Contributions to donor-advised funds increased more than 14 percent on a year-over-year basis in 2014, while the number of grants awarded from DAFs jumped 27 percent, a report from the finds.
Based on an analysis of data from more than a thousand charitable organizations that administer DAFs, NPT's 2015 Donor-Advised Fund Report (20 pages, or ) found that grants from DAF accounts totaled an estimated $12.5 billion in 2014, up from $9.8 billion in 2013. At the same time, contributions to DAFs totaled a record $19.7 billion, accounting for 7.6 percent of individual giving in the United States, while total assets managed by DAFs grew 23.9 percent, to $70.7 billion, continuing a string of year-over-year double-digit increases that began in 2010.
The analysis also found that the number of DAFs increased 8.8 percent on a year-over-year basis in 2014, while the number of private foundations increased 3 percent and other giving vehicles saw negative growth. In addition, the average DAF account size reached $296,701, up 13.7 percent from the previous year. National charities and organizations affiliated with financial institutions accounted for the largest share of DAF accounts in 2014 (128,195, up 13.1 percent), contributions ($9.7 billion), grants awarded ($5.5 billion), and assets ($11.9 billion), followed by community foundations and single-issue charities.
According to the report, gifts to DAFs of illiquid assets such as real estate, art collections, and limited partnerships are expected to increase in popularity. When donated to a private foundation, illiquid assets are eligible for a deduction equal only to the cost of purchase, Eileen Heisman, CEO of NPT and author of the report, told the , while gifts of such assets to a donor-advised fund account are eligible for a deduction equal to their fair-market value. "The impetus is coming out of donors, charities, and advisors," said Heisman. "I think the [increased contribution of] illiquid assets is being fueled by all three areas."