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11.27.23
The recently released National Philanthropic Trust's (NPT) 2023 DAF Report should be of interest to not-for-profit organization CFOs and development leaders throughout the U.S. According to the report, grants from donor-advised funds (DAFs) to charities exceeded $52 billion in 2022, a record high despite a challenging year for financial markets. This marks the 13th straight year of growth in DAFs. The report serves as a good reminder to not-for-profits leaders to become more aware of established DAFs among their donor bases.
The 17th annual report from NPT, which is the largest national, independent public charity that manages DAFs, examined data from 1,151 charitable organizations that sponsored DAFs, including national charities, community foundations and other sponsoring charities. According to the report, in 2022, DAFs granted 22.5% of their assets from the previous year.
Donor-advised funds are accounts held within a sponsoring 501c(3) organization in which a donor-advisor contributes funds within a sponsoring organization. Donors receive an immediate tax deduction through their charitable contributions while still retaining recommending powers for grants from the DAF. Not-for-profits can benefit from alignment with donors who have such recommending powers — not only can these donors often make larger gifts, given that DAFs regularly accumulate significant resources based on tax planning moves by donors, but also because of the tax-free growth that can occur in a DAF.
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