In our ranking of the top U.S. fundraisers, DAFs are doing better than ever.
For the past three years, we have compiled a list of the twenty public charities in the United States that took in the most donations.
We build our rankings by pulling contribution information from the tax returns of the largest donor-advised fund (DAF) sponsors and universities in the U.S. and then combining that with Forbes‘ list of the top-fundraising non-DAF, non-university charities. We do this for the most recent year available, which this time around is 2023.
In 2023 (as in 2021 and 2022), DAF sponsors have done phenomenally well. DAF sponsors accounted for nine of the top 20 charities, including the top three. These nine DAF sponsors brought in more than $41 billion in donations, 60 percent of the $69 billion total brought in by the entire group. And the three largest sponsors brought in more than $29 billion, more than 42 percent of the total.
Some of the operating nonprofits on our list — such as the United Way and Stanford University — sponsor DAF programs as well, but we did not categorize them as sponsors because their DAF programs are tiny compared to their other fundraising. In addition, neither our list nor Forbes’ list include religious organizations, as they are not required to make their financial information public.
What are these DAFs, anyway?
Every year, operating charities struggle harder for funds while wealthy donors pump more and more money into giving vehicles called donor-advised funds, or DAFs. And, thanks to a lack of adequate oversight, DAFs are ripe for mistreatment by donors and for-profit companies alike.
Donors can put money into a personal DAF and get a tax deduction for it, because they’re technically giving to a public charity. The charitable organization managing the DAF, which is called a sponsor, then gives the donor almost unlimited advisory privileges to recommend grants out of the DAF.
But DAFs have no payout requirement, so their assets can legally sit for years — or even forever — without moving out to operating charities. Because DAFs can be completely anonymous, they are a major part of the dark money pipeline. And with each passing year, DAFs eat up more of America’s charity pie. In 2023, DAF sponsors took in a sixth of all individual giving, and accounted for nine of the country’s twenty top-earning charities.
Tops of the pops
Of particular concern are DAF sponsors that are affiliated with for-profit wealth management firms. As we have documented before, these commercially aligned sponsors provide enormous publicly-subsidized tax benefits to their wealthy contributors, while their sister investment firms collect fees for managing the DAF assets.
In fact, one of these commercial sponsors, the Fidelity Charitable Gift Fund, has been the most successful charitable fundraiser in the country for the past eight years.
When we compiled our top 20, we found that Fidelity had received $12.6 billion in contributions — more than two and a half times more than the top working nonprofit, Feeding America. Fidelity’s two closest competitors, National Philanthropic Trust and the Schwab Charitable Gift Fund (recently rebranded as DAFGiving360), were hot on its heels, bringing in $9.2 and $7.3 billion, respectively.
The lion’s share
Not only are these enormous sponsors far outpacing most operating charities in raw fundraising dollars, but they’re taking in a greater share of the revenue than ever before. And this share is increasing at a rapid clip.
In fact, DAF sponsors have doubled their share of the top 20 revenue in just ten years. In 2013, DAF sponsors brought in $9 billion in donations, 30 percent of the total raised by the top 20 that year. In 2023, DAF sponsors brought in $69 billion in donations, 60 percent of the total.
It doesn’t have to be like this
Through the charitable tax deduction, taxpayers subsidize contributions to DAFs by up to 74 cents on the dollar. This gives us all an interest in making sure that the money stored in DAFs is actually used for the greater good. There’s no reason we need to enable DAFs to function as tax avoidance vehicles for the wealthy or a personal enrichment opportunity for commercial money managers.
It’s time to move the money out of DAFs. We’ve outlined a number of reforms that would make this happen, including:
- Increasing the flow of money from DAFs to operating charities
- Discouraging the warehousing of charitable dollars in DAFs
- Ensuring transparency and public accountability
- Preventing abuses of the charitable system
- Protecting the fairness and integrity of the tax system
Join us to advocate for these critical changes, whether you have a DAF or, like the vast majority of Americans, you don’t. We all have a stake in transforming our philanthropic sector to truly benefit our world.
For more information, please see our full list of DAF reform proposals, and our previous research on this subject here.