Schwab Charitable pegs 33% rise in grants to market strength, tax changes

Group says 66% of contributions to donor-advised funds in fiscal 2019 were non-cash assets

Jul 23, 2019 @ 1:51 pm

By InvestmentNews

Schwab Charitable said it facilitated over $2.4 billion in grants to over 83,000 charities during its 2019 fiscal year, attributing the results in part to current market valuations that can provide tax benefits to those making donations.

That represents a 33% rise in grant value and a 26% increase in the number of grants over fiscal 2018, the public charity said in a release.

Its most widely supported grant recipients were Feeding America, Planned Parenthood, Doctors Without Borders, Campus Crusade for Christ and Salvation Army.

Schwab said 66% of contributions to the underlying donor-advised funds were non-cash assets, including publicly traded securities, restricted stock, real estate and privately held business interests, which were the most popular. It said strong market performance this year encouraged donors to contribute appreciated assets in order to maximize their tax benefits as well as their charitable impact.

(More: Tax reform: 7 essential strategies for financial advisers)

"Some donors also realized that they could benefit from 'bunching' or concentrating their charitable contributions" as a result of the recent tax-law revision, Schwab said. Individuals who employ this strategy make charitable contributions in higher-income years and then recommend grants to charities of their choice over time, enabling donors to itemize charitable deductions in some years and benefit from the increased standard deduction in other years, Schwab said.

Schwab said donors born before 1946 recommended an average of 12 grants, each averaging $12,000, to eight charities. Baby boomers (born 1946-64) recommended an average of 10 grants, with an average value of $5,000 each, to seven charities. Generation X (1965–84) recommended an average of seven grants, with an average grant value of $7,000, to five charities.

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