National Study on Donor Advised Funds

The 2024 National Study on Donor Advised Funds was published last week by the DAF Research Collaborative. Donor advised funds (DAFs) represent a very substantial and controversial part of the charitable nonprofit sector. On one hand, they are characterized as the fastest growing segment of the sector, attracting more dollars for charities. On the other hand, they are viewed as a means for donors to warehouse their wealth while still getting deductions for contributions they arguably still practically control.

The 2024 National Study on Donor Advised Funds includes information about DAFs from 2014 to 2022, covering aspects such as account size, age, type, succession plan, donor demographics, contributions, grants, payout rates, and grantmaking speed. The report represents the most extensive independent study on DAFs to date. Thanks to the collective efforts of 111 DAF programs that voluntarily provided anonymized data to the research team, the dataset covers nine years of activity from more than 50,000 accounts, with over 600,000 inbound contributions to DAFS and more than 2.25 million outbound grants from DAFs.

Key Findings

  • Nearly half of all DAFs (49%) had total assets at the end of 2021 of less than $50,000. Only 7% of DAFs had balances of $1 million or more. 81% of DAF accounts in the study were opened after 2010.
  • Most DAF accounts (97%) were advised by individuals or families. Organizations advised only 3% of DAFs in the study.
  • About 9% of DAFs were endowed DAFs.
  • Almost all DAFs (92%) have a succession plan in place that establishes what organization(s) or advisor(s) receive “control” of the funds after the original donors are no longer living. Approximately 30% of DAFs designate the sponsor or another nonprofit organization to receive remaining funds.
  • Approximately 61% of all DAFs had multiple contributions into the DAF during the study period. One in nine DAFs had contributions every year.
  • DAFs commonly received contributions between $10,000 and $49,999.  About 40% of contributions were in this range ➔ DAFs are a mid-range philanthropic vehicle option for donors. 
  • In the most recent three-year period, 78% of accounts made at least one grant. In an average year, nearly two-thirds of accounts (63%) made an outbound grant while over one-third (37%) did not
  • Around 36% of active DAFs disbursed yearly grants ranging from $10K to $50K
  • Less than 4% of grants transactions were made anonymously.
  • Most grants (59%) were general operating grants as opposed to restricted grants (41%), although restricted grants tended to be of higher dollar value.
  • Grantmaking from DAFs is spread relatively evenly throughout the year—only 32% of grantmaking occurs in the fourth quarter. In contrast, the fourth quarter of the year accounts for 57% of all funds contributed into DAFs.
  • The median payout rate for all accounts is 9%. The median for all accounts that make grants (removing inactive accounts) is 15%. The mean (average) payout rate for all DAF accounts is 18%.
  • Approximately 22% of DAFs were inactive, or had a zero payout rate, for the three most recent years included in the study (2020-2022). When looking more closely at inactive DAFs, those DAFs are both smaller and newer DAFs. Almost half (45%) of inactive DAFs were opened in 2020 or later.
  • Just over half of all DAFs (54%) granted out more than half of their original contribution within three years. 
  • Two-thirds of accounts (67%) did not make any grant within the same year that they opened (Year 0). However, by Year 3, most accounts (54%) granted out over 50% of the original contribution. By Year 8, almost all DAFs (92%) had made a grant; 75% had granted more than half of the original amount; and 58% had granted all of the original contribution.
  • Community Foundations have the highest percentages of Medium, Large, and Very Large accounts (31%, 9%, and 1% respectively). The majority of DAFs at National programs (54%) were Small in size. Religiously Affiliated Organizations had a higher percentage (34%) of Very Small accounts than other sponsor types.
  • National DAF programs do not appear to offer Endowed DAFs, while Community Foundations were much more likely to have Endowed DAF accounts.
  • While about one-third of DAFs at Religiously Affiliated Organizations (31%) and Community Foundations (35%) were opened in or before the 2000s, only 2% of DAFs at National Programs were opened in that period. 
  • About 26% of accounts at National Programs were inactive in the three-year period, compared with Community Foundations (19%) and Religiously Affiliated Organizations (20%). However, National DAF programs had the highest percentage of new accounts, and new accounts were more likely to be inactive. When looking at accounts that opened before 2020, the percentage of inactive accounts in Nationals (17%) was about the same as those in Community Foundations (17%) and Religiously Affiliated Organizations (20%).
    • Smallest accounts were more likely inactive than largest accounts.
  • Members of the Baby Boomer generation represented nearly half (49%) of all advisors. 
  • Only 1% had a balance over $10 million.

During today’s DAF Research Collaborative webinar, Danielle Vance-McMullen, Principal Investigator for the DAFRC and Assistant Professor at DePaul University, noted that the community foundation sample was very well represented. However, she added that while there was some participation by “commercial” DAFs, the study did not cover that particular group as well. Accordingly, the report may not provide a sufficiently comprehensive picture of DAFs to fully inform sound policy making. Nevertheless, it’s a very valuable set of data for researchers, policy makers, and DAF sponsoring organizations.