Accounting
DAF assets keep accumulating without taxes
Donor-advised funds are continuing to grow while enjoying substantial tax deductions for charitable giving even as many contributions go to other DAFs and private foundations instead of actual charities, according to a new report.
The
National sponsor assets have grown at by far the fastest pace, increasing 92% from 2020 to 2023. (National sponsors are those with no specific geographic or cause-based mission, such as Fidelity Charitable, the National Philanthropic Trust and the American Endowment Foundation.) While they represent only 3% of DAF sponsors, national sponsors held 70% of all DAF assets, took in 73% of all DAF contributions, and gave out 61% of all DAF grant dollars in 2023.
The median DAF account size across all sponsors was $135,086 in 2023. National sponsors had the largest accounts, at $390,910. Donation processor accounts were by far the smallest, at $305. (Donation sponsors administer mass-scale contributions, such as workplace giving, payroll deduction or crowdfunding programs. Some examples include PayPal Charitable Giving Fund, Network for Good and American Online Giving Foundation.)
The median DAF payout rate across all sponsors was 9.7% in 2023. This payout has stayed around 9 to 10 percent for the past four years. Donation processors have by far the highest payout rates of any sponsor type, granting out around 82% in any given year. Community foundation sponsors have the lowest rates, granting out around 8 to 9%. (Community sponsors mainly support charities in a specific geographic region such as a state, county or city. Examples include the Silicon Valley Community Foundation, the Chicago Community Trust and the Community Foundation of the Ozarks).
DAF-to-DAF grants accounted for an estimated $4.4 billion in 2023. Some of these go-between gifts are the commercial sponsors’ largest. In 2023, for example, Schwab Charitable’s third-largest grant was to Fidelity Charitable, for $122 million. That same year, Fidelity Charitable’s largest grant was to National Philanthropic Trust, at $195 million, with Schwab Charitable in second place at $183 million.
Private foundations gave at least an estimated $3.2 billion dollars in grants to national donor-advised funds in 2022. Private foundations’ 5% annual payout requirement is supposed to ensure their grants go to operating charities in a timely way, but because DAFs have no payout or account-level disclosure requirements, foundation-to-DAF grants can undermine the foundation payout rules and transparency rules as well.
The report argues for more transparency. “The public only has access to aggregate sponsor-level information about DAF grants and payout rates,” said the report. “This means that individual DAF accounts that pay out at high rates may be providing statistical cover for DAF accounts that pay out very little, or nothing at all. And there is no way for regulators or the public to trace significant donations back to major donors, as is possible for private foundations.”
The report noted that every year, more charitable dollars are diverted to donor-advised funds while nonprofits on the ground struggle harder to get funding. “Donors reap significant tax savings from DAF giving, and those savings are subsidized by other American taxpayers with no guarantee of commensurate public benefit,” said the report. “In the absence of adequate transparency, DAFs are ripe for mistreatment by donors and for-profit actors. Congress could ensure that DAFs are more accountable to the public and move funds in a timely manner to charities on the ground.”
Total postsecondary spring enrollment grew 3.2% year-over-year, according to a report.
The National Student Clearinghouse Research Center published the latest edition of its
The report found that undergraduate enrollment grew 3.5% and reached 15.3 million students, but remains below pre-pandemic levels (378,000 less students). Graduate enrollment also increased to 7.2%, higher than in 2020 (209,000 more students).
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Community colleges saw the largest growth in enrollment (5.4%), and enrollment increased for all undergraduate credential types. Bachelor’s and associate programs grew 2.1% and 6.3%, respectively, but remain below pre-pandemic levels.
Most ethnoracial groups saw increases in enrollment this spring, with Black and multiracial undergraduate students seeing the largest growth (10.3% and 8.5%, respectively). The number of undergraduate students in their twenties also increased. Enrollment of students between the ages of 21 and 24 grew 3.2%, and enrollment for students between 25 and 29 grew 5.9%.
For the third consecutive year, high vocational public two-years had substantial growth in enrollment, increasing 11.7% from 2023 to 2024. Enrollment at these trade-focused institutions have increased nearly 20% since pre-pandemic levels.
Jordan Vonderhaar/Photographer: Jordan Vonderhaar/
The Internal Revenue Service has released
The Inflation Reduction Act of 2022 amended Sec. 55 to impose the CAMT based on the “adjusted financial statement income” of an “applicable corporation” for taxable years beginning in 2023.
Among other details, proposed regs provide that “applicable corporation” means any corporation (other than an S corp, a regulated investment company or a REIT) that meets either of two average annual AFSI tests depending on financial statement net operating losses for three taxable years and whether the corporation is a member of a foreign-parented multinational group.
Prior to the publication of any final regulations relating to the CAMT, the Treasury and the IRS will issue a notice of proposed rulemaking. Notice 2025-27 will be in IRB: 2025-26, dated June 23.
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Total college enrollment rose 3.2%
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