Schwab Charitable Celebrates Its 20th Anniversary with Another Fiscal Year Granting Record
Encouraged by strong market performance, donors of all generations gave generously as grants from advised accounts ticked upward
July 23, 2019, SAN FRANCISCO—Schwab Charitable™, one of the largest national providers of donor-advised funds and other philanthropic services, facilitated over $2.4 billion in grants to over 83,000 charities during fiscal year 20191. This represents a 33 percent increase in dollars granted compared to the 2018 fiscal year, and a 26 percent increase in number of grants. Feeding America, Planned Parenthood, Doctors Without Borders, Campus Crusade for Christ, and Salvation Army were the most widely supported grant recipients.
"Our donors consistently find ways to make a more profound impact on the causes they care about and this year they reached an incredible milestone" said Kim Laughton, President of Schwab Charitable. "Over an incredible twenty-year span of growing generosity, our donors have recommended a total of more than $12.5 billion in grants to 150,000 charities. Thanks to strong market performance over the majority of the last twelve months and a growing familiarity with the relatively new tax law, donors found the 2019 fiscal year to be an especially good time to give."
Donors unlock appreciated assets and new tax benefits
As the S&P 500 reached an all-time high by the end of fiscal year 2019, many investors had the opportunity to support their charities of choice with highly appreciated assets. Individuals who own appreciated investments held for more than a year may achieve significant tax benefits by donating those assets to charity via a donor-advised fund. In fiscal year 2019, 66 percent of contributions to Schwab Charitable were non-cash assets, including publicly traded securities, restricted stock, real estate and privately held business interests, which were the most popular. Donors are encouraged to contribute appreciated assets while market performance is strong this year to maximize both their tax benefits and charitable impact.
More than a year after the Tax Cuts and Jobs Act was enacted, some donors also realized that they could benefit from "bunching" or concentrating their charitable contributions, including contributions of appreciated non-cash assets. Individuals who employ this strategy make charitable contributions in higher income years and then recommend grants to charities of their choice over time. This enables some donors to itemize charitable deductions in some years and benefit from the increased standard deduction in other years.
Generosity spans generations
Schwab Charitable donors range in age from Millennials through Baby Boomers and the Greatest Generation. In fiscal year 2019, older generations generally gave more, with greater frequency:
- Donors from the Greatest Generation (born before 1946) recommended an average of 12 grants, each averaging $12,000, to eight charities.
- Baby Boomers (born 1946 – 1964) gave only slightly less, recommending an average of ten grants, with an average grant value of $5,000, to seven charities.
- Generation X (born 1965 – 1984) recommended an average of seven grants, with an average grant value of $7,000, to an average of five charities.
- Millennials (born 1985 – 2004) made an average of six grants, each with an average value of $4,000 to three different charities.
"We are proud that Schwab Charitable account holders of all ages are very active givers, from those who have spent their entire adult lives committed to philanthropy, to younger individuals who are just starting out," added Laughton. "Through our conversations with donors, we find that Millennials are particularly interested in increasing their impact by combining philanthropic giving with socially responsible investing. This younger, passionate donor cohort will re-shape philanthropy in the years to come."
Advised accounts demonstrate robust giving
At Schwab Charitable, almost three-quarters (72 percent) of donor-advised fund account assets are associated with a professional investment advisor. Additionally, in fiscal year 2019, donors with advised accounts recommended an average of 11 grants to charities.
Financial advisors are well-suited to help donors give with greater impact. For example, when discussing clients' annual goals or rebalancing client portfolios, advisors can help identify appreciated assets that would make tax-efficient charitable gifts. Advisors can also be a valuable resource for donors who seek personalized giving strategies that may maximize tax-efficiency under the new law. According to the latest RIA Benchmarking Study from Charles Schwab, more than three quarters (79 percent) of advisory firms include charitable planning in their primary service offering, a notable increase from just over two-thirds (67 percent) of firms five years ago2.
"Advisors tell us that they promote charitable planning and advice as a way to start conversations that lead to referrals and deeper and broader relationships with key clients," said Fred Kaynor, Vice President of Business Development and Marketing at Schwab Charitable. "At Schwab Charitable, our goal is to empower advisors to incorporate charitable planning into everyday financial management for the benefit of their clients, their firms, and the nonprofit community."
About Schwab Charitable
Schwab Charitable is a donor-advised fund established as a service for individual investors to help increase their charitable giving. Schwab Charitable serves a wide range of investors and has been a pioneer in enabling registered investment advisors to manage the investments of donor-advised fund accounts. Schwab Charitable also offers a private foundation conversion service for private foundations considering a donor-advised fund as a complementary or alternative charitable vehicle. For more information, visit schwabcharitable.org.
A donor's ability to claim itemized deductions is subject to a variety of limitations depending on the donor's specific tax situation. Consult your tax advisor for more information.
Schwab Charitable is the name used for the combined programs and services of Schwab Charitable Fund, an independent nonprofit organization, which has entered into service agreements with certain affiliates of The Charles Schwab Corporation. Schwab Charitable Fund is recognized as a tax-exempt public charity as described in Sections 501(c)(3), 509(a)(1), and 170(b)(1)(A)(vi) of the Internal Revenue Code. Contributions made to Schwab Charitable Fund are considered an irrevocable gift and are not refundable. Please be aware that Schwab Charitable has exclusive legal control over the assets you have contributed. Although every effort has been made to ensure that the information provided is correct, Schwab Charitable cannot guarantee its accuracy. This information is not provided to the IRS.
1Fiscal year 2019 refers to July 1, 2018 – June 30, 2019.
2Self-reported results for all firms with $250 million or more in AUM from the 2015 and 2019 RIA Benchmarking Study from Charles Schwab.