What do the new Giving USA statistics mean for donor-advised funds?

Last week, when Giving USA released its annual statistical report on charitable giving, it was hard to ignore the impact of donor-advised funds. One of the most significant numbers in the report is the 6.2% increase in public-society benefit organizations. Giving USA attributed this increase to “the growth in giving of appreciated assets to donor-advised funds, especially from high-net-worth donors who see advantages of giving to these funds over giving to private foundations.”

The number of new donor-advised fund accounts has steadily increased in recent years, despite a recessionary period in the U.S. economy. If this trend continues—and I expect it will, given the new Giving USA data that overall charitable giving has increased for the first time in two years—donor-advised funds are poised to experience even more growth.

In a recent public discussion, analysts who assisted with the Giving USA report mentioned that next year, donor-advised funds may get their own piece of the Giving USA pie chart. Right now, DAFs are combined with other public charities, but separate from private foundations.

After nearly 25 years of working with donor-advised funds, I can say that they are at the tipping point. NPT’s own 2010 Donor-Advised Fund Report supports the data that donor-advised funds are increasing at a rate faster than any other giving vehicle. Last year, we found that donor-advised funds now outnumber private foundations by nearly two to one. I am optimistic about both the continued growth of donor-advised funds and their growing impact on charitable giving as a whole.