Fidelity Charitable sets $4.8B record in grants for 6 months

NEW YORK (AP) — Donations from Constancy Charitable climbed 11% to a document $4.8 billion for the primary half of 2022, the nation’s largest grantmaker introduced Wednesday.

The expansion in payouts from Constancy’s donor-advised funds — which let donors get pleasure from tax deductions and funding features on their donations earlier than they offer the cash away — paints a far sunnier image about philanthropy than different current studies.

The Giving USA report launched final month discovered 2021 donations had been down 0.7% when adjusted for inflation. That was an indication that the sector is mostly struggling to maintain tempo with elevated wants attributable to larger costs and international crises just like the pandemic and the struggle in Ukraine.

“Particular person donors are considerate once they contribute to their donor-advised funds, letting the expansion of these funds affect their giving,” Constancy Charitable President Jacob Pruitt advised The Related Press. “They can provide extra on the finish of the day and never solely are they giving extra, however they’re giving to a wide range of completely different causes.”

Constancy Charitable donors earmarked greater than $128 million in grants to Ukraine assist efforts within the first half of 2022, Pruitt stated. Emergency reduction group Worldwide Medical Corps noticed the variety of Constancy Charitable donors present them a grant bounce greater than 1000% in comparison with the primary half of 2021, whereas chef Jose Andres’ meals safety nonprofit World Central Kitchen grew greater than 500%.

Equally, Schwab Charitable introduced Tuesday that its grants by means of its donor-advised funds had been up 27% to over $4.7 billion in its 2022 fiscal yr, which ended on June 30.

Pruitt stated Constancy Charitable has seen some slowing in donations in current months, however that it’s laborious to inform whether or not that can proceed. He stated knowledge on the amount of cash invested into donor-advised funds in 2022 to date wouldn’t be out there till the top of the yr.

“When the market is down and there may be volatility, our donors step up,” he stated. “Generosity will proceed.”

Nonetheless, “ Gilded Giving 2022,” a brand new report on donations launched Tuesday by the Institute for Coverage Research, says the growing recognition of donor-advised funds is distorting philanthropy and the form of charities that obtain cash.

Chuck Collins, co-author of the report and the Institute’s director of the Program on Inequality and the Frequent Good, stated we have now entered an period of “top-heavy philanthropy,” the place rich individuals dominate charities as a result of nearly all of individuals are struggling economically and are much less capable of afford to present. He stated rich individuals are likely to deal with donations to foundations that they management or legacy presents — massive donations to universities and museums that end in buildings being named after them so as to add to their reputations for generations.

In response to the report, donations over $1 million in 2021 went primarily to foundations that the donors managed, donor-advised funds and faculties and universities. It notes that lower than half of American households now donate to charity, down from 68% simply 20 years in the past.

“The extra that rich individuals form the priorities of philanthropy, the much less we see individuals giving on to these serving to of their communities,” Collins stated. “We might see that change with the rise of oversight. We must always repair the design flaw.”

Laws requiring those that use donor-advised funds to complete making a gift of the cash inside 15 years to be able to keep their revenue tax deduction was launched within the Senate final yr by Republican Sen. Chuck Grassley of Iowa and Impartial Sen. Angus King of Maine, who caucuses with the Democrats. One other proposal would let cash stay in donor-advised funds for 50 years, however it will not be eligible for an revenue tax deduction till it’s donated.

Constancy Charitable’s Pruitt stated he helps laws that encourages donors to actively make grants from their donor-advised funds, although he factors out that almost all cash in these accounts is already donated inside 5 years.

“The fear,” he stated, “is unintended penalties.”

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Related Press protection of philanthropy and nonprofits receives help by means of the AP’s collaboration with The Dialog US, with funding from Lilly Endowment Inc. The AP is solely answerable for this content material. For all of AP’s philanthropy protection, go to https://apnews.com/hub/philanthropy.