Tax Byte

Donor-Advised Funds Show Historic Growth in New Report

Are your clients thinking about Donor-Advised Funds (DAFs)? An interesting report dropped this week showing that grants from DAFs to qualified charities increased more than 60% in the past two years and over 400% in the last decade.

National Philanthropic Trust published its 2022 Donor-Advised Fund Report on November 15, which examines data from 995 charitable organizations that sponsor DAFS – one type of charitable giving vehicle. Those DAF-sponsored charitable organizations make up less than 0.07 percent of the estimated 1.43 million registered public charities in the U.S. under §501(c)(3).

The total number of individual DAF accounts in 2021 rose by 28 percent to 1,285,801. Contributions to DAFs in 2021 totaled $72.67 billion, which is an all-time high, surpassing the revised 2020 value of $49.58 billion and marking a 46.6 percent year-over-year increase.

California Audits DAF Sponsors

California’s Office of the Attorney General issued a report last month detailing its audit of DAF sponsors after a recent uproar about money from wealthy taxpayers’ foundations flowing into DAFs. The CA report, however, notes that private foundation distributions account for only 5.3% of all contributions received by DAFs.

America's #1 Federal Tax Update

Learn more about the tax advantages of DAF’s and when private foundations may be a better fit along with other related tax pro tips in America’s #1 2022 Federal Tax Update.


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