As more charitable giving comes from our country’s wealthiest donors, more of that giving is going into charitable intermediaries like private foundations and donor-advised funds. These two giving vehicles work a little bit differently from each other, but they have one key thing in common. Donors can take tax deductions up front when they put money into them, but then the money can sit for a very long time before making its way out to charities on the ground.
This matters because of how fast intermediary giving is growing — especially giving to donor-advised funds, or DAFs. According to data from the National Philanthropic Trust and the DAF Research Collaborative, DAF assets have grown more than 323 percent over the past ten years. Last year, DAFs were nine of the twenty largest-grossing charities in the U.S.
And intermediaries aren’t just taking in more charitable revenue — they’re taking in a higher proportion of that revenue. In 2024, DAFs and foundations together took in 38 percent of all individual giving in the United States, almost double what they took in ten years earlier.
Last year we predicted that these two charitable intermediaries would be taking in half of all individual giving by 2028. We just updated our projections based on the latest data, and DAFs and foundations are still on track to make that dubious goal.
All of this rapid growth means that the assets held in DAFs and foundations will soon eclipse $2 trillion. They’ll reach this milestone in just two years, by 2026, assuming that their assets will grow at the same rate they have over the past ten years. And it’s possible it could happen even sooner; tax law changes that go into effect in 2026 may have spurred a jump in DAF contributions late in 2025.
Through the charitable deduction, we taxpayers subsidize gifts to foundations and DAFs. But despite our subsidies, overall giving has remained essentially flat, and an ever smaller share of it is going directly to working charities.
Simple changes to outdated laws — specifically, to increase foundation payout requirements and to establish requirements on donor-advised funds — would put charitable giving back on the right track, and would generate billions in additional funding for working charities.
For more, please see our previous reporting on this subject here.
Helen Flannery directs research for the Charity Reform Initiative of the Institute for Policy Studies.