For more than a decade donor-advised funds (DAFs) have been the fastest growing giving vehicle in the charitable giving landscape. So what draws donors to DAFs? When we peel back the layers, we find a whole host of reasons and benefits. In addition to being easy to establish, DAFs offer an immediate tax benefit, a tax free environment for appreciated assets to be sold, anonymity in giving, family involvement, and the ability to spread giving over many years.
While other giving vehicles have seen little to no growth in recent years, the DAF has grown to be a fan favorite among donors. Educating donors on the various ways they can benefit their favorite causes no longer falls solely on the shoulders of charities. Financial professionals now play an active role in educating donors regarding philanthropy while continuing to manage clients’ philanthropic assets.
Who are the donors that find DAFs so appealing?
Are there generational demographics that reveal giving patterns?
Renaissance Administration LLC and Renaissance Charitable Foundation recently analyzed almost 13,000 donors representing approximately 7,500 DAF accounts and the results were illuminating.
Not surprising, Baby Boomers have funded more accounts, average more grants per year per DAF, have the largest average DAF value and the largest average grant amount of all age groups. What is interesting is how closely Millennials are to Generation X in several key statistics, and even surpassing them in average grant amount and median fund value.
Also, as we dug deeper into the data, we were surprised to learn the average number of donors per fund is nearly the same for each of the groups; Millennials average 1.6 donors per fund, Gen X average 1.5 per fund, and Baby Boomers average 1.7 donors per fund.
Bottom line is that Millennials have the capacity to quickly overtake Generation X in charitable giving through DAFs especially when you consider many (Baby Boomers) may be naming their Millennial children as successor grant advisors on their donor-advised fund accounts.
With the ability to research and make grants from their DAF on-line with a minimum contribution of $5,000 to get started, are you talking to your Millennial clients about starting a donor-advised fund?
Share this video with your clients to show them how easy it is to get started.