Donor-Advised Funds Soar in Popularity as Nonprofits Successfully Engage New Donors

In 2022, donor-advised fund holders granted more than $52 billion, a 9% increase over the previous year, according to the “2023 Donor-Advised Fund Report.” The report also noted the number of accounts has neared 2 million. With DAF-giving rising in 2023 among the largest four DAF-sponsoring organizations that release their grant figures publicly, this giving method is expected to continue to grow. 

Our DAF roundup includes the four biggest reporting DAF charities sharing year-over-year grant totals, as well as a look at how this revenue stream is impacting nonprofits.

Top DAF Grantor Organizations in 2023

Though there are hundreds of DAF organizations, here are the top grantors that publicly released their grant figures for 2023. 

Fidelity Charitable

Fidelity Charitable reported almost $11.8 billion in grants from its donor-advised fund holders in 2023. With more than 322,000 donors recommending more than 2.3 grants to nearly 199,000 charities around the world, 2023 resulted in an almost $600 billion increase in gift dollars. Last year, 1,345 of those grants were $1 million or more, according to Fidelity Charitable’s “2024 Giving Report.”

Each donor gave 11.8 grants on average, with an average size of about $4,600. Fidelity Charitable currently oversees 198,000 accounts with a median balance of about $21,000.

“The American tradition of philanthropy continues to inspire and defy expectations,” Jacob Pruitt, president of Fidelity Charitable, said in a statement. “As more donors and companies turn to smarter, more flexible giving avenues like the donor-advised fund, we expect to continue to see a rise in generosity and, in effect, a rise in impact.”

Schwab Charitable

Schwab Charitable granted $6.1 billion to 127,000 charities, a 31% and 11% spike, respectively, in 2023. Though this DAF-sponsoring organization’s fiscal year ends June 30, it released its calendar year numbers as well. 

Notably, Schwab Charitable noticed a significant number of grants recommended during year-end giving, specifically GivingTuesday through Dec. 31 when donors recommended 250,000 grants totaling $1.5 billion. 

“The generosity of our donors continues to inspire us year after year,” Sam Kang, president of Schwab Charitable, said in a statement. “And despite recent economic uncertainty, political turmoil and market volatility, our donors demonstrated their commitment to giving back with yet another historic year of granting.” 

National Philanthropic Trust

After a down year for the last fiscal year reported, National Philanthropic Trust rebounded by granting $4.94 billion through more than 119,000 grants to more than 39,000 charities in 2023. 

“While 2023 began with global economic uncertainty, it ended with markets rebounding, reduced inflation, positive news on key financial indicators, and the Federal Reserve signaling lower interest rates to come,” Eileen Heisman, then-CEO of National Philanthropic Trust, said in a statement earlier this year. “As the leader of NPT and among the longest-tenured DAF sponsor CEOs, this positive news gives charitable organizations the opportunity to identify and engage with new and existing DAF donors. Cultivating these donors today lays the foundation for future growth to support important community work.”

Vanguard Charitable

Last year, Vanguard Charitable donors recommended more than $2.6 billion to nonprofits, a 39% year-over-year increase and the seventh straight year of growth for the grantor. That billion-dollar figure includes more than 209,000 gifts to more than 56,000 nonprofits. The average grant was more than $12,000. Though the DAF-sponsoring organization runs on a fiscal year that ends on June 30, it provided calendar year figures this year. 

“Being able to respond nimbly, plan thoughtfully, and give more over time are hallmarks of donor-advised funds, and we’re proud to assist donors in implementing giving plans that make a difference locally and globally,” Rebecca Moffett, president of Vanguard Charitable, said in a statement. “Our donor generosity hit an all-time high in 2023, and we certainly look forward to continued generosity for years to come.”

7 Ways DAFs Are Impacting Nonprofits

Despite speculation that wealthy people are amassing money in donor-advised funds, the figures coming from DAF organizations don’t support that narrative. At Fidelity Charitable, 88% of account holders recommended at least one grant in 2023 and about 75% of dollars contributed to DAFs, on average, are granted within five years. 

And these grants are reaching organizations of all sizes, according to Fidelity Charitable.

Here are six ways DAFS are impacting nonprofits.

1. Reaching Donors Where They Are

Many grantors continue to support nonprofits through their DAFs. For example, 78% of Fidelity Charitable grants were repeat gifts in 2023. While 47% were simply a regrant, 31% were a scheduled grant, showing loyalty to a nonprofit and an emerging type of recurring donor.

“Close to 25% of our donations come from DAFs,” Matt Forti, managing director of One Acre Fund, a National Philanthropic Trust grant recipient, said in a statement. “Our donors with DAFs are reliable and committed to our organization, which now more than ever is extremely helpful and gratifying.”

At Schwab Charitable, 35% of grants were recurring gifts. And though retention is crucial, so is acquiring new donors, which is why it is also notable that 69% of donors granted to a new organization in 2023.

2. Providing Faster Support During Disasters

Vanguard Charitable donors estimate that 15% of their annual giving via their DAFs is unexpected, according to the “Why Giving Matters” report. The research indicated that a humanitarian crisis (61%) and natural disaster (54%) are the strongest drivers of this unexpected giving, but 32% of donors indicated a new solicitation pushed them to give. 

Schwab Charitable shares The Center for Disaster Philanthropy to help donors find vetted organizations assisting in the recovery efforts of recent disasters. Through that list, donors recommended $124 million to ongoing crises. 

“We did not realize how easy a donor-advised fund makes it to distribute grants and, as a result, probably results in us making more frequent grants,” a Schwab Charitable donor identified as Gary F., said in a statement.

3. Giving the Ability to Steward Donors Across Other Channels

Though these donors were previously believed to be mysterious donors, 81% of Fidelity Charitable grants include the recommending donors’ names and addresses, and another 15% include the account name, leaving only 4% as truly anonymous.

In a session about the Great Wealth Transfer at the Nonprofit Fundraisers Symposium, Alison Morse, vice president of philanthropic consulting at National Philanthropic Trust, shared tips on learning more about anonymous and those with account names only. While some account names may be obscurely named, making identifying the donor difficult, conversations with your high-net-worth donors may help to solve the mysteries of these anonymous DAF grants. 

“Many donors we work with have a foundation, they might have a DAF, they have multiple vehicles that they're working in as their kids come into philanthropy,” Morse said at the conference. “That's when we see some more of those anonymous accounts because they want to protect their kids' identity in terms of if they have an 18-year-old, 22-year-old who's starting to give.”

4. Creating a New Channel for Corporate Support

Fidelity Charitable noted more than 500 companies are using its Corporate Giving Account, giving an average of 65 grants and an average of almost $11,000 per grant. The 23,000 corporate grants totaled $256 million.

5. Simplifying Non-Cash Gift Processing

Donors who use DAF charities to process their non-cash gifts allow themselves the opportunity to minimize capital gains taxes on the appreciation of the security while converting it to a cash donation — expertise not all nonprofits may have in-house.

Non-cash gifts may include publicly traded securities, such as stocks, bonds and mutual funds, as well as non-publicly traded assets, which consist of private stock, restricted stock, limited partnership interests and cryptocurrency. 

A staggering 63% of gifts to Fidelity Charitable in 2023 were non-cash assets, which breaks down to 54% being publicly traded securities and the remaining 9% being non-publicly traded assets. Almost half of Fidelity Charitable’s $1.4 billion in non-publicly traded assets in 2023 consisted of cryptocurrency. 

6. Increasing Unrestricted Funding for Underfunded Expenses

Though DAF grantors have the option to fund specific line items, 71% of Schwab Charitable donors, 63% of Fidelity Charitable donors and more than half of Vanguard Charitable donors opted for unrestricted gifts in 2023, giving organizations the option to use the funds where most needed in areas like overhead expenses.

7. Funding Nonprofits at Higher Rates Than Traditional Foundations

Despite private foundations having more assets than DAFs — nearly $1.2 trillion, they only paid out about $100 billion in 2022, according to the “2023 Donor-Advised Fund Report.” By paying out 12% on average, that meets their requirement to pay out 5% of their assets annually. However, DAFs are granting almost double that. For 2022, the report cited $52 billion of almost $229 in assets reached nonprofits — nearly 23%.