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Fidelity Charitable Donor Advised Funds in 2020

What is this Report?

This report is a review of Fidelity Charitable Donor Advised Funds (DAFs)in 2021. By looking at 153,430 accounts (which is a snapshot since the number fluctuated during the year), Fidelity Charitable reported on the demographics of donors to DAFs, causes supported, and other metrics through 2020.

What are the key findings from the article?

  • In 2020, donor advised grants totaled $9.1 billion from over 2 million grants that supported 170,000 unique charities. That’s an increase in volume of 31% and grant dollars of 24% from 2019. In 2020, donors made more grant recommendations (10.8 in 2019 to12.8in 2020), made 36% more grants of $1M+, and 93% of accounts made 1 or more grants. The average size of grants however, only increased in size by 6%, from $4,358 to 4,614. Most funds (63%) gave grants that were unrestricted.
  • The cumulative lifetime giving of Fidelity Charitable’s Donor Advised Funds is over $51 billion to 328,000 unique charities. Donors increased from 88,672 in 2011 to 254,655 donors in 2020.
  • Donor advised fund money is moving. “On average, three-quarters of donors’ contribution dollars are granted within five years of receipt.” Even though the economy was quite volatile given the virus, Giving Account investments went up by $15 billion in net dollars from $1.4 billion in 2011. The median account balance is $21,637 with 10% of accounts holding over $250K
  • In 2020, two-thirds of contributions were non-cash assets and a majority of them were publicly traded securities. “More than $1.6 billion in contributions were non-publicly traded assets, such as private stock, limited partnership interest or cryptocurrency,” totaling 11%. Cryptocurrency contributions went from $13M in 2019 to $28M in 2020!
  • Most donor advised funds gave to organizations they had supported in the past. But 27% were new grants.
  • Anonymity is not key. Only 4% of DAF donors were anonymous in 2020.
  • Religion, Human Services and Education were the top three categories for 2020. Human Services rose 12 percentage points from 2019 while Education saw as light decline.The top three charities were Doctors without Borders USA, The Salvation Army, and St. Jude Children’s Research Hospital. Fourteen of the top 20 organizations are either health or human services.
  • $490 million was given to pandemic relief. 2017 Hurricane season (Harvey, Irma, and Maria) relief came in second with $52.7 million in grants. Grants to the Centers for Disease Control Foundation went up by 9,582%; Meals on Wheels America went up 2,679% and the NAACP Empowerment Program saw 1,724% increase as well. (Yes! Those percentages are correct!)
  • Over 54,000 accounts have made a memorial grant. Over 17,500 have made grants to sponsor a friend or family in a charity event.

What can I do as a result?

  • Track and create an outreach strategy for donor advised fund givers. Only 4% of DAF account holders are anonymous. While it might take extra time and effort to find these donors, the payoffs can be great. Track these donors in your database and create materials to target them directly. 27% of grants were made to new charities which suggests an opportunity for nonprofits.
  • Remember that some donor advised fund account holders have several ways of giving. They may give directly, through their foundation and corporation, and even through a trust. Considering a donor’s DAF may be just one part of your strategy.
  • While there have been significant critiques and moves to increase regulation of Donor Advised Funds, DAF contributions are moving and responsive to the needs of the moment. In 2020, Jennifer and David Risher started the Half My DAF movement to encourage people to donate DAF monies to charity by September 30th. While DAF holders were generous last year, it is unclear how many DAF holders actually halved their DAFs.
  • Repeating from last year’s review, given the popularity of converting non-cash assets into DAFs, your organization should review how it can help its donors with these assets. Non-cash assets may be even bigger than cash gifts. Russell James, Professor of Charitable Financial Planning at Texas Tech University, explained in a webinar that“Asset gifts remind us of our wealth.”
  • When working with DAF holders, try to leverage the personal connection. Memorial gifts and gifts to friends and family in charity events are popular and maybe a way to engage the DAF holder.

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