Americans have long distinguished themselves through high levels of charitable giving. This has been part of our nation’s DNA for generations and has been especially true throughout the global pandemic. During the past three years, Americans have rallied to support their neighbors in need and causes worldwide. An increasingly popular giving tool, donor-advised funds (DAFs) have played an outsized and critical role in supporting these needs.

According to National Philanthropic Trust (NPT) in its end-of-year 2022 Donor-Advised Fund Report, grants from donor-advised funds to charitable organizations in 2021 reached $45 billion, an increase of 28.2% over the previous year. NPT also found that 2021 was the highest DAF grant payout rate on record. And this is more than just a single-year phenomenon. DAF grantmaking also surged in 2020 and has increased 400% during the past decade.

While DAFs have become increasingly popular among donors, they are hardly new. These charitable giving accounts have been around since 1931. Today they are offered as a giving option through public charities that give donors of all income levels the opportunity to become strategic philanthropists by making an upfront commitment to charitable giving and sustaining that through ongoing donations to charities of their choice over time.

DAFs relieve donors of administrative burdens and can make non-cash assets more readily available for donations. Many working charities don’t have the expertise or resources to accept contributions of stock or more complex assets like closely held business interests and real estate. DAF-sponsoring organizations understand complex gifts, and as a result, donors with DAFs can access all areas of their portfolios for philanthropy. Once an asset is donated to a DAF, the proceeds can benefit dozens of nonprofit organizations.

When a donor contributes assets to a DAF, the contribution—and all the investment gains those assets realize while in the account—must ultimately be granted to nonprofits. Based on what we’ve seen at the Greater Kansas City Community Foundation and Greater Horizons, it’s clear that donors are drawn to using DAFs because they maximize and sustain charitable donations and impact. Donors can give more when they can invest and grow their charitable assets.

Read the full article about donor-advised funds by Debbie Wilkerson at Forbes.