Donor Advised Funds Cash Staying In The Neighborhood

The average number of grants per giving account held at Fidelity Charitable during 2012 was seven with the average grant of $3,773. According to Fidelity Charitable, more than $900 million was granted in amounts of $50,000 or more.

The typical donor is a mature individual living in a major metropolitan area who actively supports philanthropic causes, according to the firm, which issued its first report on the demographics and giving patterns of more than 94,000 individuals who are tied to 57,779 accounts. The median giving account balance is $14,450.

Fidelity Charitable is an independent public charity that operates a national donor-advised fund (DAF) program.

To show how donors use their accounts over time, one dataset reviewed is giving accounts established prior to 2007. In this dataset, nearly 22 percent of donors recommended grants totaling almost the entire balance of their account, leaving a balance of $200 or less, by the end of 2012. Of the remaining 78 percent of donors, 70 percent recommended grants in at least five of the past seven years and the other 30 percent still actively supported their favorite charities, recommending grants amounting to 69 percent of their total contributions by year-end 2012.

“A key driver behind releasing the Fidelity Charitable Giving Report is to provide the nonprofit organizations we support with an inside look at how these donors approach philanthropy,” said Sarah Libbey, president of Fidelity Charitable. “That insight can help them tap the growing popularity of DAFs.”

While donors support a wide range of nonprofits, grants were made to more than 160,000 public charities. Many of those gifts are staying close to home. Some 57 percent of grants are made to nonprofits in the primary account holder’s home state.

By sector, religious organizations accounted for the largest proportion of grants made at 27 percent, but education attracted the largest proportion of grant dollars at 26 percent in 2012.

When giving accounts are analyzed by size, the proportion of grants made to religious organizations decreases dramatically as the size of the account increases. The proportion of grants to nonprofits in the education, human services, society benefit, and health shows the opposite trend, increasing as the account size grows. Grants to three sectors — environment and animals, arts and culture, and international affairs — are steady regardless of account size.

The average primary DAF account holder is 62 years old and sets up an account at 54, likely attributable to the mid-50s being the age at which people tend to begin to approach charitable giving and legacy planning in a more thoughtful and forward-looking manner, according to the firm. Some 40 percent of donors have maintained a giving account for more than 10 years and more than 13 percent have had an account at least 15 years.

To download the complete Fidelity Charitable Giving Report, visit http://www.fidelitycharitable.org/giving-report.