Schwab Reports Grants Up By A Third

Donor-advised fund (DAF) accounts in Schwab Charitable increased the dollars granted by 33 percent and the number of grants by 26 percent in fiscal year 2019 compared to the previous fiscal year.

San Francisco, Calif.-based Schwab Charitable facilitated more than $2.4 billion in grants to more than 83,000 charities, with among the most widely support recipients similar to the previous year: Feeding America, Planned Parenthood, Doctors Without Borders, Campus Crusade for Christ (Cru) and Salvation Army.

More than 420,000 grants worth just shy of $2 billion were distributed during fiscal year 2018, which was a 20-percent increase over the 2017 total of $1.6 billion. Schwab Charitable operates on a fiscal year that runs from July 1, 2018 to June 30, 2019. The five-year average payout rate is about 17 percent annually, according to Schwab Charitable. The calculation is designed to approximate the payout rate for private foundations, by using priori year assets, to be able to compare different giving vehicles.

In its most recent IRS Form 990, filed in February for the year ending June 2018, Schwab Charitable reported contributions of $3.3 billion, grants of $1.8 billion and net assets of $12.895 billion.

“Thanks to strong market performance over the majority of the last 12 months and a growing familiarity with the relatively new tax law, donors found the 2019 fiscal year to be an especially good time to give,” Schwab Charitable President Kim Laughton said in a press release announcing the results.

More than a year after the Tax Cuts and Jobs Act (TCJA) was enacted, some donors also realized that they could benefit from “bunching” or concentrating their charitable contributions, including contributions of appreciated non-cash assets. Individuals who employ this strategy make charitable contributions in higher income years and then recommend grants to charities of their choice over time. This enables some donors to itemize charitable deductions in some years and benefit from the increased standard deduction in other years, according to Schwab.

Two-thirds of contributions to the Schwab Charitable were non-cash assets, including publicly traded securities, restricted stock, real estate and privately held business interests.

In fiscal year 2019, older generations with Schwab DAF accounts generally gave more, with greater frequency, on average:

Greatest Generation (born before 1946), recommended 12 grants, $12,000 each, eight charities;
Baby Boomers (1946 to 1954), 10 grants, $5,000 to seven charities.
Generation X (1965-1984): seven grants, $7,000, five charities; and,
Millennials (1985-2004): six grants, $4,000, three charities.

“Through our conversations with donors, we find that Millennials are particularly interested in increasing their impact by combining philanthropic giving with socially responsible investing,” Laughton said. “This younger, passionate donor cohort will re-shape philanthropy in the years to come,” she said.