Ten of America’s 20 Top Public Charities Are Donor-Advised Funds

Public charities are nonprofits that rely on a broad base of donors for their revenue. Private foundations, on the other hand, are usually created and supported by just one or two major donors. DAF sponsors qualify as public charities, and so receive the same preferential tax treatment as working charities.

This is a big part of the reason why DAFs are growing explosively. The assets held in U.S. DAFs have grown by 411 percent over the past 10 years — rocketing from $45 billion in 2012 to $229 billion in 2022. And DAFs now rake in one quarter of all U.S. individual charitable giving.

Of particular concern are DAF sponsors that are affiliated with for-profit Wall Street financial corporations. As we have documented, these commercial DAFs provide enormous publicly-subsidized tax benefits to their high-rolling contributors while actively encouraging the warehousing of charitable wealth.

Commercial sponsors have particularly benefited from DAFs’ rising popularity. The Fidelity Charitable Gift Fund, for example, has been the most successful charitable fundraiser in the country for the past seven years.

In 2022, Fidelity extended its lead by pulling in $15.2 billion — more than three times more than the top working nonprofit, Feeding America. Fidelity’s two closest competitors, the National Philanthropic Trust and Schwab Charitable, are coming up fast on its heels, bringing in $13.2 and $9.8 billion, respectively. All three are leaving the rest of the field far behind.

We counted the Silicon Valley Community Foundation and the Chicago Community Trust as DAF sponsors because contributions to DAFs made up 93 percent and 97 percent, respectively, of their total incoming contributions in 2022.

Some of the operating nonprofits on this list — such as the United Way and Stanford University — sponsor DAF programs as well, but we did not categorize them as sponsors because their DAF programs are tiny compared to their other fundraising.

Also worth noting: When you look only at cash donations, DAFs have actually done even better relative to working charities than our ranking shows.

We compiled our rankings by pulling contribution information from the tax returns of the largest DAF sponsors and universities in the U.S., and then combining that with Forbes‘ list of the top-fundraising non-DAF, non-university charities in 2022.

Both our list and Forbes‘ list include non-cash donations, however, which can inflate revenue numbers, particularly for relief and healthcare organizations. If this ranking only included cash donations to Feeding America, for example, it would have slipped out of the top 20.

Through the charitable tax deduction, taxpayers subsidize contributions to DAFs by up to 74 cents on the dollar. This gives us all an interest in making sure that the money stored in DAFs is actually used for the greater good. There’s no reason we need to enable DAFs to function as tax avoidance vehicles for the wealthy or a personal enrichment opportunity for commercial money managers.