Study: For Every Dollar Contributed to Community Foundation DAFs in 2019, Donors Granted $1.08 in 2020

Donor-advised fund account holders at U.S. community foundations stepped up their giving to support communities impacted by the COVID-19 pandemic in 2020 -- granting record amounts to help their neighbors in need.

According to a survey by the Community Foundation Public Awareness Initiative, donor-advised funds (DAFs) at 84 U.S. community foundations granted more than $6.7 billion to nonprofits in 2020.

This figure outpaced the $6.2 billion contributed into DAFs at community foundations in 2019. This means community foundation DAF donors granted $1.08 in 2020 for every dollar they contributed into their funds the previous year. 

The $6.7 billion granted to nonprofits from community foundation DAFs in 2020 also represented an increase of nearly $2 billion, or 41.1 percent, from the $4.75 billion granted from community foundation DAFs in 2019.

These grants provided critical support to local nonprofits working to help families facing issues such as lost income, unstable housing, food insecurity, and more. 

Donors use DAFs as a tool to contribute assets such as money, investment income, and real estate and then directly grant those assets to charities. Once an asset is placed in a DAF, it must ultimately be given to IRS-recognized nonprofits. Donors have discretion over which charities receive grants – and when they receive them.

In 2020, donors chose to grant money out from their DAFs swiftly to meet the scale of the COVID-19 crisis. 

“We have always said that donor-advised funds allow charitable people to prepare for the needs of the future. Well, that future kicked us in the face last year,” said Jennifer Leonard, president and CEO of the Rochester Area (N.Y.) Community Foundation. 

The foundation took in $22.5 million in new gifts in 2020 and awarded $22.9 million in grants. “It was a tremendous outpouring of support for the unprecedented challenges of 2020,” Leonard added.

About the Survey  

Community foundations are grantmaking public charities that mobilize the assets of past and current donors to improve the lives of people in a defined geographic area. They use the resources of individuals, families, and businesses to support effective nonprofits in their communities. 

The Community Foundation Public Awareness Initiative survey includes results from community foundations in every region of the country, covering 28 states, plus the District of Columbia. It includes data provided by all of the 15 largest U.S. community foundations, as well as data provided by smaller and mid-size foundations. 

The U.S. is home to nearly 800 community foundations – meaning the total granted through donor-advised funds at all community foundations during this period exceeds the $6.7 billion granted by those who responded to the survey.  

Historically, donor-advised fund holders have stepped up to support their communities during difficult economic times. 

A 2019 study by Dan Heist, a professor at the University of Pennsylvania, and Danielle Vance-McMullen, an assistant professor at the University of Memphis, found that donors who manage DAFs tend to be more generous with their grantmaking during recessions, especially when compared with other forms of giving. 

An Unprecedented Response

The response of community foundation donors to address COVID-19 is unprecedented in its size and scope. 

Although community foundations stepped up their efforts to educate and connect with their donor-advised fund holders about the scope and uniqueness of Covid-19-related community needs, many foundations reported that their donors did not need much convincing to act urgently.

The Oregon Community Foundation’s donors responded quickly to their communities’ “cascading crises” in 2020 -- COVID-19, wildfires over Labor Day weekend, and the “increased visibility of historical and current systems of racial injustices,” said the foundation’s chief philanthropy officer Kirsten Kilchenstein.

The foundation’s donors distributed a record $220 million to more than 3,000 nonprofits throughout Oregon in 2020, which reflected a 44 percent increase in donor-advised fund grantmaking from the previous year.

“OCF donors stepped up time and again, responding to calls for support as each crisis appeared,” Kilchenstein added. “Moreover, the breadth of response was remarkable: long-time OCF donors; individuals new to OCF; corporate donors; families -- the generosity reflected in the extraordinary increase in grantmaking was truly remarkable.”

Donors at the Kalamazoo (Mich.) Community Foundation granted more than $2 million from DAFs in 2020 –a seven-fold jump from the $284,000 granted in 2019. 

“Within a few weeks of activating our Community Urgent Relief Fund, donor advisors made more than $1 million in grant suggestions to support our Covid-19 relief efforts,” said Kalamazoo Community Foundation vice president of donor relations Joanna Donnelly Dales. 

Eileen Connolly-Keesler, president and CEO of the Community Foundation of Collier County (Fla.), said the foundation’s work with donor-advised fund holders “to make them aware of our local nonprofits’ needs” paid off in 2020. With the foundation’s encouragement, many DAF holders also granted directly to nonprofits. “We see part of our job as educators,” she said.

Frank Fernandez, the president and CEO of the Community Foundation for Greater Atlanta, emphasized the unique capability of community foundations to address the kinds of structural inequalities brought to light in the crisis at the local level. Donors in Atlanta increased their DAF giving at the community foundation by more than $10 million in 2020, granting more than $123 million.

“Across the Atlanta region, as around the world, Covid-19 laid bare hard, harsh truths and we cannot unsee them,” Fernandez said. “At the Community Foundation, we are committed to using our resources -- grant investments, influence, programs, our voice, and more -- to help break down these barriers that prevent so many from pursuing their concept of the good life, whatever that may be, and are thankful to our fellow community foundations across the nation for their parallel efforts towards a more equitable world.”