Donor-advised funds are frequently identified as one of the fastest-growing vehicles for charitable giving, but the question of where those donor-advised fund grant dollars go has remained largely unanswered until now. A new report is the first to uncover these answers. Among other findings, it identifies education, religion and public-society benefit organizations as the types of nonprofits that attracted the most donor-advised fund grant dollars, based on a sample of donor-advised fund sponsoring organizations from 2012 to 2015.
The just released Giving USA Special Report, The Data on Donor-Advised Funds: New Insights You Need to Know, was researched and written by the Indiana University Lilly Family School of Philanthropy at IUPUI with support from Giving USA Foundation™ and the Fidelity Charitable Trustees’ Initiative.
The Lilly Family School of Philanthropy analyzed granting data from a small number of organizations that represented roughly half of all granting dollars from donor-advised funds between 2012 and 2015. The school used IRS Schedule I data and also collected direct granting data from donor-advised fund sponsoring organizations for the sample. Subsector categories were assigned to the organizations that received grants using National Taxonomy of Exempt Entities (NTEE) codes, the same process used to identify contributions to subsectors in Giving USA: The Annual Report on Philanthropy.
Compared to the distribution of total U.S. giving as identified by Giving USA, grants from donor-advised funds give a greater share of their giving to education and less to religion.
Giving to education comprised 28 percent of giving from donor-advised funds from 2012 to 2015. For the same time period, giving to education in Giving USA comprised only 15 percent of total giving.
In contrast, grants to the religion subsector represented 14 percent of giving from the donor-advised fund sample, while giving to the religion subsector represented 32 percent of total giving in Giving USA.
The distribution patterns by donor-advised funds track more closely with the trends of high-net-worth donors, who tend to give a larger share of their giving to education than to religion, a trend that was echoed in the study.
“The data clearly identify education and religion organizations as the types of nonprofits that are most likely to attract grant dollars from donor-advised funds,” said Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy. “We need more data to discover how those trends may unfold over a longer period of time, especially as donors and nonprofits continue to learn about and explore the possibilities of donor-advised funds.”
The study found that granting patterns from donor-advised funds are relatively stable, with each different type of nonprofit receiving a similar percentage of total donor-advised fund giving from year to year.
The report also features new aggregate estimates for donor-advised fund assets, number of donor-advised fund accounts in the U.S., and total dollars contributed to donor-advised funds, finding strong growth in every category between 2008 and 2014. Other sections of the report include a focus on the history of donor-advised funds, costs and benefits, and the future of donor-advised funds in light of recent changes to tax policy.
The Giving Institute and Giving USA Foundation will host a free live webcast today – March 1, from 1:00-2:30 p.m. Central, where panelists will discuss the report. To register visit: https://gi.peachnewmedia.com/