Fidelity Charitable grants soared in first half even as market cratered

Fidelity Charitable donors set a new record for grants in the first half of 2022, even as the stock market cooled down and inflation ramped up.

The nation’s largest grant-maker saw record support for nonprofits from its donors during the first six months of the year as they recommended nearly a million grants to charity totaling a record $4.8 billion, up 11% from $4.3 billion in 2021's first half. The increase in the first half follows a record-setting $10.3 billion granted in all of 2021 and flies in the face of a 21% drop in the S&P 500 over the same six-month period, as well as inflation hitting a 40-year high in June.

Donor-advised funds offer tax advantages that can't be matched by simply writing a check. Using a donor-advised fund, an investor is able to earmark money for charitable donation and then grow those funds while deciding where to grant it.

“The continued growth in granting we saw during the first half of the year shows the value of donor-advised funds as a sustaining force for the sector even when times get tough,” Jacob Pruitt, president of Fidelity Charitable, said in a statement. “Despite rising inflation and market volatility, Fidelity Charitable donors have continued to lead with generosity and are providing record-high support to nonprofits.”

Charitable giving can often suffer during periods of rising economic uncertainty. For example, charitable giving in America dropped 12% during the country's last prolonged recession, from 2007 to 2009, according to Fidelity.

That said, donor-advised funds can offer some insulation from market pressures, which could be contributing to the donor growth across-the-board. For example, Schwab Charitable reported earlier this week that its donors granted $4.7 billion to charity in the past 12 months, a 27% jump.

The humanitarian crisis in Ukraine was a major driver of granting in the first half of 2022. In total, donors have recommended more than $128 million in grants specifically earmarked to Ukraine aid efforts, according to Fidelity. International Medical Corps, for example, saw a more than tenfold increase in the number of donor-advised funds that recommended a grant compared to the first half of 2021, said Fidelity.  

“It is heartening to see so much support for nonprofits working on the ground, particularly in areas facing crises,” Fidelity Charitable’s Pruitt said. “Nonprofits also are facing pressures from inflation and a down market, so it is a bright spot to see that Fidelity Charitable donors remain committed to ongoing support for the causes they care about.”