Fidelity, Schwab donors set record for charitable giving in response to pandemic
Covid-19 also changed giving targets, as donors supported organizations that provided food and other necessities for people who experienced economic setbacks due to the outbreak.
Fidelity Charitable and Schwab Charitable donors gave record amounts of money to support non-profits in 2020, inspired by a desire to help those suffering during the pandemic, according to the firms.
Fidelity Charitable said its donors made 2 million grants totaling $9.1 billion to 170,000 charities last year, a 24% increase in the amount of money donated and a 31% increase in the number of grants compared to 2019, according to a report released Wednesday.
In a report in late January, Schwab Charitable said its donors gave 830,000 grants totaling $3.7 billion to nearly 100,000 charities — a 35% increase in the dollars donated and a 39% increase in the number of grants.
The pace and the amount of giving stood out compared to previous years, said Amy Pirozzolo, vice president and head of donor engagement at Fidelity Charitable.
“All of that was attributable to the pandemic,” Pirozzolo said. “Virtually everybody who has an account with us made a grant last year because they realized how great the need is. In the midst of all the sadness, it’s great to see how people are responding.”
In addition to the pandemic, donors also made contributions to charitable organizations in response to social justice protests over the summer, said Kim Laughton, president of Schwab Charitable.
A survey last month of Schwab Charitable donors showed that giving is consistent across four generations — millennials, Generation X, baby boomers, and greatest generation. On average, members of each group made 11 to 15 grants to support six to 10 charities.
“We saw people stepping up across the board,” Laughton said. “It was truly an extraordinary year for giving.”
The pandemic changed giving targets, as donors supported organizations that provided food and other necessities for people who experienced economic setbacks due to the outbreak.
Three charities that sponsor free food programs — Feeding America, Meals on Wheels and World Central Kitchen — jumped into the top 20 most popular for Fidelity donors in 2020. Feeding America also was the top charity Schwab donors supported in 2020.
“That shows the outpouring of support for people during difficult times,” Pirozzolo said.
Fidelity Charitable and Schwab Charitable are both independent organizations that manage charitable accounts. Those accounts are donor advised funds, which allow a donor to make a charitable contributions, receive a tax deduction and then distribute the money over time.
Laughton touted the flexibility and efficiency of DAFs for facilitating donors’ pivoting to charities that support pandemic victims. “This is when DAFs really shine,” Laughton said. “DAFs have become popular because they’re a simpler and easier way for people to give strategically.”
Critics say that DAFs can become repositories where money sits untouched for years after donors received their tax breaks for their initial contributions to the account.
Fidelity Charitable says $76 of every $100 put into a DAFs sponsored by the organization is granted within five years and $89 of $100 is granted within a decade. “These accounts are becoming the sustainer for the non-profit sector,” Pirozzolo said.
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