As I was searching, trying to find an appropriate Tax Day 2023 topic to post on (not as easy as you’d think when you’ve been doing this for a while), I came across Fidelity Charitable‘s annual Giving Report.
What is Fidelity Charitable? It’s a sponsor for donor advised funds (a topic I’ve written about here). A DAF is essentially an account that a person sets up within a charitable sponsor. That individual can donate money to the account and take a charitable deduction for the donation in the year it’s made. The DAF itself doesn’t do charitable things, though; rather, it holds the money and, at some point, distributes it to actual charities. As a legal matter, the sponsor (that is, the entity like Fidelity Charitable) has the right to determine where to send the money. But the donor gets to “advise” about where the money should go. As long as the donor’s advice is within certain parameters (essentially, it goes to a 501(c)(3) organization), the sponsor will generally follow the donor’s advice.
In essence, a DAF is like a charitable foundation, only without a number of constraints the foundation faces.
So what does this have to do with Mormonism? Well, looking at almost a decade of Giving Reports, for a number of years, the Church of Jesus Christ of Latter-day Saints was a top-20 recipient of funds from Fidelity DAFs.
Prior to 2015, Fidelity didn’t list any recipients. Rather, it describes the charitable categories DAF money went to. (See, e.g., 2013 and 2014.) But in 2015, it started listing the top 20 recipients. And in its 2015 report, the church sat at number 12 (behind Doctors Without Borders, Salvation Army, United Way, Habitat for Humanity, American National Red Cross, Wounded Warrior Project, St. Jude Children’s Research Hospital, the Nature Conservancy, American Cancer Society, American Heart Association, and Harvard University).
In 2016 (and I should note that the year of the report shows the prior year’s numbers), the church had risen to number 11. In 2017, it returned to number 12. In 2018, it dropped to number 16. The next year, it fell one more spot to 17. In 2020, it was number 18. By 2021, it had fallen out of the top 20 and, in the ensuing two years, it hasn’t risen back up.
I don’t have an explanation for the change. I doubt it has anything to do with the whistleblower, for a large handful of reasons, including that the trend was moving the direction for several years before and because we don’t have a sense of absolute vs. relative dollars (that is, the giving from Fidelity DAFs to the church may have stayed the same or even increase, but other DAF giving may have increased more).
But also, and perhaps more critically, it’s not clear to me why people were giving to the church from DAFs in the first place. The big advantage to a DAF is that you can accelerate deductions before you decide what you want to do with your charitable dollars. But most people tithing, and otherwise donating, to the church already know what they’re going to do. They can donate to the church now and take their deduction.
It’s possible that people are putting more into a DAF in a given year than they plan to give to the church to get over the standard deduction. But I’m skeptical of that too—the average DAF account is six figures. DAFs are a private foundation substitute for the wealthy and the upper-middle-class, the type of people who are already itemizing every year.
So it’s a puzzle. Why was the church a big recipient of DAF giving? No idea. And why did it fall out of the list of top recipients? I also don’t know.
But I do know that today is Tax Day and, if you haven’t filed your tax returns yet, you probably shouldn’t be reading this right now!
Photo by Markus Winkler on Unsplash