism disrupts the flow of funding from benefactor to organization.

Contributions into accounts are paid out at a rate of over 90 percent within 10 years, according to Schwab Charitable. A recent study of Schwab donors indicated that 65 percent believe that they give more than they otherwise would due to their donor-advised fund account.

The 2016 fiscal year, which ended on June 30, marked the second consecutive year in which Schwab Charitable grants exceeded $1 billion, after the previous high-water mark of $1.06 billion in 2015. The use of donor-advised funds has shot up in recent years. Last year’s total represented a nearly 30-percent increase over $822 million in 2014, which, in turn, was up 38 percent from 2013.

Grants made through all DAFs hit an all-time high of $12.49 billion in 2014, according to the National Philanthropic Trust’s 2015 Donor-Advised Fund Report.