Donor-advised funds (DAFs) reached a new record for grantmaking during 2021 at an estimated $45.74 billion. DAFs also generated the fastest growth rates on record for contributions and charitable assets — funds that will further encourage grantmaking.
That estimate by the National Philanthropic Trust (NPT) was a 28.2% increase compared to 2020 and was 28.3% more than 2019. The 10-year average rate of change for DAF grantmaking is 17.5% for the decade between 2011 to 2020, data from the NPT shows.
The data is included in the NPT’s 6th annual Donor-Advised Fund Report. The 2022 edition of the report included data from 60 national charities. These national charities which sponsor DAFs had a combined estimated 1,128,475 DAF accounts that granted $32.19 billion during 2021.
The 995 DAF charitable DAF sponsors tracked in the report comprise less than 0.07 percent of charitable organizations. The data is from three types of DAF charitable sponsors are reported by national charities, community foundations and single-issue charities.
The sharp increase in grantmaking, more than $10 billion than the prior year, is even steeper than what was observed at the beginning of the COVID-19 pandemic. Grants from DAFs to qualified charities increased more than 60% during the past two years.
DAF grants have been on an upward trajectory for more than a decade, the data shows. DAF distributions have more than doubled during the past five years and grown 400% during the past decade. According to officials at the NPT, it’s a sign that DAF donors respond quickly in the face of pressing challenges and serve a critical role in sustainable giving.
Recent contributions and charitable assets increased at rates much greater than the 10-year average. For example, charitable assets in DAFs increased significantly as the stock market surged and donors made more contributions. Historically, periods with very strong growth in charitable assets (20% increases or more) are immediately followed by large increases in grantmaking, according to NPT President & CEO Eileen R. Heisman.
Contributions to DAFs during 2021 totaled $72.67 billion, an all-time high, according to Heisman. It surpasses the revised 2020 value of $49.47 billion and is a 46.6% year-over-year increase. The compound annual growth rate for contributions from 2017 to 2021 is 23.6%. “A 46.6% growth in contributions in 2021 is highly unusual, according to Heisman. The second-highest annual rate of increase on record is 35.1%, which occurred in 2012.
Average fund size was pegged at $182,842, a 9% increase from 2020 with 1,285,8012 accounts, a 27.6% increase.
The primary source for the report is each charitable sponsor’s assets, contributions, grants and total number of donor-advised funds from their federal Form 990. For those organizations that filed Form 990 returns for FY2009 and later, this information is found in Schedule D. For organizations that filed returns prior to FY2008, this the analysis might include information found on other portions of Form 990. The NPT National obtained copies of the Form 990s via Candid/GuideStar and ProPublica and used the data available through Amazon Web Service (AWS). In a few cases NPT obtained copies of Form 990 from the organization directly.
