National Donor-Advised Fund Sees Increase in Donation of Appreciated Securities, Private Foundation Conversions & Customized Solutions for the Wealthy
Public Company Information:
SAN FRANCISCO--(BUSINESS WIRE)--Schwab Charitable, one of the nation’s largest and fastest growing national donor-advised fund organizations, announced today that both contributions to and grants from its donor-advised fund will likely reach record levels in 2010.
As of September 30, contributions for 2010 were $610 million, up 274% from the same period in 2009 and up 90% from the same period in 2008. Grants to charities totaled $262 million for the same period, up 15% from 2009 and up 3% from the previous all time high in 2008.
“Americans are among the most generous individual givers in the world and there are positive signs on the horizon that make us optimistic about the prospects for the 2010 giving season,” said Schwab Charitable President Kim Wright-Violich. “More and more, people are embracing the benefits of donor-advised funds, which allow donors to realize great possible tax benefits from charitable giving while simplifying the administrative aspects of their philanthropy.”
Schwab Charitable has continued to benefit from an increase in gifts of appreciated securities, which rose from 68% to 74% of total contributions in the last two years, driven by a healthier stock market.
The stock market has increased over 70%1 from its lows in early 2009, and many donors are choosing to donate appreciated securities to their donor-advised funds in order to maximize the tax benefits while meeting their philanthropic goals. Donating appreciated securities held for more than one year carries two distinct tax benefits, enabling donors to take an immediate charitable tax deduction while also avoiding capital gains taxes on any unrealized gains2.
Schwab Charitable’s growth has been fueled by individuals turning to their independent investment advisors for help in achieving their philanthropic goals. Many wealth advisors appreciate Schwab Charitable’s customized solutions for their clients’ charitable giving, including the ability to accept and recommend sophisticated investments.
Growth has also been driven by an increase in transfers and conversions from private foundations and supporting organizations, which see donor-advised funds as a simpler, lower cost and more private alternative to these charitable vehicles. During 2010, Schwab Charitable has attracted more than $200 MM in assets from private foundation and supporting organizations, generally reducing their operating expenses. Many of these donors made contributions to a donor-advised fund account through Schwab Charitable’s Private Foundation Conversion Service.
Looking forward, the Giving Pledge announced by Bill Gates and Warren Buffet to inspire wealthy families to commit to giving a majority of their wealth to philanthropy has driven increased interest in donor-advised funds as a low cost, flexible and private component of a charitable strategy for the very wealthy. In addition, higher income investors who have converted their traditional IRAs to Roth IRAs this year are expected to contribute more to donor-advised funds and other charities to help defray taxes associated with the conversion.
“Schwab Charitable always strives to give individuals and those who advise them the tools and services to be smart, strategic and successful with their philanthropy,” says Ms. Wright-Violich. “We will continue to improve our service offering so that more Americans can more easily make their own giving pledges through a donor-advised fund.”
During the past year, Schwab Charitable introduced a number of innovations which proved popular and helped to drive its growth including Expanded Investment Options and Customized Grant Letterhead. Schwab Charitable has also continued to attract interest in its Double Give Microfinance Guarantee Program. The program, in collaboration with Grameen Foundation, has delivered $10 million in loan guarantees in its first phase, creating over 100,000 microloans in developing markets around the world.
About Schwab Charitable
Created as a national donor-advised fund with a mission to increase charitable giving nationwide, Schwab Charitable has raised over $4.7 billion and has facilitated over $2 billion grants to charity since inception. Donor account sizes range from $5,000 to over $200 million. For more information, visit www.schwabcharitable.org.
Unless otherwise noted, source of donation statistics is Schwab Charitable.
1 As measured by the S&P 500, 3/6/09-10/26/10
2 Please consult with your accountant for personalized tax advice
Morrison Shafroth, 720-470-3653
Communications Strategy Group