Advisors see giving surge in late 2023 extending into 2024

Christina Nash of Knox Grove Financial and Robert Pearl of G&P Financial

Schwab Charitable says donors granted more than $6.1 billion to charity in 2023, a year-over-year increase of 31 percent.

Recession fears did not stop donors from giving to charitable causes in 2023. But will their hearts – and wallets – remain open in 2024?

Schwab Charitable revealed Tuesday that donors granted more than $6.1 billion to charity in 2023, an increase of 31 percent year over year. Schwab Charitable also saw donors support more than 127,000 charities through more than 1 million grants, which marked an 11 percent increase in the number of grants to charities compared to 2022.

A major chunk of those donations occurred during the so-called “Giving Season” between Giving Tuesday on November 28 and December 31, a period during which donors recommended approximately 250,000 grants to charity totaling $1.5 billion.

As to their granting behaviors, Schwab Charitable said 71 percent of donors’ grant recommendations didn’t specify a purpose, so organizations could use the grants where needed most, while 69 percent of existing donors granted to a new organization that they had not previously supported and 87 percent of donors granted within their home state.

Schwab Charitable works with more than 3,700 advisors, and 67 percent of account assets at Schwab Charitable in 2023 were associated with a professional investment advisor.

Roshan Weeramantry, co-head of wealth management at Helium Advisors, said that he saw an increase in charitable giving to donor-advised funds and charitable remainder trusts at the end of 2023, spurred by the S&P 500’s surge of 11.7 percent during the fourth quarter.

“When clients see valuations increase and are also charitably inclined, their tendency to feel comfortable adding to charitable vehicles increases,” Weeramantry said. “Our clients understand that they are harvesting gains, mitigating taxes and ultimately getting more dollars to great charities that they love and want to support.”

Christina Nash, founding partner and financial advisor at Knox Grove Financial, which is part of Osaic, saw an increase in charitable gifting among her high-net-worth clients last year, primarily by using their required minimum distributions for gifting.

“I suspect we will continue to see further increases in annual gifting with the advancements in donor-advised funds,” Nash said.

Similarly, Kara Brockmeier, certified financial planner at Premier Financial Partners, said that charitable giving is “top of mind” for her clients, and she projects the trend will continue in 2024.

“We generally recommend opening a donor-advised fund for any client who values charitable giving and lists it as a financial goal, regardless of net worth. Why? Because you can easily open a donor-advised fund with as little as $50, making them super attractive for all client types,” Brockmeier said.

Robert Pearl, co-founder and wealth advisor at G&P Financial, said that many of his clients made significant charitable gifts via qualified charitable distributions from their IRAs in 2023. He expects such behavior to continue into 2024 thanks to the rising wealth in the country, much of it controlled by an aging populace.

“More baby boomers are open to planning advice, not just investment advice,” Pearl said. “If there are no changes in the federal estate tax exemption, annual gifting exclusion, or tax policy, I would expect charitable giving to continue to increase in the coming years.”