Donor-advised funds (DAFs) have emerged as essential vehicles for philanthropy, facilitating nearly $55 billion in grants to charity in 2023 alone. They offer donors flexibility, ease of use, and accessibility, enabling significant positive impacts on communities nationwide.
Analysis of forty large community foundations and ten of the largest national DAF sponsors (by assets) reveals varied payout rates, with community foundations averaging 17.1 percent and national sponsors averaging 25.4 percent over a three-year period. These rates align closely with voluntary industry benchmarks, demonstrating robust grantmaking.
The data reveal a majority of foundations had average flow rates between 50 and 109 percent, while one in four had average flow rates between 90 and 109 percent.
Among large national DAF sponsors, median account balances are relatively small. On average these accounts are typically around $20,000, while the vast majority are smaller than $250,000.
This analysis covers sponsors holding 89 percent of DAF accounts. Among those, 100 percent enforce stringent and well-defined inactivity policies. Inactivity policies and guidelines ensure responsible fund usage and engagement within the philanthropic ecosystem.
DAFs are widely accessible, with many community foundations and national sponsors often having no or low minimum contribution requirements.
As DAFs continue to evolve and grow, understanding current trends and practices is vital for informed discussions about how donors use these vehicles to drive meaningful change in communities around the country.
Real-life examples showcase the transformative potential of DAFs, from supporting health-related causes to aiding those affected by crises like Hurricane Helene in North Carolina.
