The largest charity in the United States has changed and the new charity in the top spot might surprise you. The United Way, which was ranked as the largest charity in 24 of the past 25 years, has been surpassed by Fidelity Charitable.
Fidelity Charitable is a “donor-advised fund” that enables donors to make contributions and immediately receive the tax deduction, and have the flexibility to make grants to charities of their choosing at any time in the future. Donor-advised funds can be viewed as private foundations for the middle class that are much easier and cheaper to open and administer.
Charities such as the United Way actually see the donor-advised fund as a good thing and not a competitor because they can receive donations from the fund. Last year, Fidelity Charitable had 132,000 donors recommend $3.1 billion in grants to support more than 106,000 organizations.
One reason donor-advised funds have grown so quickly is because of their ability to easily receive non-cash donations such as appreciated securities. Fidelity says about two-thirds of its contributed dollars last year were non-cash assets. Appreciated assets are the best type to donate because the donor can receive a double tax benefit – avoiding the tax on the appreciation and receiving a tax deduction.
Our company has been big advocates of the donor advised fund for several years as a way to encourage charitable giving while maximizing the tax benefits. Fidelity is the largest of hundreds of donor advised funds available including funds through the Community Foundation of Greater Des Moines for local Iowans.
Read the full Associated Press article here
Jason Gunkel, CFP®, CFA, CAP®