Grants From Donor-Advised Funds Up 16.9 Percent, Study Finds

Contributions to donor-advised funds increased 11.4 percent on a year-over-year basis in 2015, while grants awarded from DAFs increased 16.9 percent, a report from the National Philanthropic Trust finds.

Based on an analysis of data from more than a thousand charitable organizations that administer DAFs, the 2016 Donor-Advised Fund Report (20 pages, PDF or HTML) found that grants from donor-advised accounts in 2015 totaled a record $14.52 billion, while contributions to DAFs totaled $22.26 billion, also a record. In addition, total assets managed by DAFs grew 11.9 percent, to $78.64 billion, continuing a string of year-over-year double-digit increases that began in 2010, while the payout rate for DAFs fell slightly to 20.7 percent, from 21.7 percent in 2014, continuing a downward trend from the 24.7 percent recorded in 2010.

The report also found that the total number of DAF accounts in the U.S. rose 11.1 percent in 2015, to 269,180, while the average account size grew 8.8 percent, to an all-time high of $235,727. National charities and organizations affiliated with financial institutions saw the most growth, with 153,871 accounts (an increase of 20 percent) receiving contributions totaling $12.77 billion (an increase of 21.7 percent) and awarding 7.05 billion in grants (an increase of 29.8 percent). DAF accounts at community foundations totaled 68,168, received $5.53 billion in contributions (down 5.8 percent), and awarded $4.14 billion in grants, while donor-advised accounts at single-issue charities totaled 47,141, received $3.97 billion in contributions, and made $3.34 billion in grants.

According to the report, the increase in contributions to DAF accounts, which have seen a five-year compound annual growth rate of nearly 21 percent, is expected to slow, even as grantmaking is expected to increase and contributions level out, resulting in rising payout rates.

"This shift in philanthropic strategies, from a dated federated funding model to contemporary DAFs, has occurred in the last twenty-five years," said NPT chief executive Eileen Heisman. "[T]he growth in popularity of DAFs is an example of how generations have shifted their approach to giving in America. The next generation wants to be closely connected to their philanthropy, which is reflected in the double-digit growth of DAFs. The steady grant payout rate across economic cycles demonstrates their dedication to giving."