Schwab Charitable has reported that for fiscal year 2014, individuals granted out $822 million to more than 34,500 charities, an increase of 38% from a year earlier.
Between 1 July 2013 and 30 June 2014, individuals granted out $822 million, an increase of 38% from the prior fiscal year. This rapid growth comes on the heels of a 10% increase in grants for fiscal year 2013.
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"Our donors have absorbed the new tax policies that took effect in 2013 and they are encouraged by an improving economy and a strong stock market. As a result, they are increasing their giving and supporting a wide range of causes," said Kim Laughton, president of Schwab Charitable.
"Their donor-advised accounts give them a great way to unlock the value of their investments to give to their favorite charities, reduce their taxes and manage their giving simply and easily in one place."
Schwab Charitable also reported assets under management of $6.4 billion as of June 30, 2014. More than 45% of the funds contributed to Schwab Charitable accounts have been granted out to charities since inception.
Investors have contributed cash or a variety of appreciated assets1 to their Schwab Charitable accounts in order to support their favorite charities over time while realizing the greatest possible tax benefits. Money in the account is invested and grows tax-free until it is granted to charity.
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By GlobalDataSchwab Charitable Expands Investment Options
Schwab Charitable also announced that it will expand the investment options available to donors by adding a new Income Index Pool in August. This will bring the total number of investment pools to fourteen, including four that are allocated across multiple asset classes and ten dedicated to a single asset class.
The underlying mutual fund for the new Income Index Pool is the Dreyfus Bond Market Index Basic (DBIRX), chosen for its strong historical performance and low operating expenses.
"Underlying our investment pools is one of the largest selections of non-proprietary funds of any national donor-advised fund," says Barbara Benware, Vice President of Investment Oversight. "Our commitment to choosing best-in-class investment options from a variety of fund families gives our donors a wide range of investment choices to fulfill their giving strategies."
RIAs Support Interest in Giving
The number of Schwab Charitable accounts grew 17% in Fiscal Year 2014, as investors showed increasing interest in simple, tax-efficient charitable giving. Registered investment advisors (RIAs) have responded by making charitable planning an important part of financial planning and wealth management.
According to the 2014 Independent Advisor Outlook from Charles Schwab, charitable planning is one of the top three services offered by RIAs to supplement their core investment advisory business. Charitable planning now outranks estate planning in popularity, and falls just behind long-term financial planning and advice on employee-sponsored retirement accounts.2
"Charitable planning is becoming a natural part of the financial planning and wealth management discussion between independent investment advisors and their clients," says Laughton.
"Since many clients have appreciated assets in their portfolios, donor-advised funds are a natural solution to help investors simultaneously reduce their taxes and maximize the amount they are able to give to charity. Advisors strengthen their relationships with clients by taking part in such decisions because charitable causes and organizations matter a great deal to their clients."
