6 trends shaping philanthropy show the growth of smarter giving

If you gave to charity or helped someone pay it forward last year, you’re in good company: More than 322,000 Americans recommended 2.3 million grants to charity through Fidelity Charitable in 2023, according to our annual Giving Report. These donors bolstered nearly 199,000 nonprofits through the donor-advised fund, proving that smarter giving not only matters to Americans, its prominence is growing.

In a 10-year look-back over rocky markets and a global pandemic, the DAF and the adoption of smarter giving practices that maximize philanthropy are quickly becoming a critical part of holistic wealth management. In fact, investors are increasingly rounding out their financial toolbox of IRAs and 529 plans with the DAF.

Keeping this in mind, here are six trends shaping philanthropy today:

1. Donors are staying the course

The economy is always a consideration, and this year was no different as concerns continued. But the impact of smarter giving steadily continued to grow with donors leaning into the DAF as a sustaining force for philanthropy. This was echoed in a recent National Philanthropic Trust report, which noted, “When total charitable giving in the U.S. declined in 2022 and returned to pre-pandemic levels, DAF donors actually accelerated their DAF giving.”

Fidelity Charitable donors recommended an average of 11.8 grants per DAF, also known as a Giving Account, last year, with an average grant size of more than $4,600. As a collective, our donors recommended $11.8 billion in grants to charity in 2023.

2. They’re doing so with loyal and open support

Americans have favorite charities they’ve been giving to for years and have proven to be steadfast to the causes that move them: In 2023, nearly 80% of grants went to charities donors had previously supported. Most grants (96%) included the account name or the recommending donors’ names and addresses.

3. Giving comes in all shapes and sizes across the wealth spectrum

With no minimum to open an account, more than half of Giving Account balances were below $25,000 and just 10% greater than $250,000.

4. Savvy donors are leveraging long-term appreciated assets

Cash isn’t always king. By donating appreciated stock, many Americans are giving more to charity than if they sold the stock and then made a cash donation.

Last year, 63% of contributions to Fidelity Charitable were in the form of non-cash assets, and contributions of non-publicly traded assets, such as restricted stock, private equity, and limited partnership interests, totaled $1.4 billion—with more donors maximizing their impact.

Donating long-term appreciated securities directly to charity could eliminate capital gains taxes on the appreciation of the securities—making it possible for donors to give more than if they sold the assets and donated the proceeds. Those tax savings then become a direct source of new funding for charitable causes.

5. Participation in impact investing is growing rapidly

Maybe it’s the sway of younger investors. Maybe it’s the influence of current events. Whatever the reason, interest in finding ways to make giving dollars go further is on the rise. One example: Not only has the amount of funds in Fidelity Charitable DAFs invested for impact nearly tripled in the past five years, but grants to impact-investing nonprofits have nearly doubled, to $70.4 million. These charities have missions that may include supporting social enterprises, microfinance, or community development, and returns generated by the organization’s work may be recycled to enable new investment.

6. Companies are reaching their employees through values-based giving programs

According to Giving in the Workplace, another recent study by Fidelity Charitable, most employees (86%) say it’s important to work for an employer with values that align with their own, particularly millennials (91%), who are now the largest generation in the workforce. Companies are responding: More than 500 corporate donor-advised funds actively recommended an average of 65 grants each in 2023. Many companies are also looking for creative ways to use the DAF, as well as other tools, to support and encourage employees to engage in giving.

Since 1991, Fidelity Charitable donors have supported more than 406,000 of the nation’s estimated 1.48 million nonprofits—with more and more choosing the donor-advised fund to sustain and grow their impact on the world. These savvy philanthropists have continued to stay the course even in times of continued economic uncertainty, leveraging smart strategies to make their dollars go further. The opportunity is on the table. Are you taking it?

For more philanthropy trends and behavior statistics, explore the full annual report.