Contributions to Schwab’s donor-advised fund soaring

The Charles Schwab Corp has seen contributions to its donor-advised fund climb dramatically from the past couple of years, an indication that the stock market rebound is influencing investor sentiment.
As of Sept. 30, year-to-date contributions were $610 million, up 274% from a year earlier and up 90% from the first three quarters of 2008.
The 2010 contributions are also up 17% from the pre-crisis period in 2007, which saw $520 million in contributions. For all of 2007, total contributions to Schwab’s donor-advised fund were $1 billion.
“The stock market is a better indicator of charitable giving overall than the economy,” Kimberly Wright-Violich, president of Schwab Charitable, said in an interview at Schwab’s Impact conference in Boston.
Some experts had predicted that charitable donations would decrease this year because the absence of an estate tax would make it more attractive for high-net-worth investors to give money to heirs, rather than to charities. But that doesn’t appear to be the case, Ms. Wright-Violich said.
“There is $300 billion that goes to charities and of that, 10% comes from estates,” she said. “The rest comes from living individuals.”
Ms. Wright-Violich also doesn’t believe that the expected increase in income taxes is prompting the jump in charitable giving among investors.
“You either believe taxes are going to go up, and that you should wait to donate until next year, or you believe that higher taxes will suppress the economy and thus affect your income and ability to donate,” she said. “I don’t think anyone is many any decisions yet based on what taxes will be.”
The Schwab donor-advised fund has more than $4.7 billion in assets and has facilitated more than $2 billion in grants.