Some of the operating nonprofits on our list — such as the United Way and the Salvation Army — sponsor DAF programs as well, but we didn’t categorize them as sponsors because their DAF programs are tiny compared to their other fundraising. In addition, neither our list nor Forbes’ list include religious organizations, as they are not required to make their financial information public.
What are DAFs, anyway?
Every year, operating charities struggle harder for funds while wealthy donors pump more and more money into intermediary giving vehicles called donor-advised funds, or DAFs. And, thanks to a lack of adequate oversight, DAFs are ripe for mistreatment by donors and for-profit companies alike.
Donors can put money into a personal DAF account and get a tax deduction for it, because they’re technically giving to a public charity. The charitable organization managing the DAF, which is called a sponsor, then gives the donor almost unlimited advisory privileges to recommend grants out of the DAF.
But DAFs have no payout requirement, so their assets can legally sit for years — or even forever — without moving out to operating charities. Because DAFs can be completely anonymous, they are a major part of the dark money pipeline. And with each passing year, DAFs eat up more of America’s charity pie. DAF sponsors took in almost a quarter of all individual giving in 2023, and if their current growth continues, they could take in half of individual giving by 2028.
Top of the pile
Of particular concern are DAF sponsors that are affiliated with for-profit wealth management firms. As we have documented before, these commercially aligned sponsors provide enormous publicly-subsidized tax benefits to their wealthy contributors, while their sister investment firms collect fees for managing the DAF assets.
In fact, one of these commercial sponsors, the Fidelity Charitable Gift Fund, has been the most successful charitable fundraiser in the country for the past nine years.
Fidelity Charitable received nearly $16 billion in contributions in 2024 — three times more than the top working nonprofit, Feeding America. Fidelity’s two closest competitors, National Philanthropic Trust and DAFGiving360 (formerly known as the Schwab Charitable Gift Fund), were hot on its heels, bringing in more than $14 billion and $9 billion, respectively.
It doesn’t have to be this way
It’s time to move the money out of DAFs. We’ve outlined a number of reforms that would discourage the warehousing of charitable dollars in DAFs, ensure transparency and public accountability, and increase the flow of money from DAFs to operating charities.
Join us to advocate for these critical changes, whether you have a DAF or, like the vast majority of Americans, you don’t. We all have a stake in transforming our philanthropic sector to truly benefit our world.
