RIA Rising

Fidelity Charitable sees generosity peaking earlier this year

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Usually the big donations by high-net-worth investors don’t start until November or December, when they begin positioning themselves for the following spring tax season. That seems to be changing, according to data from Fidelity Charitable, the nation’s largest donor advised fund by asset size.

For the first half of 2011, Fidelity Charitable saw $512 million in contributions to its donor advised funds, up 12 percent year over year, while grants to nonprofit groups totaled $604 million, a 14 percent increase. (The fund’s name has been changed from Fidelity Charitable Gift Fund, the company said.)

“This is record-breaking activity for this time in the year, and it reinforces that donors are starting their charitable planning earlier,” Fidelity Charitable President Sarah Libbey said in a statement. Fidelity Charitable ended its fiscal year on June 30 with $5.6 billion in assets, up 29 percent from a year earlier. Donors recommended more than $1.2 billion in grants to non-for-profit groups, up 15 percent from 2010.

Schwab Charitable reported record assets of $3.1 billion as of June 30, up 25 percent from a year earlier. Grants to charities totaled $519 million for the fiscal year, up 23 percent.

Part of what’s lifted the giving are the stock market gains that followed the financial crash. At Fidelity, appreciated securities made up 59 percent of total contributions to the funds in the first half of 2011, up from 51 percent a year earlier. Schwab and Fidelity also are seeing more complex assets being contributed by donors, such as illiquid securities and partnership interests. Contributions of complex assets at Fidelity more than tripled in the first half of the year and accounted for 8 percent of contribution dollars, the company said.

Donor advised funds are growing in popularity with HNW investors who prefer their more flexible and less complicated structures to those of private foundations. Some funds allow the money to be invested in portfolios managed by the donor’s financial advisor.

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