According to a new report by the Foundation Center, U.S. grant-making foundations raised their contributions to nonprofit organizations a record $4.3 billion in the last year. Foundations gave an estimated $27.6 billion in 2000, up 18.4 percent (14.6 percent after inflation) from the $23.3 billion in giving reported for 1999. Overall, giving has doubled since 1996.

Community foundations experienced the fastest growth in giving in the past year, followed closely by independent foundations. However, growth in corporate foundation giving slowed, reflecting declining corporate profits and stock values.

Private foundation giving up 20 percent

Independent foundations raised their giving by an estimated 20.1 percent in 2000, following a growth of 20.5 percent in 1999. In the past two years, giving increased by nearly 45 percent, the strongest two-year gain on record. Since 1995, giving has more than doubled.

Independent foundations, including family foundations and “new health foundations,” contributed an estimated $21.6 billion last year, up $3.6 billion from 1999. Exceptional growth in giving by the Bill & Melinda Gates Foundation (Wash.), combined with more than $100 million in gains by the Lilly Endowment (Ind.), David and Lucile Packard Foundation (Calif.), California Endowment (Calif.), and Robert W. Woodruff Foundation (Ga.), helped push 2000 giving increases ahead of moderately slower overall growth in independent foundation assets.

In 1999, the combined assets of independent foundations grew 16.6 percent, up from 15.7 percent in 1998 but down from 24.7 percent in 1997.

Corporate foundations increase giving 9 percent

Showing the effects of weaker corporate profits and a volatile stock market, giving by corporate foundations grew an estimated 9 percent in 2000—roughly half the increase reported for independent and community foundations. Corporate foundations are more likely to depend on annual gifts from their corporate donors to fund grants budgets, the report noted; therefore, their giving is more vulnerable to sudden economic downturns.

The slower rate of growth in corporate foundation giving followed a very strong 15 percent increase in giving in 1999 and a record 18.7 percent gain in 1998. Estimated 2000 giving grew by $253.3 million to $3.1 billion, up from $2.8 billion in 1999 and $2.4 billion in 1998. Over two years, corporate foundation contributions rose 25.4 percent.

The Ford Motor Company Fund (Mich.) ranked first among corporate foundations by overall giving in 1999 and led all other top corporate foundations with its nearly 177 percent growth in giving.

“With continuing volatility in the stock market and the economy,” noted Sara Engelhardt of the Foundation Center, “it’s unlikely that we’ll see record growth in corporate foundation giving again anytime soon. The increasing number of corporate mergers will also have an effect on future growth in corporate foundation giving.”

Community foundations see fastest rise in giving

Community foundation giving rose an estimated 21.5 percent in 2000, surpassing independent and corporate foundations but trailing a record 26.8 percent gain in 1999. Nonetheless, estimated giving grew a record $396.8 million to $2.2 billion last year, up from $1.8 billion in 1999 and $1.5 billion in 1998. Community foundations have reported the fastest growth in giving every year since 1995, and their giving has nearly tripled in that time.

Educational giving remains strong

Based on 1999 data, foundation contributions to primary and secondary educational aims remain strong. The amount given varied by state, with larger populations such as California and New York leading the pack. Maryland, Massachusetts, Washington, D.C., and Michigan also received a high proportion of foundation grants.

Most educational grants were given to programs focused on arts, science, youth development, and general education. Many grants within the United States were directed at educational programs focused on minorities and economically disadvantaged students. The report did not indicate how much was given specifically for school technology.

The top five foundations that contributed to elementary and secondary education were the Annenberg Foundation ($62,511,489), W.K. Kellogg Foundation ($19,136,988), Ford Foundation ($18,046,600), Lilly Endowment ($17,311,243), and Charles Stewart Mott Foundation ($17,302,955).

Foundation universe nearly doubles since 1985

New foundations have been a key factor in increased grant-making. Between 1985 and 1999, the number of grant-making foundations nearly doubled—from about 25,600 to 50,200. Since 1995, the number of active foundations has risen by just over 10,000, or 5.8 percent a year. These newer grant makers—primarily independent foundations—have greatly enhanced the long-term prospects for growth in giving, since the majority will receive their principal endowments over the next 15 years.

In 1999 alone, the overall number of active foundations rose by 7.2 percent, or almost 3,400, the largest single-year increase in absolute number since the Foundation Center began tracking information on all private and community foundations in 1975. These newer funders contributed $362.4 million in grants and added $6.3 billion to foundation endowments, accounting for approximately one-tenth of the growth in both foundation giving and assets in 1999.

Links:

Foundation Center
http://www.fdncenter.org