Philanthropists have not let the uncertainty and volatility that has plagued the markets recently deter them from charitable giving. Instead, they have responded with unprecedented generosity that surpasses anything some giving experts have ever seen, according to Schwab Charitable.
Schwab Charitable donors granted more than $6.1 billion to charity in 2023, "a remarkable" increase in granting of 31% year-over-year, Fred Kaynor, managing director of marketing, relationship management, and strategic partnerships at Schwab Charitable, said in an interview.
Donations to charity regularly increase from one year to the next, especially when the market is doing well, but Kaynor said, “I have never seen an increase comparable to this.”
“Despite recent economic uncertainty, political turmoil and market volatility, our donors demonstrated their commitment to giving back with yet another historic year of granting,” Sam Kang, president of Schwab Charitable, said in a statement. “As we enter Schwab Charitable’s 25th year, we are proud to see donors continuing to give at record levels and are eager to see the impact they will accomplish this year.”
Donors supported more than 127,000 charities through more than one million grants, an 11% increase in the number of grants to charities compared to 2022, Schwab Charitable said in a year-end review released Tuesday.
At the end of the fiscal year on June 30, 2023, Schwab Charitable announced donors had surpassed $5 billion in annual grants for the first time. This has now been followed, six months later, by donors surpassing $6 billion in calendar-year annual grants to charities for the first time in the organization’s history, Schwab Charitable said.
Schwab Charitable is a sponsor of donor advised funds. As this giving vehicle becomes better known, financial advisors become more important to the planning, Kaynor said.
“We work with a lot of advisors, who are vital to the process,” Kaynor said. “Advisors can help donors create a giving strategy that goes beyond writing individual checks.” Through donor advised funds, money for charity is set aside ahead of time and is then available to be granted to charities when needed. The money is invested while it is in the donor advised fund and grows, making more money available for giving, Kaynor noted.
Professional advisors were involved with 76% of the funds held by Schwab Charitable. At the same time, the percentages that were donated to charities without naming a specific use, which was 71% in 2023, grew, Kaynor said.
Sixty-nine percent of donors granted to a charity they had not previously supported and 87% of donors gave to organizations within their home states. These number, too, are growing. “More and more donors are recognizing the needs charities have for unrestricted grants,” Kaynor said.