JUST RELEASED: Special Report, The Data on Donor-Advised Funds: New Insights You Need to Know

GUSA Special Report on Donor-Advised FundsWhere do donor-advised fund grants go?

Education and religion attract the most dollars, Special Report on Donor-Advised Funds from Giving USA Foundation™ and Indiana University Lilly Family School of Philanthropy finds

CHICAGO—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 Giving USA Special Report, The Data on Donor-Advised Funds: New Insights You Need to Know, released on February 28, 2018, 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 Fidelity Charitable Trustees’ Initiative is a grantmaking program overseen by the trustees of Fidelity Charitable with a focus on increasing knowledge, information and resources that donors and nonprofits need to achieve their intended impact.

The report presents new and important information about grants from donor-advised funds that financial advisors, nonprofit professionals including fundraisers, and philanthropists can learn from and apply.

“Despite the growth in donor-advised funds in recent years, there has been little quantitative research on where the dollars go. The findings of this report can help demystify this important vehicle for charitable giving, including offering a clear comparison between how donor-advised funds’ granting patterns compare with the distribution of all types of charitable giving in Giving USA,” said Aggie Sweeney, CFRE, Chair of Giving USA Foundation.

“This report offers insight into the granting patterns of donor-advised funds,” said Amir Pasic, Ph.D., the Eugene R. Tempel Dean of the school. “At a time when there are more questions than ever about how the growth of donor-advised funds is changing the field of philanthropy, this new, quantitative research offers some much-needed perspective.”

The report is based on original research by the Lilly Family School of Philanthropy. The school 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.

“In addition to the unique research findings, this report offers important history and context to help stakeholders better understand the landscape of donor-advised funds,” said Keith Curtis, Immediate Past Chair of Giving USA Foundation and president of The Curtis Group, a fundraising consultancy. “This report will help readers develop their organizations’ strategy for how they can work most effectively with donor-advised funds.”

Granting patterns from donor-advised funds are often difficult to track, in part because there is no single source of data that can be used to identify them. Although IRS Form 990 Schedule I requires organizations that house donor-advised funds to record granting data, the grants from donor-advised funds are not separated from other grants the organization makes, so studies must work with individual donor-advised fund sponsors to get accurate data that tracks the grants solely from donor-advised funds. In addition, there are other issues associated with Schedule I data, including that the forms may not be available in machine-readable format, meaning someone would have to enter granting data by hand.

Expert Panelists to Discuss Special Report during Live Webcast on March 1

The Giving Institute and Giving USA Foundation hosted a live webcast on Thursday, March 1, from 1:00-2:30 p.m. Central, where expert panelists discussed the new Giving USA Special Report The Data on Donor-Advised Funds: New Insights You Need to Know. During the free webcast, attendees asked their most pressing questions about donor-advised funds and how to incorporate this giving vehicle into their fundraising plans. View the free recording here.

About Giving USA Foundation

Advancing the research, education and public understanding of philanthropy is the mission of Giving USA Foundation, founded in 1985 by The Giving Institute. Headquartered in Chicago, the Foundation publishes data and trends about charitable giving through its seminal publication, Giving USA, and quarterly reports on topics related to philanthropy. Published since 1956, Giving USA is the longest running, most comprehensive report on philanthropy in America. Giving USA 2017: The Annual Report on Philanthropy for the Year 2016 is available now at www.GivingUSA.org. Giving USA 2018: The Annual Report on Philanthropy for the Year 2017 will be available on June 12, 2018. Read more about Giving USA Foundation’s history, as well as the history of Giving USA and philanthropy in the U.S. in the Giving USA 2015 Spotlight: Celebrating Service to Philanthropy (available as a free download on www.GivingUSA.org).

About the Indiana University Lilly Family School of Philanthropy

The Lilly Family School of Philanthropy at IUPUI is dedicated to improving philanthropy to improve the world by training and empowering students and professionals to be innovators and leaders who create positive and lasting change. The school offers a comprehensive approach to philanthropy through its academic, research and international programs and through The Fund Raising School, the Lake Institute on Faith & Giving and the Women’s Philanthropy Institute. Follow us on Twitter @IUPhilanthropy and “Like” us on Facebook.

The Giving USA Special Report on The Data on Donor-Advised Funds: New Insights You Need to Know is available for $24.95 in digital PDF format or as a paperback book (with digital download) for $29.95.