Advisors are expected to play a key role in clients' awareness and adoption of donor-advised funds, says Sarah Libbey, president of the Fidelity Charitable Gift Fund. Libbey, who heads up the largest donor-advised fund, says advisors often like the funds because they help clients simplify their giving, and allow for easy anonymity for donors who want to keep a low-profile.
Benjamin Pierce, president of the third-largest donor-advised fund, Vanguard Charitable, is predicting a growth rate exceeding 10% for both assets and grant distributions for his fund that had about $2.22 billion in assets under management at year end. In 2010, the fund's grant distributions increased 50% from $361 million a year earlier, underscoring donor's generosity.
Kim Wright-Violich, president of second-largest donor-advised fund, Schwab Charitable, is expecting grants to end-user charities to increase 40% to 45% in 2011. Schwab Charitable has about $3 billion in assets under management. Earlier this month, Schwab Charitable reported record 2010 contributions by its donors of more then $1 billion, more than double the amount in 2009.
Wright-Violich is expecting contributions into donor-advised fund accounts of $775 million to $1.2 billion in 2011, but notes predicting contributions can be tricky.
"There's no such thing as a typical year and one exceptionally large account can alter the numbers significantly," Wright-Violich says.
Not factoring in large accounts, stock market performance is the biggest predictor of donor-advised-fund performance, she says.
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