Charitable granting at Schwab Charitable and Fidelity Charitable continues to set records, according to new reports from the two providers of donor-advised funds.
Schwab Charitable said it had facilitated $2.4 billion in grants to some 83,000 charities during fiscal year 2019, ended June 30, a 33% increase in dollars granted and a 26% increase in the number of grants.
For the year through July 19, Fidelity Charitable reported that its donors have recommended $4 billion in grants, a 48% increase over the same period last year.
Schwab Charitable: 20th Anniversary
"Over an incredible 20-year span of growing generosity, our donors have recommended a total of more than $12.5 billion in grants to 150,000 charities," Schwab Charitable's president, Kim Laughton, said in a statement.
"Thanks to strong market performance over the majority of the last 12 months and a growing familiarity with the relatively new tax law, donors found the 2019 fiscal year to be an especially good time to give."
In fiscal 2019, two-thirds of contributions to Schwab Charitable were noncash assets, including publicly traded securities, restricted stock, real estate and privately held business interests, which were the most popular, according to the report.
And more than a year after the tax overhaul, some donors realized that they could benefit from "bunching" or concentrating their charitable contributions, including contributions of appreciated noncash assets.
Individuals who do this contribute to their DAFs in higher income years and then recommend grants to charities of their choice over time. This enables them to itemize charitable deductions in some years and benefit from the increased standard deduction in other years.
Schwab Charitable donors span all generations. In fiscal 2019, older generations generally gave more with greater frequency, according to the report:
- Greatest Generation (born before 1946): recommended an average of 12 grants, each averaging $12,000, to eight charities
- Boomers: average of 10 grants, average value of $5,000, to seven charities
- Gen X: average of seven grants, average value of $7,000, to five charities
- Millennials: average of six grants, average value of $4,000, to three charities
Schwab Charitable reported that 72% of DAF account assets were associated with a professional investment advisor. In fiscal 2019, donors with advised accounts recommended an average of 11 grants to charities.
Financial advisors are well-suited to help donors give with greater impact, according to the report. They can help identify appreciated assets that would make tax-efficient charitable gifts. And they can offer personalized giving strategies that may maximize tax efficiency under the new law.
