Donor-advised funds (DAFs) are continuing to grow in the UK, with provider National Philanthropic Trust UK (NPT UK) granting £12.2 million on behalf of its donors last year.
This represents a 37% increase in the value of charitable grants from its donors to the previous calendar year, and almost a three-fold increase compared to 2020. The volume of grants made by NPT UK has also risen year on year, peaking at 421 in 2022.
Donor-advised funds, or DAFs, are a philanthropic fund established under an umbrella charity that administers the fund on behalf of the donor. Donors can make charitable contributions, receive tax benefits and recommend grants from the fund over time.
Combined with grants donated since 2020, NPT UK has distributed £25.7 million through 864 grants from DAFs since the start of the pandemic.
In addition, NPT Transatlantic, which is a UK/US dual qualified DAF, distributed over £40 million in grants in the last calendar year, representing a 78% (£17.8 million) increase in donations from pre-pandemic giving in 2019.
John Canady, CEO of National Philanthropic Trust UK said:
“These figures represent the continuous growth of donor-advised funds across the board in the UK. They are indicative of a greater awareness among the wealth management industry of the role that DAFs can play as an effective alternative to setting up a private trust or foundation.
“Our data also shows that DAF donors are reacting positively to charitable needs despite a difficult economic climate. More donors are contributing larger amounts to DAFs with both the value and volume of grants significantly increasing since the start of the pandemic. As the charitable sector continues to operate under enormous pressure and keep pace with demand for their services, we know that donors want easy and more flexible ways to give – DAFs provide that option.”
Impetus is one of the charities that benefits from DAFs. Harriet Gugenheim, its Head of Philanthropy and Partnerships commented:
“Too many young people in the UK who come from disadvantaged backgrounds are prevented from reaching their full potential. We use the donations we receive to change lives by making sure the money is spent on interventions that are evidence-based and deliver real impact. Donor-Advised Funds have made a major contribution to the organisations and charities that we support, helping us to give young people from disadvantaged backgrounds the chance to succeed in school, work, and life.”