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Impact Investing + Tax-Smart Giving = High Impact Charity Grants

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When it comes to charity, donor-advised funds are an ideal way for people to make a difference because they help donors stay nimble to immediately respond to unforeseen world events, while maintaining their commitment to their core giving interests.

Although a significant amount of wealth in the U.S. is tied up in non-publicly traded assets like real estate, restricted stock, or limited partnership interests, most donors who have these assets still are giving with cash, checks and credit cards. 

According to a Fidelity Charitable report its donors recommended a record-breaking $3.5 billion in grants to support more than 114,000 organizations in 2016. The trend continues this year with nearly $2 billion granted in the first six months of 2017, including an unprecedented nearly $9 million in bitcoin. This is more money given to charities over the first half of the year than ever before in the organization’s 26-year history.

As popularity of donor-advised funds continues to rise, the list of charities receiving support from more than 1,000 Fidelity Charitable Giving Accounts increased by 43% to 30 charities.

Nearly three-quarters of the 849,000 grants that donors recommended last year went to charities donors had previously supported, reflected in nonprofit mainstays like United Way, American Red Cross and Habitat for Humanity consistently represented on the list.

But local, national and global events also activated groups of donors to provide more support to a range of key issues and causes.

For instance, more donors chose to recommend grants to groups like Southern Poverty Law Center and Natural Resources Defense Council following the election. Similarly, donations to International Rescue Committee and Doctors Without Borders increased in the wake of the Syrian refugee crisis.

In 2016, Fidelity Charitable’s experts assisted donors in converting a record $796 million of non-publicly traded assets into funds available for grants from their Giving Accounts. These donations included nearly $125 million in donor contributions of restricted stock, as well as assets as varied as bitcoin, private stock and life insurance policies. Due to the tax efficiencies of donating non-cash assets, this uptick results in more overall dollars available for giving.

The Fidelity report also highlights growing enthusiasm for impact investing as support of impact-investing nonprofits has nearly doubled over the past five years to 3,150 donor-recommended grants totalling $19.1 million in 2016. In all, Fidelity Charitable made $73 million in grants to impact-investing nonprofits over a 5-year period. Impact investing, until recently, has been a niche concept, but the growth in support across a wide breadth of Giving Accounts indicates that it may become a more mainstream trend.

Contribution and granting highlights include:

• Fidelity Charitable donors recommend nearly $2 billion in first six months of 2017.

• Fidelity Charitable’s investments have generated an additional $4.5 billion available for grants since inception.

• Grant dollars to charity have tripled over the last 10 years, while the number of grants $1 million or more has increased 500% to 404 grants in 2016.

• Sixty percent of donor contributions to Fidelity Charitable in 2016 were non-cash assets, such as stocks or mutual funds.

• Donors contributed a record number of non-publicly traded assets in 2016—$796 million in restricted stock, limited partnership interests, bitcoin and other assets, potentially unlocking assets that would not otherwise be available to give.

• The number of grants per Giving Account has grown over the last 10 years, from 6.2 to 9.3, while the average grant amount has remained at about $4,200.

• Three-quarters of donors’ contribution dollars are granted within five years of receipt.

MORE 2017 Fidelity Charitable Giving Report

MORE Fidelity Charitable

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