A few days ago, Vox PPLI (this blog) noted a new report from one of the largest Donor Advised Funds indicating that DAFs are successfully competing with private foundations, with the ultimate beneficiaries of increased contributions being charities. Now a new academic study reinforces the rising role and positive news about DAFs as a vehicle for charitable funding. As a new Axios article notes:
One of the perennial complaints about donor-advised funds — charitable giving vehicles that allow donors to front-load tax deductions without necessarily giving any money to charity — is that money tends to get tied up in them and never given away. … An important new paper from the DAF Research Collaborative suggests that worry might be overblown.
“The 2024 National Study on Donor Advised Funds” from the DAF Research Collaborative, “a consortium of academic and nonprofit researchers” which seeks to “enhance the public understanding of donor advised funds,” argues that one of common beliefs about DAFs is, at best, overblown. Key findings from the study can be found in its Executive Summary.
The new Study stems from “the collective efforts of 111 DAF programs that voluntarily provided anonymized data to the research team, the dataset covers nine years of activity from more than 50,000 accounts, with over 600,000 inbound contributions to DAFS and more than 2.25 million outbound grants from DAFs.” The dataset indicates that “Just over half of all DAFs (54%) granted out at least half of their original contribution within three years. After eight years, about three-fifths of all DAFs (58%) had granted out 100% of the original contribution.”
Vox PPLI 