Grants from donor-advised funds to qualified nonprofit organizations grew by 16.9% to a record $15.1 billion in 2016, according to National Philanthropic Trusts 11th annual DAF report.
Last year, total assets available for grant making increased to $85.2 billion, while contributions to DAF accounts grew to $23.3 billion.
DAFs, the report noted, continue to be the fastest-growing charitable giving vehicle in the U.S. with 284,965 individual accounts, a 6.9% increase from 2015.
"Donor-advised funds had another year of historic growth," NPT's president and chief executive Eileen Heisman said in a statement. "For the third year in a row, grant growth has outpaced contribution growth. Donors are actively using their DAFs to support charities domestically and around the globe after a period of extreme growth in DAF contributions and assets."
Heisman noted that the DAF payout rate remained higher than that of private foundations — 20.3% vs. 6.2%. "More than ever, donors are invested in their charitable impact, short and long-term, and are using DAFs to do it."
According to NPT, there were 83,276 private foundation in the U.S. in 2016, up from 81,483 in 2015. Foundation assets amounted to $753 billion, $24 billion more than in the previous year. Foundations granted $45 billion, compared with $44 billion in 2015.
The report said that the tax reform bill introduced in late 2017, if implemented, could reduce the tax benefits of giving to a DAF.
It predicted that as contributions slow, there will be a continued increase in grant making and a plateau in payout rates. Grants grew by 5.7% between 2015 and 2016, compared with a compound annual growth rate of 18.6% over the period 2012 through 2015.
