Despite the challenges posed by inflation, donor-advised funds (DAFs) demonstrated their enduring role as a cornerstone of American philanthropy in 2023. The 2024 Donor-Advised Fund Report by the National Philanthropic Trust (NPT) offers a nuanced view of the sector’s performance during a challenging year, underscoring its adaptability and continued capacity to support nonprofit organizations.
Grants from DAFs totaled $54.77 billion in 2023, a slight decline from the previous year’s record-breaking $55.53 billion. This marks only the second drop in annual grantmaking since NPT began tracking data in 2007. However, the significance of this figure cannot be overstated—it represents the second-highest annual total on record and nearly double the pre-pandemic grantmaking levels of 2019.
Contributions to DAFs saw a more pronounced decline, falling to $59.43 billion. This drop contrasts with the extraordinary surge in contributions during 2021, suggesting a reversion to historical growth trends.
The DAF payout rate remained robust at nearly 24%, consistent with its long-standing pattern of exceeding 20% annually. This is a testament to donors’ ongoing commitment to deploying resources to meet immediate needs. Moreover, the compound annual growth rate for grants over the past five years stood at an impressive 17.8%, highlighting sustained growth in charitable distributions.
These trends underscore the resilience of DAFs and their donors in navigating fluctuating economic conditions while maintaining steadfast support for nonprofits. Even in a year marked by declining contributions, DAFs continued to demonstrate their pivotal role in advancing philanthropic goals and adapting to shifting societal needs.
As NPT President and CEO Holly Stubbing notes:
“It is clear to me—in practice and underscored by this data—that DAFs help stabilize the philanthropic ecosystem. DAF donors are influenced by the same forces that affect overall giving patterns, be it economic, political or social. Yet DAF donors remain remarkably consistent in their grantmaking, providing critical operating support for nonprofit organizations around the globe.”
With over $54 billion in grants distributed, donor-advised funds remain an indispensable tool for generous Americans, empowering them to support diverse causes with flexibility and impact. As the sector matures, its enduring growth and consistent payout rates affirm the vitality of this innovative giving vehicle in driving meaningful change.
