Recap of the 2024 National Study on Donor Advised Funds

The DAF Research Collaborative recently published the 2024 National Study on Donor Advised Funds, their largest study to date. Co-authors H. Daniel Heist, Danielle Vance-Mullen, Brittany Kienker and Jeff Williams operate in various areas of the DAF universe including higher education and consulting. Using data from 2014-2022, the report received responses from more than 100 DAF sponsors and 50,000 accounts, analyzing 600,000 contributions to DAFs and 2.25 million grants from DAFs to recipient non-profits. This comprehensive report is a goldmine of data for those of us in the DAF sphere! Here are some important points:

Who participated in the study?

The 100+ respondents of the study were from the three most common sponsor organizations (national, community and religiously-affiliated).

Per the authors, national sponsors with low or no-minimum opening contributions were not well represented in the study, so funds which are mentioned in the report are likely those with higher minimum opening contributions. Other types of funds, such as social impact investing, international, workplace or complex asset funds were not included.

Who are the donors?

The funds are almost entirely advised by individuals or families- the Baby Boomer generation (age 55-80) make up nearly half of the advisors.

Almost all of them have succession plans in place.  The majority of funds named family as successors, rather than the sponsor organization or a combination of the two.

While only one in four respondent organizations specified the gender of their donor advisors, among those, gender was nearly evenly split.

Nearly half of the funds were located in the Midwest and a quarter on the West coast.

How are the funds operating?

More than eighty percent of accounts were opened after 2010.

The study included funds with less than $10,000 in assets up funds with $10 million and up. 

However, nearly half of the DAFs included in the report had assets of less than $50,000 at year-end 2021. Less than ten percent of funds had balances over $1 million (and only one percent over $10 million).

Most donors make their contributions to their DAFs in the last quarter of each year (when we get those tax deduction reminders from our favorite organizations).

However, not all donors were contributing to their funds annually.  Only eleven percent donated each year of the study. More common was the even split of approximately twenty-five percent donating in less than half the years of the study and twenty-five percent donating in more than half the years of the study.

When donors did contribute, more than a third were in the $10,000 to $49,999 range. Larger gifts occurred more infrequently; $50,000-$99,999 (15 percent) and $100,000-$499,999 (nineteen percent). The majority of contributions were cash, compared to contributions of securities.

Nearly a quarter of funds were inactive (defined as funds that made no grants and received no contributions in a three-year period) for the years of the study, and the authors found that these were smaller and newer DAFs. Nearly half of inactive DAFs were opened in 2020 or later.

What patterns can we see in gift distributions?

Less than four percent of grants are made anonymously.

The median grant size was $1,000.

Nearly sixty percent of grants made were directed towards general operations, with the forty percent directed to restricted funds tending to be a higher dollar amount. In fact, of the total dollar amounts reported, nearly three-quarters were for restricted purposes.

On average, seventy-eight percent of funds made at least one grant by the end of the study period, which equates to approximately two-thirds of the accounts making grants annually.

Only thirty-two percent of grant distributions are made at the end of the calendar year.

Within three years, more than half of DAFs have donated at least half of the original contribution to their fund. After eight years, 58% have donated the entire original contribution.

Only nine percent of the funds are endowed.

What’s next for the DAF Research Collaborative?

After such a comprehensive study, it would be understandable if the team at the DAF Research Collaborative wanted a break. However, as was noted in the introduction to the study, the Collaborative has several national projects planned and we are eagerly anticipating the results! The upcoming work includes a management survey from sponsors and a donor survey, both of which will add even greater context to the ongoing discussions about donor advised funds.

What are 5 take-aways nonprofit organizations can learn from this report?

  1. Don’t think that DAF donors are out of reach- they are likely people that you already know.  And since nearly all DAFs in the report were advised by individuals or families, there could be deeper connections to be made between your organization and the donor.
  2. We are all familiar with the end of the year fundraising push, but since only a third distribute their grants at year end, we may need to think more broadly across the calendar.
  3. As nearly half of the DAF advisors are between age 55 and 80, discussions could include your planned giving team as well!
  4. While the relatively low average total assets of the funds were surprising, it counteracts the thought that DAFs are exclusively for the wealthy. It may be great to find that million-dollar fund, but is also important to remember that people (more often than not) establish DAFs to foster their philanthropic efforts.   In fact, while nearly half of the funds reported annual giving in the $10,000 to $49,999 range, with a median gift size of $1,000, smaller yet impactful gifts are the norm.
  5. The mere presence of a DAF helps us towards the answer of the “inclination” question when we do our research.

Thanks to the efforts of the DAF Research Collaborative, we found some information we may have known and a lot that was surprising. Here’s to staying on our professional toes!