More than $120 billion is currently sitting in donor-advised funds in this country. And that total has been growing rapidly over the past few years. With more donors concerned about the stability of their personal finances due to the COVID-19 crisis, will DAF donors step up and give more from those dollars they have already designated for charity?
Here’s some good news: many donors HAVE been giving more from their DAFs since the start of the COVID-19 crisis. Fidelity Charitable, one of the largest DAFs in the nation, saw the number of grants made from January 1 through May 5 grow by 31% compared to the prior year. And when Fidelity Charitable challenged their donors to contribute $200 million to COVID-19 relief on #GivingTuesdayNow (May 5), they exceeded their goal by millions.
Some individuals are also encouraging their fellow donors to do more. David and Jennifer Risher have offered to match up to $1 million in DAF grants—but only if the donors pledge to give away at least half the funds in their DAFs by September 30. The Rishers’ #HalfMyDAF campaign aims to get more dollars to work, faster. And for the nonprofits serving on the frontlines of the COVID-19 crisis, or facing severe financial shortfalls, those dollars can’t come soon enough.
Of course, the financial clout of DAFs still pales in comparison to that of foundations. The total assets of US foundations hit $1 TRILLION for the first time in recent years—and yet they are only required to pay out 5% of those assets each year. A movement to increase those payouts is growing—and being accelerated by the growing need.
Nine organizations in the philanthropy space are encouraging foundations to dramatically increase their grantmaking during the current crisis. And, nearly 300 donors and foundations signed a letter pressuring Congress to increase the payout requirement from 5% to 10% for three years and institute a temporary 10% payout requirement for DAFs as well.
The human need in this country and around the globe has increased astronomically over the past few months. Imagine the impact even a small portion of those DAF and foundation assets could have if it were instead put to work in hard-hit communities. There is simply no excuse for letting those dollars languish in a bank.