Top Top Three Philanthropy Stories of 2014

With 2014 at an end, it’s time to look back at the top stories in philanthropy for the year.

These are the stories that, in this writer’s humble opinion, had the greatest impact for donors and those who are charitably inclined.

And so, without further ado, in reverse order:

#3 – Low Interest Rates All Year

Not widely reported in the philanthropic community, the continuation of historically low interest rates made for tremendous charitable opportunities for donors.

The applicable federal rate (AFR) – used in the calculation of charitable deductions for certain types of gifts – remains near all-time lows.  The rate ranged in 2014 between 2.0% and 2.4%, making this another great year to take advantage of charitable lead trusts or retained life estate gifts.  In 2012 and 2013, the AFR hit 1.0% several times, and while the rate has bumped up since then, this is still an excellent time to take advantage of these rates and put together gift vehicles like this one.

#2 – The Continuing Rise (and Dominance) of Donor-Advised Funds

When the Chronicle of Philanthropy released their latest Philanthropy 400 list of the nation’s top charities in October, some in the philanthropic community were unhappy to see that donor-advised funds (DAFs) had taken four of the top 10 spots, including the #2 spot for Fidelity Charitable.  (The others in the Top 10 were Schwab Charitable Fund at #4, Silicon Valley Community Foundation at #8, and Vanguard Charitable Endowment Program at #10.)   Fidelity Charitable is expected to overtake United Way as the nation’s #1 charitable organization soon.

As reported in the Chronicle:

The most stunning changes [over the prior year’s list] were those achieved by the groups that offer donor-advised funds, which outstripped the percentage gains of nonprofits like United Way and the Salvation Army that depend largely on middle-class donors.  Schwab Charitable Fund increased donations by 165 percent, to nearly $1.9-billion. It, too, is a new organization, created in 1999. And Vanguard Charitable Endowment Program grew by nearly 19 percent. It was founded in 1997.

Several critics of donor-advised funds, and particularly DAFs sponsored by financial services companies, spoke out against this trend and encouraged Congressional action.  Others (like me) argued in favor of DAFsmore than once.

The fact remains that DAFs are increasingly popular – never more so than this year.

#1 – The ALS Ice Bucket Challenge

shutterstock_212062033No story this year had the widespread impact on philanthropy than what happened over a number of weeks in late July and August.  The ALS Ice Bucket Challenge was like nothing that came before it.  It started off innocently, spread locally, then nationally, and at its peak it was ubiquitous.  Celebrities, athletes, CEOs of major companies, and an army of others took to social media to document themselves being doused with a cold bucket of ice water, all in the name of ALS.

Despite criticism that the challenge was not doing anything to promote philanthropy, the numbers would prove those claims wrong.  By the end of it, The ALS Association had raised over $100 million, the fortunate beneficiary of the challenge, with hundreds of thousands of new donors to be cultivated.  The overwhelming public exposure of a relatively obscure disease was unprecedented.  Imitators soon jumped on the “challenge” model in an attempt to replicate a modicum of ALS’s success.

In the end, the ALS Ice Bucket Challenge was a genie in a bottle, unleashed at just the right time in just the right way.  While other trends and movements in philanthropy will certainly come along, 2014 will be marked as the year the ALS Ice Bucket Challenge, over the course of just one month, dominated the philanthropic landscape.

Comments? Contact me on Twitter @juanros.

Share This Post
Print this pageShare on FacebookShare on LinkedInTweet about this on TwitterShare on Google+Share on TumblrEmail this to someone