Donors Remain Loyal to DAFs as Overall Giving Declines

Trends have shown both annual and major donors pulled back their charitable gifts last year due to economic uncertainty. Despite that, giving from donor-advised funds (DAFs) remained strong last year. And so far this year — or fiscal year for some DAF grantors — that remains true. 

Here’s a look at DAF figures broken down by the grantor, followed by a few unique ways DAFs are supporting nonprofits.

The State of DAFs by Grantor

Across some of the top grantors that recently shared year-end or fiscal-year-end roundups of their grant recommendations, DAFs accounted for roughly 3.5 million grants, totalling about $23 billion. 

Here’s a look at the breakdown of some of the largest DAF grantors.

Fidelity Charitable

Fidelity Charitable, the largest donor-advised fund grantor, gave $11.2 billion grants in 2022, almost $1 billion, or 9%, more year over year. The 2022 figure includes 2.2 million grants going to 189,000 nonprofits. In total, almost 304,000 donors recommended grants to 189,000 unique nonprofits, according to the “2023 Fidelity Charitable Giving Report” (opens as a pdf).

The average grant at Fidelity Charitable was $4,798 — nearly $400 more than the previous year. About 56% of its nearly 186,000 DAFs have a balance that is less than $25,000. 

Meanwhile, each donor recommended nearly 12 grants on average over the course of the year. 

“Despite volatile market conditions and economic unknowns, Fidelity Charitable donors stepped forward to bolster the critical work of nonprofits in our communities, recommending almost $1 billion more to charities than in the prior year,” Jacob Pruitt, president of Fidelity Charitable, said in a statement. “The upward trend demonstrates how donor-advised funds make it possible for donors to maintain giving over time — even in moments of crisis or during market downturns when nonprofits are particularly vulnerable and need steady streams of revenue that they can count on.”

Schwab Charitable

Schwab Charitable distributed a million grants totalling $5 billion in its fiscal year that ended on June 30. That sum — 8%, or almost $350 million, more than the previous year — moves Schwab Charitable up to the second largest DAF grantor. 

This fiscal year’s tally included a million grants distributed to more than 120,000 charities. 

“I’m truly inspired by the generosity of our donors over the last 12 months and proud to share how they put their charitable dollars to work in record-breaking amounts this year,” Sam Kang, president of Schwab Charitable, said in a statement. “Donor-advised funds have proven to be a resilient tool for donors, who were able to increase their support of nonprofit organizations despite economic volatility in the last year.”

National Philanthropic Trust

Dropping to No. 3, the National Philanthropic Trust granted $4.6 billion in fiscal year 2023, which ended on June 30. That amount means the grantor has almost $1 billion fewer in grants year over year. Still, its donors provided more than 100,000 grants to more than 36,000 nonprofits in fiscal year 2023. Despite the reduced dollar amount, the number of grants represents a 4% increase. 

This follows a 2022 that ended strong with $6.1 billion in grants. 

“The data highlights how actively and reliably our DAF donors are supporting charitable organizations during global economic uncertainty,” Eileen Heisman, CEO of National Philanthropic Trust, said in a statement. “During the Great Recession and the height of the COVID-19 pandemic, DAF grantmaking grew at historic rates. Now, charities are facing the impact that inflation and high interest rates are having on their operating budgets and missions. Consistent unrestricted giving, the most common grants that DAF donors recommend, helps charities to further their respective missions in the U.S. and around the world.”

Vanguard Charitable

Vanguard Charitable reached $2.1 billion — an 11% increase — across nearly 200,000 grants in its fiscal year that ended on June 30. Donors supported more than 53,000 nonprofits, with a 17% increase in average gift of $10,972. 

"We are deeply moved by our donors' generous support of nonprofits in need," Rebecca Moffett, president of Vanguard Charitable, said in a statement. "The incredible increase in granting this fiscal year exemplifies how our donors consistently leverage their DAFs to maximize and extend their charitable impact — even in the face of economic uncertainty and headwinds in national levels of giving. This again demonstrates the power of a DAF and how funds already earmarked for charity remain available and ready to be deployed to nonprofits in need both immediately and over the long term."

How DAF Donors Are Supporting Nonprofits

There are a variety of ways DAF donors are further supporting the organizations they care about. In a time when organizations struggle with restricted funding, fewer donors and declining donations, DAF trends appear to be the opposite of sector-wide trends. Here are a few ways DAF donors are defying overall donor trends. 

Providing Unrestricted Gifts

Vanguard Charitable noticed a continued trend of donors providing unrestricted gifts, with about half of the grants during its most recent fiscal year designated as such. 

"Unrestricted gifts are incredibly valuable,” an employee from a small Midwestern charity that receives DAF grants told Vanguard Charitable. "They show a donor understands and trusts the recipient organization."

Fidelity Charitable noted 64% of 2022 grants were labeled “where needed most,” the grantors’ designation to give nonprofit flexibility. 

“We heard from our donors through [2022] that they were concerned about the impact of inflation and the economy,” Pruitt said in a statement. “What we saw through their record granting activity and support for 189,000 nonprofits in communities across the nation is that they were able to put that concern into action, not only sustaining their giving but increasing it.”

Assisting During Emergencies

Fidelity Charitable has noticed that donors are keeping their DAFs as reserves so they’re ready to respond to emergency situations, such as the war in Ukraine, flooding in Kentucky and Hurricane Ian in Florida. Those trends were evident in shifts among 2022’s most popular nonprofits, with organizations on the top 20 list receiving support from between 3,000 and 12,000 accounts. 

While Doctors Without Borders USA and St. Jude Children’s Research Hospital remained No. 1 and No. 2, respectively, other organizations made large leaps due to their emergency relief efforts. Here are the biggest moves based on 2022 figures: 

• World Central Kitchen jumped 23 spots to No. 3.
• U.S. Fund for UNICEF leaped onto the list at No. 8 by moving up 14 positions. 
• Save the Children Federation landed at No. 12 after rising 25 locations.
• Cooperative for Assistance and Relief Everywhere (CARE) went from No. 97 to No. 20.

Becoming New and Retained Donors

For Fidelity Charitable, 23% of donors are new to an organization while 77% are retained donors. Additionally, 81% of donors include their name and address with the donation, allowing the organization to further steward the donor and grow that relationship outside of their DAF gifts.

Turning Into Recurring Givers

Furthermore, many donors are becoming sustainers for their favorite charities through donor-advised funds. Through Schwab Charitable’s fiscal year, donors gave 12 gifts, on average, with 35% of grants configured as recurring gifts — a 20% increase over the previous fiscal year. 

Meanwhile, Vanguard Charitable distributed more than $114 million — 11% more fiscal year over year — across 37,000 recurring grants.

Increasing Their Gift Sizes

Aside from becoming sustainers, donors are giving appreciated non-cash assets — whether directly to nonprofits or to their DAFs. This potentially eliminates donors’ capital gains tax liabilities, thus increasing the gift by as much as 20%, according to Schwab Charitable. 

Investing dollars into a DAF helps donors to grow their funds before donating as well. And despite thoughts that Americans are storing money in their DAFs and not distributing the funds, Fidelity Charitable found that 75% of dollars contributed are dispersed within five years of receipt.

As described in the “2023 Fidelity Charitable Giving Report”: 

“A first-in, first-out analysis of contribution and grant dollars reveals that within five years of a $100 contribution to Fidelity Charitable, $74 has been granted to charities. After 10 years, $89 has gone to charities and only $11 remains to be granted. This continuous flow of grant funds to charities is consistent from year to year — reflecting the steady support that donor-advised funds provide for the philanthropic sector.”