Donor-Advised Funds Continue Record Numbers

October 24, 2014       Patrick Sullivan      

Fidelity Charitable distributed what the organization called a record number of grants from its donor-advised funds (DAFs) during the first nine months of this year. The organization made more than 370,000 donor-recommended grants, amounting to some $1.6 billion – 27 percent higher than the same period in 2013. San Francisco-based Schwab Charitable also reported an increase of 34 percent in grants for the first nine months of 2014, up to $572.2 million.

“Our donors are highly engaged in philanthropy and it is their generosity that drove our record granting,” Fidelity Charitable President Amy Danforth said in a statement. “The fast pace of grantmaking early in the year may be a promising sign as the year-end giving season — a key fundraising period for charities, and when about 40 percent of our donor-recommended grants are made — gets underway.”

Boston-based Fidelity Charitable cited “both planned giving by donors and responses to unanticipated and urgent needs” as reasons for the increase. Last year’s record distribution of $2 billion is expected to be surpassed, said Director of Communications Kim Judecki.

While less than 1 percent of both the number of grants and the total dollar amount, more than 500 grants totaling $3.8 million were distributed in response to the Ebola epidemic in west Africa. The Ebola granting is part of a disaster philanthropy program that started after the 2010 earthquake in Haiti. Unlike giving in times of natural disaster, which Judecki said spikes immediately after the event and trails off after about two weeks, giving for the Ebola epidemic has been building as media coverage intensifies. “Through September 30, we’d seen 270 grants totaling $875,000,” she said. In the first three weeks of October, the number of grants nearly doubled and another $3 million worth of grants were made.

Fidelity Charitable customers have collectively paid more than $2 billion into their DAFs through the first three quarters, a 57 percent increase over the same period last year. The majority of that increase was appreciated assets, especially complex assets such as private business interest. Judecki said that has been driven in part by a jump in mergers and acquisitions this year. The organization had $3.9 billion in revenue and $10.2 billion in net assets through fiscal year ending 2013, according to its most recent Form 990.

About 500 grantee organizations have signed on to receive grants electronically within 24 hours. Judecki said electronic funds transfers (EFTs) launched last October to the organizations that received the most money from Fidelity Charitable, and EFTs are now available to all grantees. Also new is an enhanced donor experience with a streamlined grant recommendation process. Donors can now more easily regrant to organizations they have supported in the past, as well as recommend multiple grants at the same time.