Contributions to Donor Advised Funds

The National Philanthropic Trust (NPT), the largest U.S. donor-advised fund (DAF) sponsor, has some good news about grants to not-for-profits from Donor-Advised Funds (DAFs). It reports a 39% increase in the dollar amount of such grants made from its sponsored funds in fiscal year 2019, for a total of $1.39 billion. That represents a 28% increase in the number of grants made over the previous year. The jump aligns with reports from other DAF sponsors. Fidelity, for example, reported a 48% increase in grant making from DAFs in the first half of 2019. And Schwab said it experienced a 33% increase in the dollars granted from DAFs in fiscal 2018.

Various factors could contribute to this trend, but most notably the changes in the tax reform have contributed to the increase. The tax reform has created scenarios where donors have a tax advantage to make a one-time contribution to a DAF and in subsequent years determine exactly where those funds will go, while receiving the full deduction in the year the contribution is made to the DAF.

Related Read: “Deduct Now, Donate Later: Donor-Advised Funds Offer Significant Benefits

What does this mean going forward? It is difficult to say. If the main factor contributing to the increase is the tax reform, there would likely be an expectation to see contributions to DAFs in 2020 decrease from 2019. However, many donors may not have been aware of this strategy in 2019 and are now interested in making a DAF contribution in 2020 as they learn the advantages and disadvantages.

Where Is Your Fundraising Professional Going?

More than half of not-for-profit fundraisers plan to leave their current jobs in the next two years, according to a new survey commissioned by the Chronicle of Philanthropy and the Association of Fundraising Professionals. The survey questioned more than 1,000 fundraisers in the United States and Canada.

Reasons for the turnover include unrealistic expectations that are set by not-for-profits and lack of salary goals being met for the fundraising professional. From the survey, 30% indicate they have recently left or plan to leave the development field entirely in the next two years; 5% of the survey respondents had already left fundraising. Only 12% say they plan to retire or have other personal reasons for leaving.

With the new tax reform not-for-profits are still trying to determine how exactly they are being affected. This increases the importance of a development specialist to review the success of the not-for-profit and determine where the market really exists for donors. It is important to understand how the not-for-profit's donors have changed their strategy and then ultimately how the organization can adjust its development strategy to achieve its ultimate fundraising goals.

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