Biggest Donor-Advised-Fund Sponsors Report Surge in Grants

As the nonprofit world frets about the declining rate of individual contributions, two major donor-advised-fund sponsors have announced big increases in individual grant making.

Fidelity Charitable announced Monday that its account holders had issued $4 billion in grants since January, split among more than 105,000 charities. That’s an increase of 48 percent over the same period in the previous year.

Fidelity Charitable is the largest donor-advised-fund sponsor in the United States. In 2018, its accounts issued $5.2 billion in grants. If those accounts continue to make contributions at rates seen so far this year, they would easily exceed $5.2 billion by the end of 2019.

“When we hit the $4 billion milestone, we had never reached that milestone in such a short time,” said Fidelity Charitable spokeswoman Sophie Launay. “At a time when it’s been reported that individual contributions to charity have gone down, we just wanted to highlight that at Fidelity Charitable, we have not seen that.”

Similarly, Schwab Charitable, another commercial donor-advised-fund sponsor, announced last week its account holders had issued $2.4 billion in grants in its most recent fiscal year to more than 83,000 charities, an in-house record and a 33 percent increase over the previous fiscal year.

In both announcements, officials for Schwab and Fidelity highlighted the utility of “bunching” grants to individual donor-advised-fund accounts. Bunching or “bundling” is a practice some donors have adopted since the passage of the new federal tax rules in December 2017 in which they make larger-than-usual contributions one year and none in the next year or several years to maximize tax benefits for their charitable giving.