Donor-advised fund assets continue to grow

Total donor advised fund (DAF) assets have grown 67% during the past four years, from $152 billion in 2020 to $254 billion in 2023, according to new data from Institute for Policy Studies (IPS). 

One of the more controversial uses of DAFs — DAF to DAF transfers instead of to charities — appears to have moved into double digits in percentage of giving. IPS cites a report from the California Attorney General’s office that estimated that transfers from one DAF sponsor to another accounted for 10.8% of all grants from California DAFs during a three-year period.  

Giving USA estimated in the most recent report that DAF-to-DAF grants totaled $5.6 billion during 2022. IPS estimated that DAF-to-DAF grants accounted for at least $4.4 billion during 2023. By including these transfers in their grant, contribution, and payout numbers, industry reports on DAFs arguably inflate all three. And some of these go-between gifts are the commercial sponsors’ largest, according to the IPS data. 

DAFs at national sponsors have grown at by far the fastest pace, increasing 92% from 2020 to 2023. While they represent only 3% of DAF sponsors, national sponsors held 70% of all DAF assets, took in 73% of all DAF contributions, and paid out 61% of all DAF grant dollars in 2023, according to the IPS data released today via a new study. 

The median DAF payout rate across all sponsors was 9.7% during 2023. This payout has stayed at roughly 9% for the past four years. Donation processors have by far the highest payout rates of any sponsor type, granting out around 82% in any given year. Community foundation sponsors have the lowest rates, granting out roughly 9%, according to IPS data. 

The median DAF account size across all sponsors was $135,086 in 2023. National sponsors had the largest accounts, at a median $390,910. Donation processor accounts were the smallest at a median $305.