The growth of Donor Advised Funds in the UK 

Donor advised funds originated in the USA in the 1930s. Since then, variations on the American DAF concept have arrived in the UK, with the first one,  the CAF Charitable Trust, being introduced in the 1970s. That trust shared similar characteristics with an American DAF but with greater flexibility, donor choice, and investment options.  The market for tax-efficient giving vehicles, like the DAF, has grown significantly in the UK ever since.

At an overall level, donor advised giving has grown over the last few years, with increased popularity within the UK – something which providers expect to continue. This growth is evident by the contributions made to funds. Overall, there has been a 51% increase in contributions over the period 2013/14 – 2015/16. In turn, funds transferred to a chosen charity have also continued to grow; whilst total charitable assets held within the funds have exceeded £1 billion amongst the nine main providers in the UK.

Donor Advised Funds in the UK – contributions in

As mentioned, donor advised giving is on an upwards trajectory. Overall contributions into these donor advised funds have grown year-on-year for the past three years. Indeed, contributions rose to a high of £371.8 million in 2015/16 as a result of a £37.1 million increase since 2014/15 (showing 11% growth). 

Donor Advised Funds in the UK – grants out

The amount of money granted from donor advised funds to charities also increased  in 2015/16 to its highest level, reaching £279.5 million in 2015/16, an increase of 5% since 2014/15. This means that in 2015/16, around 75% of the money taken into donor advised funds was paid out to charitable causes. What makes DAF accounts attractive though, is the flexibility to retain the assets during an accumulation phase while they can grow or be loaned out for social impact.

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