As the new administration rolls out its ambitious efforts to rein in out-of-control government spending, a new report illustrates the crucial role of private philanthropy in tackling social problems.
Our latest report, Donor-Advised Funds: Payout Trends, Inactivity Policies and Accessibility, dives deep into how one giving tool, DAFs, is shaping the future of philanthropy. In today’s philanthropic landscape, DAFs have emerged as one of the most effective and accessible tools for private charitable giving. Offering donors unmatched flexibility and convenience, DAFs have facilitated billions of dollars in grants, driving transformative change across communities nationwide.
A Growing Force in Philanthropy
In 2023 alone, $55 billion in grants were distributed from DAFs, a testament to their growing popularity and impact. Charitable giving through DAFs has nearly doubled over the last five years, underscoring their critical role empowering donors to support meaningful causes.
The flexibility of DAFs allows donors to align their giving with personal timelines and strategic objectives. Whether contributing immediately or saving for larger, more impactful grants, DAFs cater to a wide range of philanthropic goals. This strategic approach ensures that donors can sustain long-term support for causes they care about.
What the Data Tell Us
Our report analyzes data from 40 large community foundations and the 10 largest national DAF sponsors, representing 76% of DAF grantmaking and 79% of DAF assets in 2022. The findings reveal key trends:
- High Payout Rates: Community foundations averaged a 17.1% payout rate over three years, while national sponsors averaged 25.4%. These figures exceed voluntary industry benchmarks and highlight robust grantmaking practices.
- Broad Accessibility: DAFs are widely accessible, with many sponsors requiring no or low minimum contributions to open an account. Median account balances are relatively modest, averaging around $20,000, which further demonstrates their accessibility to donors of varying financial capacities.
- Strong Inactivity Policies: Every sponsor analyzed enforces stringent inactivity policies, ensuring funds are responsibly managed and remain engaged in the philanthropic ecosystem.
These findings demonstrate that donors are actively and generously giving, with many DAFs showing payout rates well above expectations.
Dispelling the Myths Around DAFs
Critics of DAFs often focus on payout rates, arguing they are too low to effectively serve communities in need. However, this criticism overlooks the purpose and design of DAFs. Unlike private foundations, which are required to meet specific annual payout thresholds, DAFs allow donors to adopt a personalized and strategic approach to giving.
For some, this may mean saving for large-scale initiatives that require significant funding, while for others, it could involve immediate grants to respond to crises or support ongoing programs. In fact, our report highlights inspiring examples of how DAFs have been used to support medical research, foster youth programs and provide critical aid during emergencies such as the hurricane that devastated North Carolina in 2024.
Why DAFs Are Here to Stay
The growing adoption of DAFs reflects their ability to empower individuals to make a meaningful impact. With more than 428,000 DAF accounts collectively managing $179.1 billion in private sector assets, these funds represent a significant and evolving force in philanthropy. Their accessibility, flexibility and strategic potential make them a preferred giving vehicle for millions of Americans.
The report also highlights how sponsors have embraced innovative practices to address concerns around inactivity and fund utilization. By implementing clear policies and encouraging active engagement, DAF sponsors ensure that charitable dollars are put to work in impactful ways.
A Brighter Philanthropic Future
Donor-advised funds are not just vehicles for giving—they are tools for individuals to transform society and advance donors’ values. By enabling donors to support causes on their terms, DAFs foster a philanthropic environment that is strategic and impactful. As DAFs continue to grow and evolve, they will remain a cornerstone of charitable giving, empowering individuals to drive meaningful change and build stronger communities.
To learn more about the trends, practices and real-world impact of DAFs, read our full report, Donor-Advised Funds: Payout Trends, Inactivity Policies and Accessibility. Together, we can advance the conversation around philanthropy and celebrate the vital role DAFs play in shaping a better future.
