Schwab Charitable Facilitates More Than $1.5 Billion in Grants in Fiscal Year 2017

Strong markets, potential tax reform, and generous donors help drive record granting

Monday, July 10, 2017 5:00 am PDT

Dateline:

SAN FRANCISCO
"Donors are particularly interested to know how donor-advised funds can help them combine tax and estate planning with investing, so they can provide more support to their favorite causes over a longer period of time."

SAN FRANCISCO--(BUSINESS WIRE)--Schwab Charitable™, one of the largest national providers of donor-advised funds and other philanthropic services, facilitated a record $1.57 billion in grants in fiscal year 20171, a 34% increase from the prior fiscal year. Schwab Charitable donors supported over 65,000 charities and recommended over 309,000 grants, up 29% from 240,000 grants in Fiscal Year 20162.

“This is the third year in a row in which our generous donors recommended more than $1 billion in charitable grants,” said Kim Laughton, president of Schwab Charitable. “We are proud to help them create more impact by making giving simple and tax-smart. In the midst of a sustained market rally and with tax reform on the horizon, donors who value cost, tax efficiency, and convenience are using donor-advised funds to maximize their tax benefits and charitable impact simultaneously.”

A recent survey of Schwab Charitable’s donors and their financial advisors3 suggests that tax reform could significantly affect charitable giving. According to the survey, approximately half of American donors (44%) expect tax reform to take effect in 2018, and a similar proportion (45%) plan to change the amount they give to charity if lawmakers reduce the tax benefits of giving. Some donors are preparing for potential changes by taking advantage of the current tax code and increasing charitable giving this year.

“In the last fifteen years, we have seen donors motivated more by their personal values than tax benefits, but it is undeniable that tax benefits make a difference, especially when they help charitable dollars go further,” Laughton added. “Donors are particularly interested to know how donor-advised funds can help them combine tax and estate planning with investing, so they can provide more support to their favorite causes over a longer period of time.”

With the S&P 500® Index having more than tripled over the past eight years and up more than 70% over the past five years4, donors who own appreciated non-cash investments or assets have the opportunity to put them to work for charity. And their advisors have an opportunity to demonstrate value in an area that clients may not have expected it. Almost three quarters (71%) of American donors recognize that appreciated assets make more tax efficient donations than cash, but about the same proportion (73%) also give with cash or credit cards. Advisors can help clients over this “behavior gap” by identifying highly appreciated investments or assets and offering convenient ways to unlock them for more impactful and tax-efficient giving.

In fiscal year 2017, over 66% of contributions into Schwab Charitable accounts were non-cash assets. Contributing appreciated investments or assets held for more than one year to a public charity, including to a donor-advised fund, generally allows donors to eliminate capital gains tax on the sale of those assets and increase their giving by as much as 20%.

By increasing the convenience and tax efficiency of charitable giving, Schwab Charitable helps individuals maximize their philanthropic impact. Sixty-six percent of Schwab Charitable donors say they give more than they otherwise would because they have a donor-advised fund account.5 Schwab Charitable also helps donors achieve greater impact by enabling them to invest their account balances with the goal of increasing the amount available for grants to charity over time. Core Schwab Charitable accounts offer 14 diversified investment pool options, and larger accounts may recommend registered investment advisors to manage their portfolios6. Since Schwab Charitable was founded, investment growth has generated over $2 billion in additional funds to support clients’ philanthropy.

The S&P 500 Index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries. Standard & Poor’s, the company that maintains the index, uses a variety of measures to determine which stocks are listed in the index. Each stock is represented in the index in proportion to its total market value.

Indexes are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly.

About Schwab Charitable

Schwab Charitable is a donor-advised fund established as a service for individual investors to help increase their charitable giving. Since its inception in 1999, Schwab Charitable has facilitated over $8 billion in grants to approximately 113,000 charities on behalf of its donors. 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 accounts2. 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, including a short video describing the benefits of donor-advised funds, 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.

1 Fiscal year 2017 refers to July 1, 2016 – June 30, 2017
2 Fiscal year 2016 refers to July 1, 2015 – June 30, 2016
3 Schwab Charitable survey of donors and registered independent financial advisors, June 2017
4 As of July 7, 2017
5 Schwab Charitable donor survey, December, 2016
6 Professionally-managed accounts are available only through independent investment advisors working with Schwab Advisor Services™, a business segment of The Charles Schwab Corporation serving independent investment advisors and including the custody, trading and support services of Charles Schwab & Co., Inc. Although donors may recommend an advisor, Schwab Charitable must approve the recommendation. Advisors must meet certain eligibility requirements and adhere to Schwab Charitable fee and investment guidelines. You may request a copy of the investment guidelines by calling (800) 746-6216.

(0717-7YLV)

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