As the spread of Covid-19 upended life across the globe, donors increased the amount they provided from their donor-advised funds by nearly 30 percent to $8.3 billion over the first six months of 2020 compared with the same period in 2019, according to a new report from the National Philanthropic Trust.
The 2020 figure comes from organizations that typically account for half of the total outgoing donor-advised-fund charitable grant dollars issued annually so the National Philanthropic Trust said it was a good gauge of how the rest of the funds responded. The donor-advised-fund world is so lopsided that just 13 organizations provide half the money.
The 30 percent year-over-year jump pushed their total estimated disbursements in the first half of 2020 to $8.3 billion, up from $6.4 billion during the same period the year before. Eileen Heisman, CEO of the National Philanthropic Trust, said the increases seen in the first half of 2020 show donor-advised-fund account holders rapidly responding to community needs underscored by the pandemic.
“Because of Covid and the images and the stories and the seclusion in our homes and wanting to get a vaccine, and seeing your favorite charities not be able to function or hold fundraisers, really moved people to give in ways that amped these numbers tremendously,” said Heisman. “People really stepped up.”
Officials at Fidelity Charitable said they saw similar numbers across the first half of the year. Fidelity said grant making in the first four months of 2020 grew 28 percent, a trend that maintained through the final two months of the first half of the year, said Stephen Austin, spokesman for Fidelity Charitable.
Austin said the increase is at least partially attributable to new donor-outreach efforts Fidelity Charitable undertook, unprecedented for the organization, as the severity of the pandemic became clear. In April, for instance, the group announced a campaign to encourage its donors to give $100 million to Covid relief charities by May.
“Clearly the pandemic was the most important cause they cared about in 2020,” said Austin.
Big Boost for Human Services
According to the survey, the total number of grants from donor-advised funds in 2020 increased by more than 37 percent in the first six months of the year, from roughly 945,000 to nearly 1.3 million. Grant dollars received by charities from donor-advised funds increased across every category of nonprofit except one in the first half of last year.
The biggest increase was directed to human-service nonprofits, which saw grant dollars increase by 79 percent over the first six months of 2020 over 2019, up from roughly $660 million to $1.2 billion. Health nonprofits also received a ,,healthy increase in grant dollars from donor-advised funds, jumping 52 percent from $470 million to $720 million, with the average grant amount for these charities rising by 18.7 percent.
Arts and culture nonprofits, on the other hand, saw total grant dollars from donor-advised funds decrease slightly from $520 million in the first six months of 2019 to $470 million in the first six months of 2020, despite the number of donor-advised-fund donations to such groups increasing from 69,310 to 89,030 in that same period.
Heisman said the figures for arts support show “the struggle that they’re going through and the resourcefulness they need to stay alive.” She added: “The diehard supporters were staying in, and I think a lot went out for emergency funding because you saw a greater number of grants but with smaller dollar amounts.”
Big Gains in 2019, Too
The big gains in the first six months of 2020 were preceded by gains in 2019 as well. For that year, the report analyzed data from 1,087 donor-advised-fund sponsors. Charitable assets grew 16.2 percent compared with 2018, increasing from $122.2 billion to nearly $142 billion. Grants from donor-advised funds increased similarly, growing 15.4 percent from $23.7 billion to $27.4 billion from 2018 to 2019.
Contributions to donor-advised funds increased by 7.5 percent from $36.1 billion in 2018 to $38.8 billion in 2019. Based on Giving USA’s annual report on charitable donations, the $38.8 billion is equivalent to 12.7 percent of individual U.S. charitable giving that year, roughly $309.6 billion.
At the same time, the number of donor-advised-fund accounts grew by 19.4 percent in 2019, from 731,607 the year before to 873,228 the following year. The growth was driven by an increase in the number of “micro-donor-advised funds” that have become popular with companies offering employees a way to give and match their donations. Six fund sponsors reported adding more than 1,000 new accounts each in 2019. As a result, the average fund size at donor-advised fund sponsors decreased 2.7 percent from $167,000 in 2018 to $161,560 in 2019.
