Friday, February 23, 2024

Some Much Needed DAF Analytics


From the Study

Over the past couple of weeks, I've come to the understanding that our concerns regarding DAFs are largely anecdotal and responsive to possibilities more than documented occurrences.  We think DAFs allow taxpayers to indefinitely "warehouse" charitable dollars.  That's a word used in a few of the comments to the proposed taxable distribution regulations.  I have also acknowledged -- mostly to myself, to be honest -- that our reactions to DAFs are sometimes based on caricature.  At the same time, we shouldn't ignore the real possibility of private benefit that DAFs present.  We need objective analytics, not just fancy reports from industry giants touting all the upside but none of the downside of DAFs.

The Donor Advised Fund Research Collaborative is a group of independent researchers without a dog in the hunt.  This week, DAFRC published The 2024 National Study on Donor Advised Funds, a study providing a wealth of objective data.  Here is the executive summary.  

The Donor Advised Fund Research Collaborative (DAFRC) is a consortium of academic and nonprofit researchers. Working across institutions, the collaborative is leading a 30-month, comprehensive research initiative to provide empirical data and insights on the characteristics and activities of donor advised funds (DAFs) in the United States. One of the initiative's main goals is to gather and analyze account-level DAF information that is not available from publicly accessible data sources, such as the IRS Form 990. The account-level data allows for a more nuanced and accurate understanding of DAFs, as well as comparisons across different types and sizes of DAFs and DAF sponsors.

The present report is the first of three major nationwide projects: (1) compiling a large, anonymized dataset from DAF providers, (2) fielding a management survey to gather policies and procedures from DAF sponsors, and (3) fielding a donor survey to gain insights into how individuals and families think about and use DAFs as part of their household giving.

The 2024 National Study on Donor Advised Funds includes information about DAFs from 2014 to 2022, covering aspects such as account size, age, type, succession plan, donor demographics, contributions, grants, payout rates, and grantmaking speed. The report represents the most extensive independent study on DAFs to date. Thanks to the collective efforts of 111 DAF programs that voluntarily provided anonymized data to the research team, the dataset covers nine years of activity from more than 50,000 accounts, with over 600,000 inbound contributions to DAFS and more than 2.25 million outbound grants from DAFs.

darryll k. jones

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