Donor-Advised Fund Giving Could See Another Record Year
In the first half of 2021, donors have recommended a record $4.3 billion in grants, a 27% increase over the same six-month span of 2020. Fidelity Charitable, an independent public charity and the nation’s largest grantmaker, distributed those gifts to more than 123,000 charities.
That jump is further solidified by data showing that 2020, too, saw a sharp increase. In fact, 2020 set a record with $9.1 billion given through donor-advised funds — a 24% increase from 2019.
“These incredible results suggest that our donors could surpass the record granting in 2020, showing us that people continue to prioritize generosity as we define the ‘new normal,’” Kristen Robinson, chief operating officer at Fidelity Charitable, said in a statement. “It’s very heartening to see much-needed support going to nonprofits as they continue to face challenges.”
Fidelity Charitable, which launched the first national donor-advised fund program that it calls a "giving account," attributes the spikes to its clients responding to the pandemic, social justice and needs in their communities.
To establish a fund, donors make a tax-deductible donation via cash, stocks or non-publicly traded assets to Fidelity Charitable or another IRS-qualified public charity that sponsors a donor-advised fund program. The donor can make additional contributions to the fund, which is in the donor's name, and that fund might grow depending on how the donations are invested.
James Lui, one of the program’s 270,000 donors, has prioritized large-scale nonprofits addressing racial equity, as well as local charities, specifically those focused on the Asian community. He found that the growth from his donor-advised allowed him to give 10 times as much money to charities in the five years he had the account.
“It’s my mother’s legacy that I’m using to support these organizations,” Liu said in a statement. “These are donations that I would be making even without a giving account, but the giving account helps me give on a much larger scale than before.”
Amanda L. Cole is the editor-in-chief of NonProfit PRO. She was formerly editor-in-chief of special projects for NonProfit PRO's sister publication, Promo Marketing. Contact her at email@example.com.