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US donor-advised funds enjoy healthy growth, says new report

A new report from the National Philanthropic Trust has revealed significant growth in the US' donor-advised funds (DAFs), with contributions to the funds - as well as grants from them - increasing.

The trust's 2016 Donor-Advised Fund Report analysed data from more than 1000 charitable organisations that administer DAFs.

DAFs are philanthropic vehicles overseen by public charities and are created to manage charitable donations on behalf of organisations, families, or individuals.

Donors can make a charitable contribution to the fund and receive an immediate tax benefit. They surrender ownership of anything they put in the fund, but retain advisory privileges over how their account is invested, and how it distributes money to charities.

The National Philanthropic Trust analysis found that grants from donor-advised accounts in 2015 totaled a record $US14.52 billion. Contributions to DAFs hit $US22.26 billion, which was also a record.

In percentage terms, contributions to donor-advised funds increased 11.4% on a year-over-year basis in 2015, while grants awarded from such funds increased nearly 17%.

The report also found that the total number of DAF accounts in the US. rose 11% percent in 2015, to 269,180. The average account size grew nearly 9% to $US235,727.

National Philanthropic Trust chief executive Eileen Heisman said the growth in DAFs could be linked to the shifting trends in philanthropy over recent years.

"Today's donors are highly engaged in their giving. Baby Boomers and Millennials in particular want a close connection to their philanthropy and to track their charitable impact. DAFs provide the flexibility and management donors are seeking," she said. "This shift in philanthropic strategies, from a dated federated funding model to contemporary DAFs, has occurred in the last 25 years. Similar to the Greatest Generation handing over the reins of the economy, the growth in popularity of DAFs is an example of how generations have shifted their approach to giving in America.

"The next generation wants to be closely connected to their philanthropy, which is reflected in the double-digit growth of DAFs. The steady grant payout rate across economic cycles demonstrates their dedication to giving."

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