What would a charity do with a chain of adult bookstores, a collectible set of surfboards or an antique Army tank?

Sell them, of course, and use the money for whatever cause the charity supports.

How about the interest in an orange grove, a shipment of soybeans or a quarter horse? Same thing.

Those are only a few of the more unusual items that have been donated to charity by philanthropic individuals in the last few years. Known as complex (or noncash) assets, these can be donated just like traditional stocks and bonds to donor-advised funds, which convert them into cash for various charities, according to Eileen Heisman, CEO of the National Philanthropic Trust and the author of a recent report on these funds. The trust, based in Jenkintown, Pa., is an independent, public charity that provides philanthropic expertise to donors, foundations and financial institutions.

“We’ve gotten a coin collection, a Chinese dining room set, a Picasso painting and diamond jewelry, among other things,” Heisman says. “When it is something unusual like this, it is usually the financial advisor, rather than the donor, who calls us, and it is likely to be the advisor who suggested the donation to his client in the first place.”

When noncash assets are given to charity through a donor-advised fund, the donor is usually the one who hires an independent expert to assess the value of the gift, which the fund then approves. The fund then makes the arrangements for insuring the item; determines whether there are any legal restrictions involved in the conversion; makes sure there is an exit strategy for converting the asset to cash; and then sells the item to a legitimate buyer. The money is then put in the donor’s fund account and is available to be used for grants to the donor’s preferred charities.

The managers of donor-advised funds say the amount of noncash assets being given to them has either held steady or increased, but also say such assets always make up far more than half of the donations received. They represent 60% to 70% of the donations made to Schwab Charitable, a public charity and donor-advised fund, says Fred Kaynor, the fund’s managing director of marketing, business development and strategic partnerships.

“Many philanthropically minded people have long-held, highly appreciated assets, including publically traded equities, that they want to donate to their favorite charities,” Kaynor says. “By giving the assets to a charity through their DAF, they do not have to pay the capital gains tax, which they would have to pay if they sold the assets outright. That makes more money available to give to the charity.”

Donor-advised funds allow benefactors to put money in during years when it offers them tax advantages or when they have the money available from a business conversion or some other economic windfall. The money grows tax-free inside the fund, and it’s then available to give as grants to a particular charity, a disaster-relief cause or a charitable project.

“Donors see [them] as a reliable, resilient way to set money aside for their philanthropic interests,” Kaynor says. Donor-advised funds have also seen an increase in “unrestricted” gifts—when the donor gives the money to a charity without designating exactly what it’s for, Kaynor says, adding that Schwab Charitable has seen a 72% increase in these grants over the last year.

Most advisors asking about noncash assets want to know how they are valued, says Colby Bircher, vice president and charitable planning consultant at Fidelity Charitable, a donor-advised fund that has taken in $10 billion in noncash assets since 1991—$2 billion of that realized in the last year, which shows this type of giving is increasing in frequency. Overall, Fidelity donors distributed nearly $10.3 billion in grants during 2021, a 41% rise from the levels before the Covid-19 pandemic and a 13% increase from 2020. A full 64% of those grants were unrestricted.

“As donor-advised funds grow, they are increasingly vital as a sustaining force of funding for charitable organizations, particularly in periods of prolonged economic hardship, as they enable donors to contribute the right asset at the right time to make a difference for the future,” says Jacob Pruitt, Fidelity Charitable’s president, in his fund’s annual report. “Many of our contributions are noncash assets, which are then liquidated into funds for granting—a tax-efficient strategy many donors are embracing in a rapidly changing economy.”

Inflation is having a somewhat negative effect on all forms of economic activity, including philanthropy, but giving overall is holding up, say donor-advised fund managers. “In 2021, the U.S. had a strong year economically and also experienced inflationary pressures not seen in several decades,” said Una Osili, associate dean for research and international programs at the Lilly Family School of Philanthropy at Indiana University, writing in the school’s annual report.

“While the stock market performed well in 2021, there were some economic factors that may have affected nonprofits’ operations, such as labor shortages, supply chain interruptions and ongoing high demand for services,” Osili continued. “The growth that we see for the majority of the [charitable] subsectors in 2021 is a reminder of the resilience and innovation that help to drive the philanthropic sector.”

Amir Pasic, the Eugene R. Tempel Dean of the Lilly Family School of Philanthropy, added in the report, “The environment for giving is evolving in multiple ways. Robust economic growth translated to strong performance by institutional forms of philanthropy such as foundations and corporations. Yet these economic indicators may differ from what most people experience in daily life. The broader effects of the pandemic may have shifted individual jobs, incomes, lifestyles and family and financial priorities, potentially affecting their giving habits.

“The novel circumstances of the current giving landscape,” Pasic continued, “underscore the need for this report and other high-quality research, which help us understand how widespread these changes are and how they are affecting philanthropy.”

“Philanthropy is what our country was built on, which is why it has been sustainable even in economic hard times,” says Jodi Rosen, director of business and product development, at Vanguard Charitable. “The current inflation only affects the world for a short time period. Philanthropists are looking at the long term.”

For the first half of this year, donors increased giving by 14% at Vanguard Charitable to just under $1 billion, Rosen says. The average grant is up 6% to $11,000. Possibly because of the pandemic and the invasion of Ukraine, which is causing such suffering, grants to human services causes are up the most, she says.

At the beginning of the Covid pandemic, Vanguard Charitable launched the Nonprofit Aid Visualizer, or NAVi, to help donors locate particular causes that aligned with their interests. This tool has now been expanded for the post-Covid era and is available to the general public on the Vanguard Charitable website. The tool was developed to help donors focus giving on “the communities that are being overlooked with charitable donations,” says Magda Guillen Swanson, research project strategist at Vanguard Charitable.

A donor-advised fund such as Vanguard Charitable is in a good position to help people convert a noncash asset, which they may not otherwise know how to turn into cash, when there’s a need for emergency services in the community, Rosen says.

Schwab Charitable says that it and other donor-advised funds reported an overall increase in giving for all types of assets, including cash, despite growing volatility and high levels of inflation. By the end of fiscal 2022 on June 30, Schwab Charitable donors had made an average of 13 grants each, supporting a total of 117,000 organizations, which was 11% more than they did during the previous fiscal year. A total of $4.7 billion was given to the fund in fiscal 2022, an increase of 27% over fiscal 2021.

What’s more, Schwab Charitable donors increased the proportion of grants not designated for a specific purpose. The unrestricted grants reached 72% of the total, “affording even more nonprofits greater flexibility to put donations toward immediate needs,” said Schwab’s report.

Donor-advised funds are now the fastest-growing philanthropic vehicle in the U.S., exceeding one million individual accounts in 2020, according to the National Philanthropic Trust’s report on the funds. Total giving to donor-advised funds reached $47.85 billion, an all-time high, in 2020, the latest figures available. Grants from the funds to qualified charities totaled an estimated $34.67 billion, another new high. At the same time, the average size of an individual donor-advised fund account is estimated to be $159,019.

The increases in giving are bolstered by the growing interest in donating noncash assets, Heisman concludes. “More than ever, donors are looking beyond their checking accounts for ways to support their favorite organizations and causes,” she says. “Complex assets have become a growing funding source for donor-recommended donor-advised fund grant-making. National Philanthropic Trust donors have supported more than a hundred thousand charities in the last five years, in part due to complex asset contributions.”

And that’s important for advisors as they embrace philanthropy advice using donor-advised funds as a vehicle. Kaynor says that in Schwab Advisor Services’ “RIA Benchmarking Study,” advisors listed charitable giving planning as the number one value-add service they provide.

And donor-advised funds have “become an integral part of their overall planning tools,” he says.