Tax Day 2023!

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


  1. It’s no puzzle. A DAF allows you to get a current-year tax deduction for appreciated assets without incurring capital gains taxes. As the end of the year approaches, you review your positions, find ones that have appreciated significantly, and donate them to the DAF. In doing so, you transfer the benefit of those gains to the Church without being taxed on them yourself, while simultaneously getting a personal deduction based on the appreciated value. It’s a win-win. (Because the DAF is the donor to the Church and the donation is not tied to any membership record number, members who are tithing in this way will often show $0.00 in tithes when they go into tithing settlement.)

  2. MoPo, that’s right. I just don’t see the advantage to doing it that way as opposed to donating the appreciated assets directly to the church (which provides the same tax benefits in the same year). DAFs are most helpful when you want to give to charity in the future and don’t know what to do now. (I mean, I guess if you have appreciated assets that you’re afraid are going to fall in value and, for some reason, are opposed to prepaying your tithing, maybe then?)

    Making in-kind donations to the church seems pretty straightforward:

  3. Sam, no, there’s no *tax* advantage to doing it through a DAF, rather than as direct in-kind donations. But the latter is a PITA, requiring coordination of your brokerage firm with the Church or, even worse, getting actual stock certificates and mailing them in. If you contact LDS Philanthropies, they will encourage you to use a DAF: . (I expect that’s easier for them, too.)

    Another practical advantage is versatility, in that donors are usually not only giving to the Church. Most 501(c)(3)s are set up to accept donations from Fidelity Charitable (which either sends a direct deposit or, for low tech charities, a mailed check), but smaller ones don’t have the personnel or know-how to deal with in-kind donations of securities. A DAF allows you to put all of your donations in one big pot and then dole it out with the click of a mouse to a range of charities. Easy-peasy. You may be putting some assets in for immediate donation (e.g., tithing), with the remainder sitting around for future donations (and continuing to appreciate on a tax-free basis, resulting in—one expects—a larger eventual aggregate donation).

    Another practical advantage is in the tracking of donations, come tax preparation time. If you’re routing donations to dozens of charities, it’s much easier to keep track of that in one place, with one donation statement, rather than documenting all of the direct donations (whether cash or in-kind).

  4. My guess is since the church has made electronic and even hidden (at Ward level) donations the need for a 3rd party pass thru has waned.

  5. Thanks MoPo. That’s helpful.

  6. And Sute, that may well be. Do you remember offhand when the church made it easier to donate electronically?

  7. No problem. As evidence of how easy DAFs make donating to small charities, I just ordered a donation (in honor of Sam Brunson, Esq.) to By Common Consent Inc., which appears to be unable to accept EFTs, so the check will be in the mail. : )

  8. (Clarificaiton: It’s to By Common Consent Press Inc.)

  9. “Making in-kind donations to the church seems pretty straightforward:”. no. making a dtc gift is a major pita. as mopo said, you are vastly underestimating the hoops.

    also, salt lake is one of the major phones sites for fidelity, has a large lds contingent and there is a company match when donating at certain threshholds to cgf.

  10. Raymond Winn says:

    This OP, and its subsequent comment thread, are an ideal illustration of why it is so informative and interesting to follow BCC. Thanks! to all concerned for the continual stream of posts on this site.

  11. People I know who can make six-figure charitable gifts pay attention to timing. In small ways like doubling contributions in even years and itemizing and making few cash donations and claiming the standard deduction in odd years. And in large ways like a lifetime gift as part of an estate plan or a one-time major gift related to a liquidity event. I’m not at all surprised to see the Church on the list.

    As for ranking, I’d guess DAF-to-church money to be relatively stable in the aggregate, year on year, which means the variation in ranking is more likely due to larger variation in other places. A fair amount of giving in those top charities is influenced by wars and natural disasters, for one example.

  12. clarifying for davidl137 –
    Fidelity has a large number of employees in downtown SLC and also American Fork.

  13. Larry the Cable-guy says:

    I’m recalling the shift to online donations largely occurring 5-6 years ago.

    Not sure if there’s any causation involved, but certainly a very clear correlation with your data.

  14. Slight tangent WRT online donations, quite a few years ago now, here in the UK, there was a system glitch which meant that come tithing settlement the bishop/ clerks weren’t able to see the donations of quite a few members, that would normally have been visible. DH was one such, but was in the habit of printing out his own statement. It was only when we attended tithing settlement we found out that the ward hadn’t had access. Certainly went some way to explain the peculiar behaviour of the then clerk at an earlier testimony meeting when he laid into ward members because he couldn’t believe how few people, and especially who wasn’t paying tithing.. he was released not long after that rant, as might be expected…

  15. J. Mansfield says:

    Davidl37 above mentioned company match, and that is something that came to my mind as well. I am pretty ignorant in financial matters, but I was reminded of my brother-in-law who worked for Fidelity for many years and arranged his tthes to the church in such a way that Fidelity made a donation to the church that matched his tithes. At some point the company decided to stop donating to churches, but would still match his tithes with a donation to some other entity. So he arranged to have the match of his tithes donated to a high school wrestling program. What, if anything, that has to do with DAFs I do not know.

  16. ideasnstuff says:

    Hedgehog: Reminds me of when President Nelson was interviewed by Spencer W. Kimball before he was called as a stake president. Elder Kimball had Brother Nelson’s tithing report from the previous year, showing an inexplicably small amount for a well-compensated heart surgeon. Brother Nelson stated that he was a full tithe-payer and Elder Kimball mentioned that he thought someone in Brother Nelson’s position would have a significantly higher income than what the report showed. Brother Nelson simply restated that he was a full tithe payer, Elder Kimball dropped the matter and the interview continued. He was called as the Stake President. As it turns out, Brother Nelson had tithed in two different wards, and Elder Kimball only had the report for the ward in which Brother Nelson had lived for a month or two, reflecting only a small fraction of his true income. From the 2003 biography of Elder Nelson by Spencer Condie.

  17. nobody, really says:

    Donating through a DAF would be a great option if somebody suspects that the bishop or clerk lacks confidentiality skills, if either one of those two is a competitor, or a relative, or whatever. There’s a long list of reasons why keeping financial information confidential would be a very good thing.

    I don’t appear to live beyond my means, and I’m not filthy-rich, but I’m probably one of the higher earners in my ward. (That ain’t saying much.) There’s still no end of ward members approaching me for loans, business opportunities, charity needs, and even bail. I imagine it would be even worse if a ward clerk was announcing “You guys, you have no freakin’ idea how much bank Brother Nobody is pulling down. Ain’t nobody should be making that much dough. There’s kids in the ward what needs chemo, and he’s blowing all that cash on Mr Mac, Cafe Rio twice a month, and braces for his kids. Ought to be ashamed, being so selfish. King Benjamin would have a word or two to say about that….”

  18. The confidentiality motivation that “Nobody, Really” mentions may or may not be common for DAF-users, but it makes sense. While I’ve never seen bishopric members or ward clerks with loose tongues about financial matters (whether high tithe-payers, on the one hand, or recipients of financial or Bishop’s Storehouse assistance, on the other), in a church this size it surely happens from time to time. The other side of that coin is declaring oneself a full tithe payer when the local records show $0 in tithing, which—if folks were talkers—could also give rise uncharitable speculation or comment. (I kind of like the “alms in secret” that DAFs enable; but some may prefer to send a more visible signal of their commitment to local leaders.)

    The related issue that concerns me more is that of the Church’s resources and ability to secure the personal information (including detailed donation history) that it collects from and maintains on members. While the major cyberattack from six months ago reportedly missed donation histories, it’s not unimaginable that a future attack could get at that. If fraudsters had the full slate of members’ personal info, including donations, it would be very easy to target high-income members.

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