The DAF Research Collaborative Releases Independent National Study on Donor-Advised Funds

Credit: DAF Research Collaborative

The Donor Advised Fund Research Collaborative (DAFRC) has released a comprehensive study that improves the public understanding of donor advised funds and answers some of the field’s most pressing questions surrounding this relatively new giving vehicle.

The 2024 National Study on Donor Advised Funds is the largest independent study on donor advised funds to date, encompassing nine years of data and details on more than 50,000 accounts.

The full report is available here.

The 2024 National Study on Donor Advised Funds includes information about DAFs from 2014 to 2022, covering account size, age, type, succession plan, donor demographics, contributions, grants, payout rates and grantmaking speed. To help complete this study, 111 DAF programs voluntarily provided anonymized data to the research team, representing over 600,000 inbound contributions to DAFS and more than 2.25 million outbound grants from DAFs.

“The National Study on Donor Advised Funds is an essential early step in continuing to improve the practice and understanding of DAFs for the future,” said Dan Heist, Principal Investigator for the DAFRC and Assistant Professor at Brigham Young University.

“DAFs make it easier for everyday donors to give in ways that are meaningful to them, so the exponential growth of DAFs we’ve seen in the last few years is likely going to continue. It is important that the philanthropic community has a solid evidence base to maximize this important giving vehicle.” said Danielle Vance-McMullen, Principal Investigator for the DAFRC and Assistant Professor at DePaul University

WHY THIS MATTERS: 
The data and findings presented in this report help to answer many of the field’s most critical questions about DAFs—while highlighting the importance of obtaining and utilizing good data to inform the practice of philanthropy through DAFs and the public discourse around DAFs.

DAFs are easier and less costly to establish and maintain than other philanthropic vehicles, making it easier for everyday Americans to be charitable and give in ways meaningful to them.

The National Study on DAFs provides new insights into the three most common types of DAF sponsors: Nationals, Community Foundations, and Religiously-Affiliated Organizations.

DIVING DEEPER INTO KEY FINDINGS:

• Nearly half of all DAFs (49%) had total assets at the end of 2021 of less than $50,000.
  • Only 7% of DAFs had balances of $1 million or more
  • Only 1% had a balance over $10 million.
• DAFs are a relatively young philanthropic vehicle, with increased use in recent years (81% of DAF accounts in the study were opened after 2010).
• Most DAF accounts (97%) were advised by individuals or families. Organizations advised only 3% of DAFs in the study.
• Members of the Baby Boomer generation represented nearly half (49%) of all advisors.
• Almost all DAFs (92%) have a succession plan in place that establishes what organization or advisors receive control of the funds after the original donors are no longer living.
  • Approximately 30% of DAFs designate the sponsor or another nonprofit organization to receive the remaining funds.
• Approximately 61% of all DAFs had multiple contributions into the DAF during the study period.
  • One in nine had contributions every year.
• DAFs are a mid-range philanthropic vehicle option for donors.
  • DAFs commonly received contributions between $10,000 and $49,999.  About 40% of contributions were in this range.
• In the most recent three-year period, 78% of accounts made at least one grant.
  • In an average year, nearly two-thirds of accounts (63%) made an outbound grant while over one-third (37%) did not.
• Grantmaking from DAFs is spread relatively evenly throughout the year—only 32% of grant funding occurs in the fourth quarter.
  • In contrast, the fourth quarter of the year accounts for 57% of all funds contributed into DAFs.
• Since DAF contributions and grants can fluctuate yearly, this study presents a three-year average to provide a more accurate depiction of each DAF account’s activity.
  • The median payout rate for all accounts is 9%. The median for all accounts that make grants (removing inactive accounts) is 15%. The mean (average) payout rate for all DAF accounts is 18%.
• Just over half of all DAFs (54%) granted out more than half of their original contribution within three years.
• Approximately 22% of DAFs were inactive or had a zero payout rate for the three most recent years included in the study (2020-2022).
  • When looking more closely at inactive DAFs, they were both smaller and newer (more recently established) than active DAFs. Almost half (45%) of inactive DAFs were opened in 2020 or later.

Source: The Donor Advised Fund Research Collaborative

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