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NPT UK’s Fourth Annual UK Donor-Advised Fund Report Shows Steady Growth in DAF Sector

Author John Canady, Chief Executive Officer

January 14, 2020

2018 marked the sixth year in a row of growth in contributions to donor-advised funds, according to the 2019 UK Donor-Advised Fund Report released last month by NPT UK. We provide this exclusive analysis annually as a public service to our donors, the philanthropic sector and those interested in donor-advised funds.

Our report, the leading source for donor-advised fund data in the UK, shows that DAFs grew at a lower rate than in previous years, most likely due to the political and economic uncertainty surrounding Brexit. This year’s most notable findings include:

Contributions to DAF accounts reached an all-time high of £521.6 million, an increase of 9 per cent compared to £479.5 million in 2017. This was lower than the compound annual growth rate of 16.3 per cent for contributions from 2014 to 2018.

Grants from DAFs to charitable organisations dipped slightly by 2 per cent to £311.9 million in 2018 from £317.7 million. The compound annual growth rate from 2014 to 2018, however, was a robust 8.9 per cent.

Charitable assets under management in DAFs surged to more than £1.5 billion in 2018, an all-time high. This 18 per cent increase over the prior year outpaced the compound annual growth rate from 2014 to 2018 of 16.3 per cent.

First established in the UK in the 1970s, DAFs are a uniquely flexible philanthropic vehicle sponsored by a charitable organisation. Donors make an irrevocable charitable contribution—including complex, illiquid assets—to their DAF account, receive immediate tax relief and then recommend grants from their DAF over time.

With regulations constantly evolving, using a DAF ensures that a donor’s charitable activity is compliant with the latest rules. Advisors, including lawyers and accountants, are recognising and recommending DAFs because they eliminate many of the burdens of operating a separate charitable entity. DAF sponsors take care of compliance, management and administration, enabling donors to focus on giving, be it in the UK or around the world. To learn more about DAFs and trends in our sector, read the full report here.

 

John Canady, CEO of National Philanthropic Trust UK, has 25 years of experience working across the business, nonprofit and government sectors. He specializes in creating and managing philanthropic funds for donors and family offices around the world who wish to base their philanthropy from the UK.

 

NPT does not provide legal or tax advice. This blog post is for informational purposes only and is not intended to be, and shall not be relied upon as, legal or tax advice. The applicability of information contained here may vary depending on individual circumstances.

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