Contributions to donor-advised funds increased by 25.5 percent in 2010, reaching $7.77 billion, while grant dollars grew at a slower pace of 1.3 percent.
Released by the National Philanthropic Trust, the fifth annual Donor-Advised Fund Report describes the $7.77 billion figure as a recovery from the recession-caused decline in contributions, seen mostly in 2009.
Total assets of donor-advised funds accounted for $29.96 billion, a 12.3-percent increase over $26.67 billion in 2009, and closer to the pre-recession high of $30.2 billion.
Grantmaking from donor-advised funds totaled more than $6.18 billion, up 1.3 percent over the previous year and the third consecutive year in which donor-advised funds accounts eclipsed $6.1 billion. The report noted that even in 2009 grantmaking remained at high levels.
The payout rate from donor-advised funds was 17.1 percent, down from the 18.5 percent in 2009. Donor-advised funds have paid out more than 16 percent of assets annually for at least four years, the report noted.
Donor-advised contributions fluctuated with the Dow Jones Industrial Average from 2007 to 2010, according to the report, but did so with a one-year lag. In other words, the Dow fell sharply between 2007 and 2008, but the drop in donor-advised fund contributions occurred between 2008 and 2009.
The number of donor-advised funds declined slightly, some 0.05 percent, from 161,967 in 2009 to 161,873 last year. The average size of a donor-advised fund exceeded $185,000 in 2010, marking a recovery from the $164,663 average in 2009 but is still lower than the $192,547 average in 2008 and $202,851 in 2007.
For the donor-advised fund programs at the 32 national organizations surveyed, the report found 88,428 accounts with assets totaling $11.99 billion, a 3.2-percent increase over 2009. Total contributions to those accounts was $3.98 billion, up from 2009’s $2.79 billion but down from $4.04 billion in 2007 and $4.29 billion in 2008.
The number of donor-advised fund accounts in community foundations increased by 2 percent to 42,913 in 2010, up from 42,060 in 2009. Assets totaled $12.55 billion, up 11.3 percent from 2009’s $11.28 billion. Total contributions dropped 3.2 percent from 2009 to 2010, from $2.10 billion to $2.04 billion.
The number of accounts in single-issue organizations dropped by 10.7 percent from 2009 to 2010, from 34,190 to 30,532. Total assets increased to $5.42 billion, 1.5 percent more than 2009’s $5.34 billion.
Founded in 1996, the National Philanthropic Trust connects prospective contributors with nonprofits and partners with financial service firms and professional advisors to provide them with financial products and services for their clients.
The report cites its numbers as proof of the attractiveness of the flexibility of donor-advised fund accounts.
For the 2011 report, the organization studied 478 nonprofits that sponsor donor-advised funds, relying primarily on the Internal Revenue Service (IRS) Form 990, as well as audited financial statements, annual reports, organizational websites and news releases. Included in the study were 32 national charities, 267 community foundations, and 179 single-issue organizations.
The report estimated charitable giving in the U.S. at $291 billion in 2010, relying on information from Giving USA. The $7.77 billion in donor-advised funds constitutes 2.6 percent of overall giving.