The late winter and spring can be giving seasons, too.
Account holders of Schwab Charitable donor-advised funds (DAFs) granted more dollars earlier in the year than ever before, according to an announcement released today. More than 420,000 grants worth just shy of $2 billion were distributed during fiscal year 2018, ending on June 30. The dollar sum represents a 20-percent increase over 2017’s total of $1.6 billion.
The charities most supported by dollars through San Francisco, Calif.-based Schwab Charitable were Feeding America, American Red Cross, Planned Parenthood, The Salvation Army, and Doctors Without Borders.
The grant distribution represents a more-than twofold increase over 2014’s $822 million. Grants have consistently climbed during that span from just over $1 billion in 2015 to $1.18 billion in 2016 and $1.6 billion in 2017. Schwab Charitable donors have recommended $10 billion in grants to 130,000 charities since the organization’s inception 20 years ago.
Though the 20-percent year-to-year increase continued an upward trend, it was dwarfed by the percentage increase of grants that were recommended in the first half of 2018. From January through June, more than $925 million in grants were recommended, a 40-percent increase over the same period in 2017.
As questions about how the economy and tax reform will influence giving mount, Schwab Charitable is the second commercial DAF to report a strong start to 2018. In March, Boston, Mass.-based Fidelity Charitable reported that it took grantmakers until March 13 to reach $1 billion. The milestone took until mid-April in 2017, representing a 42-percent increase as compared to 2017’s pace.
Some fundraising experts have predicted that DAFs may become increasingly popular among middle-tier donors who might have lost the benefits of itemizing their charitable tax deductions following the increase of the standard deduction to $24,000 for joint filers. “Bunching and smoothing” is a concept in which a donor who might, for example, give $10,000 per year instead gives $30,000 into a DAF in one year, itemizes, and then grants those dollars over the next several years while taking the standard deduction. The cycle then repeats.
“Despite the volatile start to 2018, donors continue to rely on the convenience and tax efficiency of their donor-advised fund accounts to give highly appreciated assets to charity,” Kim Laughton, president of Schwab Charitable, said. “And while time will tell how the new tax law affects charitable giving, the strong start to 2018 suggests that our philanthropically-minded donors will continue giving generously even in this new tax and market environment.”