“A Short History of the Fast and Furious Rise of DAFs”

From yesterday’s Chronicle of Philanthropy:

1931

The New York Community Trust creates the first donor-advised fund to supplement its traditional fundraising. Community foundations remain the chief sponsors of DAFs for the next 60 years.

1991

Asset-management giant Fidelity creates its nonprofit DAF arm, soon to be followed by Wall Street rivals Vanguard (1997) and Charles Schwab (1999).  Today, the three are among the four charities to receive the most in donations, according to Inequality.org’s analysis.

1996

National Philanthropic Trust — what is now the largest DAF sponsor without ties to a for-profit company — is established.

2006

DAFs are recognized in federal law for the first time. The Pension Protection Act introduces some regulation, including provisions that formalize the relationship between the donor and the fund sponsor.

2007

Silicon Valley Community Foundation opens and becomes one of the first community foundations to raise support almost exclusively through DAFs. Thanks to a clientele stocked with tech titans, its assets will reach $13.5 billion in about a decade, surpassing the wealth of the Ford Foundation.

2013

Facebook co-founder Mark Zuckerberg and his wife, Dr. Priscilla Chan, donate $1 billion in Facebook stock to their donor-advised fund at the Silicon Valley Community Foundation — this after donating $500 million the year before.

2014

U.S. Rep. Dave Camp of Michigan introduces a tax plan requiring DAF donations to be distributed to working charities within five years. The legislation fails to muster support to pass.

2015

Fidelity Charitable becomes America’s largest charity based on dollars raised. It rakes in $4.6 billion, nearly $1 billion more than runner-up United Way. Fidelity will go on to top $15 billion in 2021, having grown more than 300 percent in just six years.

2018

Fidelity fund holders give away $5.2 billion, a total that eclipses the grantmaking ($5 billion) of the Bill & Melinda Gates Foundation — America’s largest private foundation — for the first time. By 2022, Fidelity grants would clear $11 billion — $4 billion more than the Gates Foundation.

2020

Billionaire philanthropist John Arnold joins with Boston College legal scholar Ray Madoff to launch the Initiative to Accelerate Charitable Giving, an effort to change tax laws to force foundations and donor-advised funds to distribute their assets more quickly. “There is no assurance that any of the $1.2 trillion currently set aside in private foundations and DAFs will ever be made available for charitable use,” the two write in a Chronicle opinion piece.

2022

A first-of-its-kind poll finds that 70 percent of Americans believe foundations and donor-advised funds should direct 10 percent of their assets to charities each year.

Fidelity Charitable reports it has more than 300,000 donors, roughly three times the number from a decade earlier. Congressional legislation to force DAF donors to pay out more continues to languish.

darryll k. jones