By the end of 2023, over a quarter trillion dollars was held in donor-advised fund (DAF) accounts, benefiting from immediate tax deductions while remaining unallocated. In 2023, donors contributed $59.43 billion to DAFs, disbursing $54.77 billion yet leaving $251.52 billion unspent. The stalled contributions result from IRS policies allowing immediate tax benefits without payout requirements. The growth of the DAF sector since the 1990s has led to commercial sponsors, which now benefit more from tax deductions than many major nonprofits, raising questions about the impact on charitable giving efficiency.
Over a quarter trillion dollars sits in donor-advised funds, where donors benefit from tax deductions while the money remains unallocated, hindering nonprofit operations.
The National Philanthropic Trust reported that in 2023, $59.43 billion was added to donor-advised funds, yet over $251 billion sat unspent, impacting vital nonprofit funding.
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