Today the National Philanthropic Trust UK (NPT-UK) published UK’s first ever donor-advised fund (DAF – charitable savings account) report. It shows charitable assets held in these accounts is reaching £1 billion in the UK – the highest ever.
Contributions to donor-advised fund accounts in 2015 was an all time high at £225.7 million. Grants from donor-advised fund accounts to charitable organisations reached £183.3 million, the largest total over the past five years.
John Canady, CEO of NPT-UK said: “In the US donor advised funds outnumber foundations three to one. Relatively unknown in Europe, it is very pleasing to see this positive growth trend in the UK and I expect to it continue as we are seeing more people being attracted to the DAF model to provide flexibility over their charitable giving.
“Our ambition is to make it easier for people to give money to charities globally and for everyone to understand that you don’t have to be a millionaire to have a strategic and organised charitable vehicle.”
TRENDS
- Not just cash – Donating Appreciated Assets: Philanthropists are increasingly contributing a wider range of assets to their donor-advised funds – such as shares or property – toward charitable purposes. Few charitable organisations have the expertise or willingness to accept appreciated shares or tangible property but for donors, these assets often comprise the largest share, if not the entire source of their wealth.
- Estate Planning: Donors and their estate planning advisors are recognising the potential use of a donor-advised fund as the beneficiary of a will. Often the largest gift a donor will ever make to charity is through his or her estate plan. Contributions to charity are not subject to inheritance taxes and donating 10 per cent of an estate to charity can lower the inheritance tax rate. By naming their donor-advised fund as a charitable beneficiary, donors can support charitable causes beyond their lifetime and pass along the value of philanthropy to the next generation. This should continue to gain momentum as the Baby Boom generation reaches retirement age.
- Converting Charitable Trusts and Foundations to DAFs: There is increased interest from individuals and families in converting or replacing their charitable trusts or foundations with donor-advised funds. Compared to other charitable entities, donor-advised funds are faster to establish, less costly to administer and more convenient to manage.
- Giving Anonymously: For many philanthropists, the driving factor in establishing a donor-advised fund is the ability to give anonymously. This feature protects donors from unwanted charitable solicitations. A family foundation or charitable trust must publicly disclose all grants and charitable activities. A related trend is the use of donor-advised fund accounts as a complementary giving vehicle – that is, donor-advised fund accounts being used in conjunction with another charitable giving vehicle or entity, like a family foundation or charitable trust.
NPT-UK is an independent UK registered charity dedicated to providing philanthropic expertise to donors, financial institutions, foundations and charities through donor advised funds (DAFs; a type of charitable savings account). NPT-UK is a UK/US dual qualified charity. Donations to NPT-UK are recognised for tax purposes in both countries simultaneously.
NPT-UK is affiliated with National Philanthropic Trust (NPT) in the United States which was founded in 1996. NPT has raised $6.2 billion in charitable contributions, currently manages $2.9 billion in charitable assets and has made more than 150,000 grants exceeding $3.6 billion to charities around the world.
Methodology
- Organisations – This report examined a total of seven charities registered at the Charity Commission of England and Wales that sponsor donor-advised funds.
- Primary Data Source – The primary source for each charitable sponsor’s assets, contributions, and grants is the organisation’s Annual Report filed with the Charity Commission of England and Wales.
- Secondary Sources
- Filings at Companies House
- The organisation’s website
- Survey responses from Charitable Sponsors
- UK Giving 2015, Charities Aid Foundation
- Since organisations have varied financial year-end dates, data was recorded in the filing year. For example, whether an organisation’s fiscal year ends on 31 March 2015 or 31 December 2015, the data will be recorded as 2015.
National Philanthropic Trust-UK is a UK-registered charity dedicated to providing philanthropic expertise to donors, financial institutions, foundations and charities, enabling them to realise their philanthropic aspirations. NPT-UK was founded in 2013 to increase philanthropy through donor-advised fund giving vehicles. NPT-UK offers donors-advised fund accounts for donors who wish to manage their giving over time and designated funds for donors who wish to make one-time gifts.
NPT-UK is a UK/US dual qualified charity. Donations to NPT-UK are recognised for tax purposes in both countries simultaneously. NPT-UK is an independent UK charity (charity number 115376) and is recognised by the IRS as a disregarded entity of the 501(c)(3) public charity National Philanthropic Trust in the US (EIN 23-7825575).
Marking its 20th Anniversary in 2016, NPT is the largest, national independent Donor-Advised Fund sponsor in the US. Since its founding, NPT has raised $6.2 billion in charitable contributions, currently manages $2.9 billion in charitable assets and has made more than 150,000 grants exceeding $3.6 billion to charities around the world. NPT annually publishes the Donor-Advised Fund Report, the industry’s authority on the state of US-based DAF giving. More at NPTrust.org.