Total contributions to donor-advised funds dropped 21.7% in 2023, while grants made to charities from those funds declined 1.4%, according to a new report by the National Philanthropic Trust. The 2024 DAF Report looked at the DAF grantmaking landscape using data for the 2023 fiscal year. While contributions to and grants awarded from DAFs were both down, assets held within the funds grew 9.9% to $251.5 billion, according to the report.

“While individual giving was down, DAF grantmaking remained steady,” a spokesperson for the National Philanthropic Trust said via email. “DAF donors continue to be one of the most consistent funding sources for charities despite economic and financial market headwinds.”

While some fundraisers might look at the new data and think it’s an indication of a decline in the popularity of DAF grantmaking, that’s not what Danielle Vance-McMullen sees.

“I don’t think what we’re seeing is a cooling donor base,” said Vance-McMullen, one of the founders of the DAF Research Collaborative. “I think we’re seeing what we’ve seen historically in donor-advised funds: When the stock market is struggling, contributions to donor-advised funds decrease. Luckily, grants from donor-advised funds are relatively resilient.”

Critics of donor-advised funds point to the report data as evidence that wealthy donors are “warehousing” money in the funds to get tax breaks but not doling out the money to struggling charities.

Still, those struggling charities shouldn’t see the report’s findings as a reason to give up on DAF grantmaking, said Vance-McMullen, who noted they are historically reliable during giving season.

“In terms of giving season,” she said, “this report doesn’t give me any pause in terms of approaching those donor-advised funds for year-end gifts.”

Digging Into the Data Around DAF Grantmaking

The report’s data comes from 1,140 DAF sponsoring organizations, including national commercial sponsors, community foundations and single-issue sponsors, such as universities or religious groups. Groups were asked to provide fiscal year data on DAF grantmaking, and some fiscal years end June 30, so the data spans roughly 18 months and includes some data from 2022. That likely explains why contributions fell so significantly, according to Vance-McMullen.

Read the full article about DAF grantmaking at U.S. News and World Report.