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Vanguard Charitable forecasts donations of over $1 billion by the end of 2019

Vanguard Charitable accepts all kinds of assets from donors including stocks, bonds, boats or Bitcoin.

Jane Greenfield, president of Vanguard Charitable, based in Malvern, Pa.
Jane Greenfield, president of Vanguard Charitable, based in Malvern, Pa.Read moreVanguard (custom credit)

It’s not too late to donate in 2019 — and you can give away all sorts of eclectic assets, including patents, insurance policies, cryptocurrency, boats, and buildings.

We checked with Vanguard Charitable Foundation to find out what sorts of “illiquid,” or hard-to-sell assets, they’ve accepted on behalf of donors.

For the first time ever, Vanguard Charitable in 2018 disbursed $1 billion worth of grants made by donors and is on track to surpass that in 2019, according to president Jane Greenfield.

“We’ve received lots of unique and interesting assets over the years, although the financial assets tend to be the most common,” she said in an interview.

Vanguard Charitable is a nonprofit that administers donor-advised funds — a tax-effective vehicle to grant assets to charity. Founded by Vanguard in 1997 as an independent 501(c)(3) organization, Vanguard Charitable has granted nearly $10 billion to charity.

One donor gave away a patent for a wax covering used on apples and cherries to keep them fresh and prevent bruising.

“It’s a very specific asset but a nice example. A typical process starts with the donor conversation and finding a purchaser for the asset. We try to minimize transaction costs and keep our holding period as short as possible,” said chief financial officer Mark Froehlich. “If we accept something on the front end, we know there’s an ability to sell. We don’t want to accept an asset that can’t be sold because we’re making grants. The money has to be liquid.”

Greenfield said Vanguard Charitable accepts mostly securities, such as stocks, bonds, partnership holdings in hedge funds, and private equity funds.

“We tend to see insurance policies quite a bit. Donors have insurance they no longer need. They donate it to us, and we can exchange it for cash surrender value. That’s popular,” she said.

Vanguard Charitable accepts the assets into a donor-advised fund. Donors don’t pay capital gains taxes on the gift and that translates into a larger dollar-value donation.

“Without paying taxes, the donation amplifies the gift. More money goes out the door to nonprofits,” Froehlich said.

It’s easy to open a donor-advised fund, whether through Vanguard Charitable, Fidelity, the National Philanthropic Trust in Jenkintown, or a smaller outfit such as Triskeles Foundation.

Vanguard Charitable’s minimum to open a donor-advised fund is $25,000, while other outfits allow you to do that for as little as $3,000. Your Vanguard Charitable donor-advised fund must make at least $500 in grants every three years.

Vanguard Charitable’s administrative fees start at 0.60% annually for funds of up to $500,000 in assets, plus an investment fee starting at 0.03% annually.

According to National Philanthropic Trust, grants from donor-advised funds accounts to qualified charities totaled $23.42 billion in 2018, an 18.9% increase, compared with $19.70 billion in 2017.

Contributions to these funds totaled $37.12 billion in 2018, up about 20% from the previous year.

Trends in charities

There are other ways to donate besides donor-advised funds.

Although charitable giving overall is on the decline, one place it’s on the rise is through the workplace — possibly due to the push for more “corporate purpose,” or because technology enables real-time giving.

According to data from Benevity, the top 10 charities supported by corporations and their employees are:

  1. St. Jude Children’s Research Hospital

  2. Planned Parenthood

  3. National state cancer societies

  4. Red Cross

  5. Leukemia & Lymphoma Society

  6. Doctors Without Borders

  7. American Civil Liberties Union

  8. National state heart and stroke foundations

  9. PTA California Congress of Parents and Teachers

  10. Boys and Girls Club umbrella

The biggest news stories of the year — immigration, women’s rights, climate change, gun safety, and income inequality — prompted the largest spikes in giving.