Funds
Donor-advised funds (DAFs) housed at community foundations represent a significant portion of the funds held in the field, and unsurprisingly experienced the same negative year over year changes in assets and fundraising that the field saw more broadly. Still, DAFs remain a highly active vehicle for philanthropy within the field, as the median community foundation reported a 13 percent increase in DAF grantmaking over 2021 levels.
Endowed and non-endowed assets
Smaller, emerging, and growing community foundations tend have higher proportions of their assets in endowed funds. Larger community foundations, focused on diversifying their portfolios and providing flexible, specialized options for donors to engage in philanthropy in different ways, will also tend to have more pass-through funds that can be activated in full, any time.
Median percentages for the proportion of assets that are endowed and non-endowed may not add up to 100% due to rounding. (n=178)
Product mix
Large community foundations tend to house more DAFs, which can be high touch in nature and require additional staff to grow and manage, than their smaller counterparts.
Averages were used to total 100 percent. (n=173)
| Size of Foundation | Donor-advised funds | Discretionary funds | All other funds |
|---|---|---|---|
| $0-$25M | 7% | 27% | 66% |
| $25-$50M | 12% | 22% | 66% |
| $50-$100M | 17% | 21% | 62% |
| $100-$250M | 24% | 14% | 61% |
| $250-$500M | 29% | 21% | 50% |
| $500M+ | 36% | 10% | 55% |
| All | 21% | 19% | 60% |
Total donor-advised fund assets, gifts, and grants
DAFs are both a significant source of gift and grant activity for community foundations. They also tend to reflect broader growth trends. DAF asset levels and fundraising totals both decreased from 2021 levels, while grantmaking totals continued to climb. (n=193)
| Total | |
|---|---|
| Assets | $38,053,992,278 |
| Gifts | $9,232,315,036 |
| Grants | $9,386,967,822 |
Donor-advised fund flow rate
With fundraising totals decreasing across the field while grantmaking increased, DAF flow rates, or grant to gift ratio, increased for all size cohorts. 43 percent of all respondents reported a DAF flow rate higher than 100 percent, meaning those community foundations all granted more from their DAFs in 2022 than they brought in as gifts. This is markedly higher than 2021, when roughly 20 percent of respondents reported flow rates higher than 100 percent.
Distribution rates
DAFs hosted by community foundation consistently maintain higher distribution rates than other fund types. Just about half of all respondents reported an aggregate DAF distribution rate of 10 or more percent. Overall distribution rates tend to be higher at larger community foundations, who have a higher proportion of both DAFs and non-endowed funds than their smaller peers. (n=190)
| Size of Foundation | Donor-Advised Funds | Whole Foundation |
|---|---|---|
| <$25M | 6% | 4% |
| $25M - $50M | 6% | 4% |
| $50M - $100M | 12% | 5% |
| $100M - $250M | 11% | 6% |
| $250M - $500M | 11% | 8% |
| >$500M | 14% | 9% |
Inactive donor-advised funds policy
Over 80 percent of respondents said they have a policy in place to activate dormant DAFs, defined by the passage of a predefined period of time without the recommendation of a grant by the donor advisor. (n=177)
| | Percentage |
|---|---|
| No response | 11% |
| No policy | 15% |
| Policy exists | 73% |
How many years until a DAF is considered inactive?
All but two community foundations take some action to activate a dormant DAF after five years pass without the recommendation of a grant, and 80 percent of respondents said they take action after three years. In cases where the time horizon extends to 10 or more years, it is likely because the donor stated an intention to have their fund grow before making larger grants in the future. (n=140)
Steps taken to address inactive donor advised funds
Nearly all respondents said that they will first attempt an appeal to a DAF holder to activate the fund after a predefined period of time after which the fund is considered dormant. Follow-up step are often included in the donor's original fund agreement; many said that those steps included one or both of distributing DAF dollars in alignment with the donor's original intent and transferring the funds into the community foundation's unrestricted funds. (n=144)
What's the idea behind the survey?
CF Insights responds to a hunger for shared knowledge among community foundations. Learn more about how this survey helps us do that.
Questions?
