Schwab Charitable Took In $1.9 Billion

October 10, 2016       Mark Hrywna      

Donors to Schwab Charitable jumped grants increased by 17 percent and their value by 15 percent last year. Schwab Charitable’s 2016 annual giving report released last week reported $1.18 billion in total grants and $1.92 billion in total contributions to more than 56,000 organizations.

The San Francisco, Calif.-based donor-advised fund also boasted of its survey of donors, 65 percent of whom said they give more because they have a Schwab Charitable account.

It’s the second year in a row that total grants exceeded $1 billion. Form 990 Fiscal Year Ending 2015, which was filed in March, reported $2.1 billion in contributions and $1.05 billion in grants. Total grants from Schwab accounts rose 12 percent and scheduled or recurring grants increased 50 percent year over year, according to the report.

The top five supported charities, by approximately number of grants in 2016, were:

  • Feeding America, 3,400
  • Doctors Without Borders, 2,200
  • The Salvation Army, 2,100
  • United Way, 1,300
  • Habitat for Humanity, 1,200

More than half of the number of grants went to organizations within the health and human services (28 percent) or religion (26 percent) sectors.

About 2,300 grants were made from a mobile device and 82 percent were made online during 2016.

California (18 percent) and New York (10 percent) accounted more than a quarter of all grant recommendations, while most other states reflected less than 5 percent of most grant recommendations. About 62 percent of grants and about 57 percent of grant dollars go to a donor’s home state, according to the report.

Almost two-thirds of assets under management with advisors (62 percent) are in “late stages of the wealth cycle,” the kind of clients who are most likely to be charitably inclined.

Of the $1.9 billion contributed in 2016, 59 percent was noncash and 41 percent was in cash. Types of noncash assets contributed include publicly traded securities, Initial Public Offering (IPO) stock, restricted stock, privately held business interests, real estate, and private equity and venture capital. When appreciated assets held for a year or more are contributed to a charity or donor-advised fund, they are typically not subject to capital gains taxes when sold.

The median donor-managed account is $17,000 while the median professionally managed account is $540,000. Four out of five of account assets (79 percent) have an associated professional investment advisor.

Since inception, Schwab Charitable has made 1.2 million grants valued at more than $6.6 billion. Schwab calculated a five-year average payout rate of 20 percent. About 48 percent of contributed assets have been granted since inception. The 10- and 15-year distributions rates are 76 percent and 90 percent, respectively, based on contributions made in 1999 and 2004, according to the report.