Schwab Charitable, one of the nation's leading donor-advised fund organizations, reported strong results for Fiscal Year 2013, reflecting growing interest by individuals, families and their independent registered investment advisors (RIAs) in becoming more strategic about when and how they give. As of June 30, 2013, Schwab Charitable assets under management were $4.8 billion and grants to charities for the fiscal year totaled more than $600 million, 55% and 12% growth from the previous year, respectively. The organization also doubled its new accounts in fiscal year 2013, underscoring the popularity of donor-advised funds as part of holistic financial and charitable planning.
“There is a virtually limitless opportunity to help individuals and families make a significant philanthropic impact in the world around them, and we are committed to providing them and their RIAs with ways to make giving easy, impactful and sustainable,” said Kim Laughton, president of Schwab Charitable. “Our results this past fiscal year are heartening as they point to an upward trajectory in charitable giving. As we look ahead we are confident this trajectory will continue. A robust stock market, higher tax rates and uncertainty around itemized deductions all encourage individuals and families to consider using a donor-advised fund to support their favorite philanthropic causes, while reducing their tax bills.”
A donor-advised fund allows investors to contribute cash and/or a variety of appreciated assets 1 to a charitable account to realize the greatest possible tax benefits and then support their favorite charities over time. Serving a wide range of philanthropic investors, Schwab Charitable’s account sizes range from $5,000 to more than $600 million.
Majority of RIAs offer charitable planning - deepening client relationships and bolstering business growthAccording to the 2013 RIA Benchmarking Study from Charles Schwab2, released last week, 54% of all firms with assets under management (AUM) of $25 million or more currently offer charitable planning services and of those, 85% indicated that at least some of their clients are using those services, and 34% are considering offering charitable planning in the future. For those firms with an AUM between $50 million and $100 million, 50% are considering offering charitable planning in the next 12 -18 months. Sixty percent (60%) of the Best-Managed Firms 3 in the study are currently already offering charitable planning and an additional 30% are considering offering charitable planning. “Charitable giving is a very personal and often emotionally-driven decision process, and it’s wonderful to see so many RIA/client relationships that are deep enough to discuss the charitable causes and organizations that matter to an individual or family,” said Laughton. “RIAs who help clients think about their philanthropic goals with the same level of purpose that they think about retirement, college savings or even insurance goals are providing a differentiated level of advice and client service that can translate into real business results and a new standard of best practice.”
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