As most of us know, the global financial markets have been tumultuous in the first half of 2025. As tariffs on foreign countries are announced, modified and recalled, the US stock market has seen the worst declines since the beginning of the COVID pandemic in 2020 and the worst April performance since the height of the Great Depression.
As the current administration’s tariffs make their way through the courts, markets have reacted wildly. On a macro level, The Yale Budget Lab has regularly updated analysis of tariffs and how it will affect the US economy. On a personal level, the uncertainty has forced many of us to revisit our budgets and resist logging into our retirement accounts. And professionally, those of us in the philanthropic sector have wondered how the market chaos will affect DAFs.
Unfortunately, in previous economic downturns, DAF giving has decreased. The National Philanthropic Trust included a market overview section in their 2024 Donor Advised Fund Report, where it reported a dip in DAF distributions in 2023. A similar dip occurred during the recession in 2009. This trend of a slowdown following a jittery stock market may offer insight on what to expect.
The Institute for Policy Studies’ recent Independent Report on DAFs noted that DAF contributions were strong in 2021 but less so in 2022 and 2023, times of economic inconsistency. It also notes that DAF sponsors receive contributions of noncash assets more than other working charities, which may be because of the benefit of donating an asset rather than selling it.
Yet, although it is early in the year, DAF giving appears to be staying the course. Mitch Stein, head of Chariot, recently wrote on LinkedIn that in April 2025, donors that use the DAFpay service are increasing in both number of gifts and the average gift size.
Mr. Stein notes that as the value of stocks have fallen significantly, donors may be more inclined to donate out of philanthropic goodwill rather than a tax benefit. Assets already designated for charitable contributions could be more appealing than giving cash in a time when budgets are more difficult by the day.
Freewill, ever a source of timely and informative webinars, recently discussed “How to Recession-Proof Your Nonprofit.” With a focus on the 2008-2009 recession, the webinar noted that in a two-year period giving dropped a total of 13%. As of this writing, however, the marketing has rebounded a bit since its low in April, so there is cause for optimism amongst the nonprofit sector.
As cash becomes ever more expensive to donate because of inflation and higher costs, co-chief executive officer of Freewill Patrick Schmidt reiterated, just as Mr. Stein noted above, that DAF assets are already there. It is money waiting to be donated, as long as fundraisers ask.
While this is good news, it remains to be seen whether nonprofits that depend on federal funds to support their missions can overcome that loss through generous donors. The Council on Foundations has announced a public statement and encouraged foundations to join them in an effort to support the nonprofit sector. Some private foundations, such as the MacArthur Foundation, Pivotal Ventures, Bloomberg Philanthropies and the Robert Wood Johnson Foundation, have already committed to increasing their giving in light of unexpected federal reductions, and in spite of a reduction in endowments due to the stock market.
For DAFs specifically, the call has already been made for DAF giving by philanthropist Amy Marks Dornbusch, the HalfMyDAF movement is back for 2025, and DAFDay has been scheduled for October 9, 2025. Only time will tell whether these efforts will be enough.
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Image credit: https://www.macrotrends.net/1358/dow-jones-industrial-average-last-10-years, as of 5/30/2025.
