NEW YORK (AP) — Fidelity Charitable, the nation’s largest grantmaker, distributed a record-setting $11.8 billion to nonprofits in 2024, up more than 5% from the previous year at a time when generally donations are dropping.
The grant total shows how quickly use of the donor-advised fund — an investment account that allows donations to be distributed over time — is growing. Fidelity Charitable said distributions to nonprofits in 2023 were four times what they were 10 years ago.
“I think 2023 was a pretty amazing year,” Fidelity Charitable President Jacob Pruitt told The Associated Press. “When you think about the volatility, the market inflation, we still did a phenomenal job in regards to grantmaking. And that’s our big measure — dollars going into the sector.”
However, the increasing popularity of DAFs has many measuring the funds’ effectiveness at funneling money to charities. Though donors receive an immediate tax deduction when they put money in a DAF, there is no deadline for them to then contribute that money to a nonprofit.
Public comment on new regulations proposed by the Internal Revenue Service for DAFs will end on Thursday. If approved, the IRS will impose a 20% excise tax on donations that provide a significant benefit to the donor.