BOSTON – The 2015 Fidelity Charitable® Giving Report—the organization’s third annual edition—offers new insight on the role of donor-advised funds amid other giving methods, such as direct giving and private foundations, and also analyzes the charitable giving approaches and patterns of the organization’s 119,472 donors. Fidelity Charitable is an independent public charity with a national donor-advised fund program.
Life Events, Desire to Increase Impact, Drive Donor-Advised Fund Use
Life events and philanthropic goals—both short- and long-term—often drive the use of donor-advised funds by charitably-inclined individuals, according to a survey of 1,042 Fidelity Charitable donors. Donors said they use a donor-advised fund to:
- Sustain giving in retirement (62 percent).
- Capitalize on a wealth event, such as a financial windfall (27 percent) or year-end bonus (24 percent), to do good.
A desire to increase their charitable impact also fuels donors’ interest in donor-advised funds. Features donors said influenced their use of donor-advised funds included the ability to:
- Enable more money to go to charity by leveraging tax benefits, such as those associated with giving long-term appreciated assets (73 percent).
- Grow charitable dollars with tax-free investment options (76 percent). Fidelity Charitable has made an additional $3.6 billion1 available for grant-making through investment growth since its inception in 1991.
- Take time to research the charitable causes and organizations they want to support (68 percent).
"Dedicated charitable accounts help donors take a thoughtful and impactful approach to their philanthropy," said Amy Danforth, president of Fidelity Charitable. "With a low minimum to entry relative to other charitable planning vehicles and a highly sophisticated program, we are enabling donors across the giving spectrum―our median balance is about $16,000―to create more money for the charitable causes they care about and sustain their giving into retirement."
Grants Accelerate, but Most Popular Grantees Remain Consistent
As the amount granted by Fidelity Charitable at the recommendation of its donors has tripled in the last decade to nearly $2.6 billion in 2014, the organization has become the nation’s second-largest grant-maker, behind only the Bill & Melinda Gates Foundation.2 The number of charities supported by grants has doubled over the last decade to more than 97,000 last year, but the most popular charities―household names such as Doctors Without Borders, The Salvation Army, and American National Red Cross―have remained relatively consistent.
While Doctors Without Borders has always been popular among donors, in 2014 it became the charity supported by the most donor-advised funds for the first time. Grant recommendations for Ebola relief efforts likely helped fuel this movement.
Average activity within individual donor-advised funds has risen significantly over the past decade, with donors recommending eight grants on average in 2014, up from five in 2005. The percentage of pre-scheduled grant recommendations has also risen as more donors take advantage of the ability to plan their giving by recommending grants months and even years ahead of time. In 2014, 23 percent of grants were from pre-scheduled recommendations, up from eight percent in 2005.
Donors Use Multiple Methods to Support Charities
Nearly all donor-advised fund donors also use other giving methods, such as direct giving (91 percent), community foundations (9 percent), and private foundations (6 percent), according to the survey.
Donors employ the various giving methods they use for different reasons. For example, most donors who engage in planned giving activities, such as large donations, philanthropic advice, and recurring gifts, prefer to use a donor-advised fund for those activities. Donors who engage in casual donations, such as small gifts, responding to donation requests from family or friends, and supporting an individual in need, prefer to give directly with cash or cash equivalents in those situations. (View the chart.)
On average, donors report using a donor-advised fund for about two-thirds of their household’s charitable giving.
Most Advisor, Donor Conversations Scratch the Surface on Giving
Of the donors who have an advisor such as a financial advisor, attorney or accountant, 83 percent have discussed charitable giving with the advisor(s). According to donors, these charitable planning conversations were primarily focused on giving methods (87 percent) and tax benefits (84 percent).
"Most donors are financially and emotionally invested in philanthropy throughout their lifetime," said Chris Carnal, head of fundraising for Fidelity Charitable. "There is an opportunity for advisors to more deeply engage with their clients by expanding their conversations to include clients’ motivations for giving, their long-term giving goals, and how they would like to involve family in their philanthropy."
For the complete 2015 Fidelity Charitable Giving Report and to download graphics from the report, visit www.fidelitycharitable.org/giving-report.
About Fidelity Charitable
Fidelity Charitable is an independent public charity that has helped donors support more than 190,000 nonprofit organizations with more than $19 billion in grants. Established in 1991, Fidelity Charitable launched the first national donor-advised fund program. The mission of the organization is to further the American tradition of philanthropy by providing programs that make charitable giving simple and effective. For more information about Fidelity Charitable, visit http://www.fidelitycharitable.org.