Median payout rates at donor-advised funds remained steady during the Great Recession, as did a new measure called “flow rate,” according to the results of a study by researchers at the University of Pennsylvania and University of Memphis.
Based on an analysis of Internal Revenue Service data from nearly a thousand DAF sponsor organizations over the period 2007-2016, the report, Understanding Donor-Advised Funds: How Grants Flow During Recessions, found that grants totaling more than $13.5 billion were awarded through DAFs in 2015, with a median payout rate of 13 percent – a rate that, with the exception of 2008, when it rose to 16 percent, remained fairly flat between 2007 and 2015.
In addition, the study calculated the flow rate – the ratio of total grant dollars awarded to total contributions received in a given year – and found that the median flow rate in 2015 was 87 percent. That rate also remained fairly flat between 2007 and 2016, with the exception of 2009, when it peaked at 103 percent, meaning that the median DAF sponsor granted out more money than it received that year. During the first two years of the Great Recession – 2008 and 2009 – total contributions to DAFs dropped 36 percent, while total grant dollars awarded fell by only seven percent.
*Note that rates reported here as flat would, would reflect an increase if the last two years’ of data were included.