Fidelity Charitable releases first-time report on donor activity

Offers Insight into DAF Donors' Giving, Approach to Philanthropy

BOSTON, June 10, 2013 — A new report offers the first detailed view into the demographics and giving patterns of more than 94,000 individuals who advise on donor-advised funds at Fidelity Charitable, an independent public charity that operates a national donor-advised fund (DAF) program. While the organization's donor base is diverse — hailing from all 50 states and ranging in age from under 25 to over 95 — a picture of the typical donor emerges as a mature individual living in a major metropolitan area who actively supports philanthropic causes.

“Our donors are active and engaged supporters of philanthropy,” said Sarah Libbey, president of Fidelity Charitable. “A key driver behind releasing the Fidelity Charitable Giving Report is to provide the nonprofit organizations we support with an inside look at how these donors approach philanthropy. That insight can help them tap the growing popularity of DAFs.”

DAFs Averaged Seven Outgoing Grants in 2012

The Fidelity Charitable Giving Report shows that with more than 57,000 Giving Accounts®, many of which have more than one individual with advisory privileges, Fidelity Charitable's donors have a wide range of philanthropic priorities, personal styles, and time horizons. The common thread is that their donor-advised funds help them make more of a difference to the causes that matter to them.

To provide insight into how donors use their accounts over time, one dataset reviewed is Giving Accounts established prior to 2007. In this dataset, nearly 22 percent of donors recommended grants totaling almost the entire balance of their account, leaving a balance of $200 or less, by the end of 2012. Of the remaining 78 percent of donors, 70 percent recommended grants in at least five of the past seven years and the other 30 percent still actively supported their favorite charities, recommending grants amounting to 69 percent of their total contributions by year-end 2012.

In 2012, the average number of grants per Giving Account continued a steady rise, reaching nearly seven grants per year. The average grant size was $3,773, though more than $900 million was granted in amounts of $50,000 or more.

“Ready Reserves” Help Donors Maintain Their Charitable Giving Patterns

Over the past decade, the total volume of grants has grown each year, nearly tripling from 154,000 in 2003 to 429,000 in 2012. Even during the worst years of the financial crisis (2008-2009), there was still a slight increase in grant volume and over $1 billion was granted out each year. The consistent number of outgoing grants through the financial crisis demonstrates that donors use their accounts as a “ready reserve” of funds to maintain their charitable impact during challenging economic times.

The number of scheduled grant recommendations — grants recommended in advance and/or recommended for distribution on a recurring basis — has risen at an even faster clip than overall grants, showing donors' planned-giving approach. In 2012, scheduled grant recommendations accounted for 21 percent of all grants, up from 17 percent in 2008.

Smaller Accounts Strongly Support Religion; Education a Favorite for Larger Accounts

While donors support a wide range of nonprofits — Fidelity Charitable has made grants to more than 160,000 public charities — one trend the majority follow is supporting charities close to home. Fifty-seven percent of grants are made to nonprofits in the primary account holder's home state.

By sector, religious organizations accounted for the largest proportion of grants made at 27 percent, but education attracted the largest proportion of grant dollars at 26 percent in 2012.

When Giving Accounts are analyzed by size, the proportion of grants made to religious organizations decreases dramatically as the size of the account increases. The proportion of grants to nonprofit organizations in the education, human services, society benefit, and health shows the opposite trend, increasing as the account size grows. Grants to three sectors — environment and animals, arts and culture, and international affairs — are steady regardless of account size.

Donors Most Often Establish DAFs in Their 50s; Many Use Account for Over a Decade

The average primary account holder is 62 years old and sets up an account at 54, likely attributable to the mid-50s being the age at which people tend to begin to approach charitable giving and legacy planning in a more thoughtful and forward-looking manner.

Donors often use a donor-advised fund to facilitate their giving over a period of many years. Forty percent of donors have maintained a Giving Account for more than 10 years and more than 13 percent have had an account at least 15 years.

“The flexibility of donor-advised funds appeals to a wide range of people, but most gravitate to a DAF because of their desire to be thoughtful and systematic about their giving,” said Libbey. “This strategic approach benefits the philanthropic sector because it often means donors can support their favorite causes consistently over time.”

About Fidelity Charitable

Fidelity Charitable is an independent public charity that has helped donors support more than 160,000 nonprofit organizations with over $14 billion in grants. Established in 1991, Fidelity Charitable launched the first national donor-advised fund program. The mission of the organization is to further the American tradition of philanthropy by providing programs that make charitable giving simple and effective.

Fidelity Charitable is the brand name for the Fidelity® Charitable Gift Fund, an independent public charity with a donor-advised fund program. Various Fidelity companies provide services to Fidelity Charitable. The Fidelity Charitable name and logo and Fidelity are registered service marks of FMR LLC, used by Fidelity Charitable under license. Giving Account® is a registered service mark of the Trustees of Fidelity Charitable.

Information provided is general and educational in nature, and should not be construed as legal or tax advice. Fidelity Charitable does not provide legal or tax advice. Content provided relates to taxation at the federal level only, and availability of certain federal income tax deductions may depend on whether you itemize deductions. Rules and regulations regarding tax deductions for charitable giving vary at the state level, and laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy or completeness of the information provided. Charitable contributions of capital gain property held for more than one year are usually deductible at fair market value. Deductions for capital gain property held for one year or less are usually limited to cost basis. Consult an attorney or tax advisor regarding your specific legal or tax situation.

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