Record DAF Distributions At Fidelity, Schwab

July 15, 2015       Mark Hrywna      

Donor-advised funds continue unabated, with two of the largest – Fidelity Charitable and Schwab Charitable – reporting record distributions for the fiscal year that ended June 30.

Fidelity distributed $2.9 billion through almost 685,000 grants – a 32-percent increase from the previous year and a payout ratio of 28 percent. Grants by donors to Schwab also were up 30 percent compared to the previous year and eclipsed $1 billion for the first time, reaching $1.06 billion through almost 205,000 grants to more than 42,000 charities. The largest number of individual grants by Schwab donors went to charities focused on health and human services, religion, and education.

Boston-based Fidelity also reported a record pace for the first half of 2015 that was one-third more than the same period last year, with more than 310,000 donor-recommended grants representing almost $1.5 billion.

Grants went to more than 69,000 charities, including nonprofits in all 50 states and some international charities. The average Fidelity grant was about $4,700 but ranged from $50 to millions of dollars. There were 166 recommended grants of $1 million or more totaling $329 million, an increase of 60 percent in grants that size compared with the first half of 2014. At Schwab, the average grant was about $5,175.

For the first six months of 2014, Fidelity reported distributions of almost $1.1 billion, with average grants of $4,300 and more than 250,000 awards in all. There were 110 grants of $1 million or more, totaling $241 million.

Fidelity also released updated guidance for donors seeking to support the Nepal earthquake recovery efforts. A massive earthquake this past spring affected more than 8 million people. Organizations working with Fidelity identified six critical areas of need as they shift t he focus from short-term triage to stabilizing the county:

  • Shelter
  • Sanitation and public health
  • Health facilities
  • Women’s health
  • Child nutrition
  • Education

The two donor-advised funds combined for more than $10 million in grants specifically designated for Nepal relief efforts. Through June 30, Fidelity Charitable made more than 5,811 donor-recommended grants totaling almost $7.8 million. San Francisco-based Schwab reported more than $2.23 million through 1,651 grants.

Since inception in 1991, 65 percent of contributions to Fidelity Charitable have been expanded, according to Fidelity. That’s more than $20 billion in grants to more than 210,000 charities. Schwab reports that more than 90 percent of contributions into its charitable accounts have been distributed to charities within 10 years.

More than two-thirds of contributions to Schwab Charitable donor-advised funds were appreciated investments or assets. Donors who give appreciated assets that have been held for more than one year directly to public charities can generally claim the full, fair market value as a charitable contributions and will not owe capital gains tax on the sale of assets.

Donor-advised funds have seen tremendous growth in the last decade, but some have raised concerns about whether contributions are distributed to charities quickly enough.