Fidelity Reports Upswing In DAF Grants

Donor-advised fund (DAF) account holders with Fidelity Charitable recommended $4 billion in grants so far this year (as of July 19), a 48-percent increase compared to the same period last year.

There have been approximately 668,000 donor-recommended grants to 105,000 charities this year. Contributions to the DAF also are up by more than 40 percent so far this year, compared to the same period in 2018.

For the calendar year 2018, there were $5.2 billion in grants, some $700 million more than the previous year.

For the fiscal year ending June 2018, Fidelity Charitable reported $10 billion in total revenue, including $9 billion in contributions, with net assets of $26.9 billion. The Internal Revenue Service (IRS) Form 990 was filed in May.

“The strong rate of grant activity from donors who use a Giving Account underscores how donor-advised funds have become a growing source of reliable nonprofit support during periods of uncertainty or market volatility, such as the dramatic market drop we saw at the end of last year,” Pamela Norley, president of Fidelity Charitable, said in a press release announcing the totals so far this year.

In its announcement, Fidelity noted donors who were able to be strategic with donations through the strategy of “bunching.” In anticipation of tax reform, which was quickly approved by Congress in late 2017 and took effect in the 2018 tax year, donors made larger-than-usual contributions to their giving accounts. Donors then will support charities for several years while taking advantage of the tax incentives as fewer individuals are itemizing their deductions because of the increase in the standard deduction.

Fidelity Charitable also added the cryptocurrency Ripple to the assets that can be donated. Since 2015, Fidelity Charitable accounts have contributed more than $106 million in cryptocurrencies. The vast majority of those contributions came during the height of bitcoin’s value in 2017 when $69 million was donated to Fidelity DAFs. An estimated $30 million was contributed via cryptocurrency in 2018 and $7 million in 2016.