Unlocking Generosity: The Generosity Trust Exceeds Industry Grant Rates

A donor-advised fund can be a wonderfully advantageous machine to have in your financial gym.  It can afford you flexibility, clarity, and strong tax advantages on your philanthropic journey.  However, like any useful machine, it can easily end up in the corner of the room in favor of a new Peloton.  Here’s a wild stat: At any given time, there’s approximately $250 billion sitting in donor-advised funds across America. Sometimes that money is intentionally “parked” and invested to grow giving capacity, and sometimes it’s just simply forgotten about. 

Donor advised fund organizations can occasionally take a bad rap for sitting on large piles of cash.  In other words, “If you say you’re about generosity and supporting the non-profit community, why are you looking so fat and happy?”  DAF critics point to the payout rate of donor-advised funds as one of the reasons for this reality. The payout rate of a donor-advised fund is the percentage of assets distributed every year. The more money that is granted to charitable organizations, the higher the payout rate.

In 2023, the average payout rate for donor-advised funds was 23.1%. During that same year, the payout rate of The Generosity Trust was 41%. In other words, the Generosity Trust grants more than its peers.  This has been a consistent trend.  If you examine the previous year, the national payout rate in 2022 was 27.3% while The Generosity Trust payout rate was 39%. A large portion of this money stays in Chattanooga through grants to charitable organizations doing worthwhile work in the community.

We like those numbers, in part because they keep us in the generosity gym.  We believe that generosity, like any faith muscle, requires a little working out.  Paul reminds us in Philippians to “work out our faith with fear and trembling.”  It’s easy for donors to get complacent, and it’s just as easy for DAF organizations to get complacent.  Most people say they prefer working out with a partner, and we feel like we’ll see the best results when we’re working this out in partnership with our donors. Mutual encouragement will continue to unlock greater generosity!

It’s important to remember that every dollar at The Generosity Trust will ultimately end up in the hands of a qualified charitable organization. It’s not a matter of “if” these funds will end up in the hands of a nonprofit organization, only “when.”

One of the reasons for the high payout rate from The Generosity Trust is the continued emphasis on granting as the core of our mission. We provide events, groups, and resources to inform and inspire donors to give. Our giving circles are a great example of this kind of group fitness. Groups like our Young Givers Circle convene to learn about different causes in the community and collaborate in making meaningful grants to local organizations. 

If you’re interested in joining our generosity gym, a Giving Fund at The Generosity Trust is our most popular donor-advised fund since there are no fees or minimums. To learn more about the funds we offer, please visit www.thegenerositytrust.org.  We would count it a privilege to walk with you on the journey.