Why are donor-advised funds growing in popularity?

For many donors, the answer to that question centers not on tax benefits, but on convenience and flexibility.

“It’s sort of like being Santa Claus all year long,” Marie Stapinski, a DAF account holder at the Pittsburgh Foundation, told the Pittsburgh Tribune-Review.

Like many donors who have chosen to set up donor-advised funds at community foundations, Stapinski chooses to give to an array of causes. In 2018, her fund made grants to a local youth education program, a theater production, and a program to help single women and families.

And she works closely with the foundation to vet charities and learn about community needs.

Donor-advised funds are just one tool used by community foundations to fund nonprofits nationwide — though it’s clear that their growth in popularity is a key reason why grantmaking by community foundations has been growing quickly.

Grants by the nation’s 100 largest community foundations totaled a record $7.9 billion in 2017 — an increase of more than $1.1 billion from 2016, according to the Columbus Survey.

That total comes at a time when community foundations of all sizes are seeing a surge in assets, both through increased contributions by donors and by the growth of investments.

Gifts to these 100 largest foundations reached more than $8.9 billion in 2017 — up $780 million compared with 2016. And while it’s too soon to know how much of that money was gifted to charities in 2018, community foundation leaders say they expect to see the amount of money granted from community foundations reach a new record.