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Giving From Donor-Advised Funds Surge as Pandemic Spreads
By Michael Theis
The coronavirus pandemic has touched off an explosion of grant making from donor-advised funds, according to a spot check of the big national donor-advised fund-sponsors and community foundations of all sizes.
Fidelity Charitable, the biggest fund in the United States, reported $1.7 billion in outgoing grants in the first quarter of 2020. That’s a 20 percent increase in awards over the first quarter of 2019. Some $89 million of those donations was earmarked for coronavirus pandemic response efforts in March alone.
“We’ve seen a huge uptick in grant making for Covid since the beginning of March,” said Pamela Norley, president of Fidelity Charitable. “We’ve seen more money go out in a single month for this disaster than we saw in 2017 with seven disasters.”
Fidelity also surveyed donors who had given at least $1,000 to a charity from March 18 to March 30. Some 25 percent plan to increase their giving, while 54 percent plan to maintain their giving levels.
On Tuesday, Fidelity also announced an effort to push its donor-advised-fund holders to channel an additional $100 million for coronavirus relief efforts by May 5.
As part of the push, Fidelity has launched a coronavirus resource page highlighting local funds and plans to maintain a schedule of webinars and social-media outreach to get attention from donors.
Money is not simply flowing out of the funds. Donors are also contributing to their accounts, even though the slide in the stock market and the tumbling economy might have caused some supporters to pause their giving.
Deanna Spaulding, a spokeswoman at Fidelity Charitable, declined to provide figures for incoming gifts, but she added that the number of new fund accounts opened has also grown since the start of the year.
Sponsors take different approaches to measuring giving so it is hard to make direct comparisons of how much is flowing out of donor-advised funds to organizations hurt by the pandemic.
Officials at Schwab Charitable, the second-largest commercial donor-advised-fund sponsor, began to track coronavirus giving on February 14 and said from then through March 31, outgoing grants increased 21 percent in value compared with the same period last year.
Schwab Charitable has also actively promoted coronavirus response efforts to its donors. It asked the Center for Disaster Philanthropy for a list of organizations responding to the pandemic globally and highlighted them on its website. Those organizations saw a nearly 450 percent increase in grant dollars from Schwab account holders.
Kim Laughton, president of Schwab Charitable, said the crisis — and the resulting flurry of grant activity from Schwab’s donor-advised funds — shows the value of donor-advised funds, which have been criticized for siphoning money away from cause-oriented charities.
“When you do have needs, people who have a donor-advised fund are really in a position to step up,” said Laughton.
‘Busiest March’ in History
Eileen Heisman, president of the National Philanthropic Trust, the third-largest donor-advised-fund sponsor in the country, said the number of grants made in March rose 39 percent, and the value increased 120 percent from the same time in 2019. “This has been NPT’s busiest March, as far as grants, in our history,” said Heisman.
Donors with accounts at Vanguard Charitable increased the amount they sent to charities by 28 percent in the first quarter of 2020, according to Jane Greenfield, president.
From March 11, when the World Health Organization declared a global pandemic, to March 31, Vanguard donors earmarked $25 million in grants specifically for coronavirus response efforts. The average grant size has grown to $14,000, double the average donation size in prepandemic times.
Vanguard is also working with the Center for Disaster Philanthropy to highlight charities directly involved in the effort.
“Donor-advised-fund account holders are uniquely positioned to be a part of the solution here,” said Greenfield. “We sent out an email to our 21,000-plus donors just to remind them that they are uniquely situated and to encourage them to give.”
That email went out on a Friday, Greenfield said, and on Monday grants to charities doubled.
Community foundations, also big players in the world of donor-advised funds, report similar sharp increases in grants from those accounts in response to the pandemic. Much of the giving is focused on local coronavirus rapid-response emergency funds that have been established.
Jason Baxendale, chief development officer at the Chicago Community Trust, said his organization has seen a surge in grants released by its donor-advised-fund holders. In the first week after the pandemic was declared in early March, Chicago Community Trust account holders gave 321 grants to charity, worth a total of about $30 million. For comparison, Baxendale said, in the entire month of March 2019, its account holders granted just under $18 million.
“At this point, more is going out than is coming in” to the donor-advised funds, Baxendale estimated. “Giving into the donor-advised funds over the past month or two is about the same or lower with all of the market volatility. But the grant making has increased substantially.”
Numbers provided by other community foundations showed similar levels of donor-advised-fund grant-making activity.
The St. Louis Community Foundation reported March 2020 giving of $4.5 million from its account holders, up from $1.2 million last year. The Oregon Community Foundation said account holders increased their giving to charities by 97 percent quarter to quarter, providing $2.5 million in March alone. The Greater Kansas City Community Foundation’s account holders reported March grants of $21.5 million. Grants from the last two weeks of the month were up 142 percent from the same period last year.
Even smaller community foundations are seeing unprecedented grant-making activity from its donor-advised-fund accounts. The Berkshire Taconic Community Foundation, in Massachusetts, saw grants since March 10 increase to $1.1 million from $561,240 in 2019 during the same time period this year. The Erie Community Foundation, in Pennsylvania, reported March grant-making activity from its account holders totaling $109,600, up from $45,670 the year before.
Other nonprofits that offer donor-advised funds are also seeing increases.
The Jewish Communal Fund, the seventh-largest donor-advised-fund sponsor in the United States, said its account holders were channeling more money out of their funds than they did at this time last year. However, the group was unable to break that down in detail.
Tamar Snyder, senior director of marketing and communications, said account holders had contributed nearly $6 million to coronavirus relief efforts by the end of March.
Said Snyder in an email: “What we’re seeing is that fund holders are shifting their grant-making habits and prioritizing their grant-making now to help support the organizations on the front lines of addressing the physical, emotional, and financial needs resulting from the coronavirus outbreak.”
Corrections: A previous version of this article had incorrect numbers for Schwab Charitable. Also, the percentage increase for the Greater Kansas City Community Foundation was for the second half of March, not the whole month.Return to Insights & Events