Tuesday, March 12, 2019

Understanding Donor-Advised Funds: How Grants Flow During Recessions

H. Daniel Heist (University of Pennsylvania, School of Social Policy and Practice) and Danielle Vance-McMullen (University of Memphis, Public and Nonprofit Administration) have authored a research paper entitled "Understanding Donor-Advised Funds:  How Grants Flow During Recession."  Here is a short abstract:

Donor-advised funds (DAFs) are becoming increasingly popular. DAFs receive a growing share of all charitable donations and control a sizable proportion of grants made to other
nonprofits. The growth of DAFs has generated controversy over their function as intermediary philanthropic vehicles. Using a panel data set of 996 DAF organizations from 2007 to 2016, this article provides an empirical analysis of DAF activity. We conduct longitudinal analyses of key DAF metrics, such as grants and payout rates. We find that a few large organizations heavily skew the aggregated data for a rather heterogeneous group of nonprofits. These panel data are then analyzed with macroeconomic indicators to analyze changes in DAF metrics during economic recessions. We find that, in general, DAF grantmaking is relatively resilient to recessions. We also find payout rates increased during times of recession, as did a new variable we call the flow rate.


Nicholas Mirkay



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