Donor-advised funds hold $328 billion as advisors weigh income-spike and complex-asset gifts

WealthManagement.com reported Oct. 14 that more than 1,485 donor-advised fund sponsors now hold about $328 billion in total assets. In 2024, contributions reached $89.6 billion and grants to charities set an annual record of $64.9 billion. The reporting describes DAFs as one of the fastest-growing methods of charitable giving in the United States.

One common DAF use is the income-spike client—a business owner selling, an executive exercising concentrated stock, or someone receiving a large bonus or inheritance, according to the article. The client contributes and claims the charitable deduction in the high-income year, then takes time to decide which organizations receive grants. The article says this scenario often first brings clients and advisors to a DAF.

Complex assets are the other fit the article details: privately held business interests, real estate, restricted stock and limited liability company interests. Small charities often cannot accept these assets directly because they lack planned-giving expertise. Contributing such an asset to a DAF well before a planned sale lets the client avoid capital gains tax on the appreciation and take a fair market value deduction. The sponsor liquidates the asset and pays out grants in cash, according to the article.

Sponsor-specific caveats matter before a client commits. Not every sponsor accepts every asset type, and sponsors assess each proposed gift through their own policies and due diligence before accepting it. The sponsoring charity may decline the suggested gift, and the more complex the asset, the longer the evaluation takes, according to the article. The article advises advisors to confirm capabilities first.

DAF adoption is also skewing younger. The article reports that DAFs show disproportionately higher adoption and active use among Millennials and Gen Z than among older generations, even though older, wealthier donors still hold most accounts because of historical wealth concentration.