Donor-advised Funds: New Opportunities for Charities and Wealth Managers

Donor-advised funds, a vehicle that has been available in Canada since the early 1950s, can now be accessed through thousands of financial advisors. As a result of the involvement of major banks, mutual fund companies and dealers, not to mention community foundations, assets in these funds have grown to almost $6 billion and are on track to reach $10 billion by the end of 2026. At the same time, annual grants to operating charities have reached almost $1 billion a year and this activity has picked up since the beginning of the pandemic.

Against this background, Investor Economics is publishing its second report on donor-advised funds. This report, a companion to the initial report published in 2018, examines trends in donor-advised funds through a number of different lenses using both publicly-available data and the results of a proprietary survey of foundations that host these funds. The findings in the report are both encouraging and concerning; encouraging in that more donors and more advisors are involved in the growth of donor-advised funds but concerning in that there has been no improvement in access to these funds by donors of modest means. This report is essential reading for all types of foundations as well as the wealth management industry for these funds are the point where philanthropy and wealth management intersect.