Foundation Center Announces Estimates for
2001 Foundation Giving
Despite Economic Downturn, Giving Rises 5% to a Record
$29 Billion
NEW FOUNDATIONS AND GIVING IN RESPONSE TO 9/11
HELP TO BOOST SUPPORT
April 4,
2002. New York City. Defying expectations in a year of economic recession,
continuing stock market decline, and national uncertainty in the wake of the
9/11 terrorist attacks, U.S. grantmaking foundations increased their contributions
to nonprofit organizations by $1.4 billion, according to a new report from the
Foundation Center. Foundations gave an estimated $29.0 billion in 2001—the highest
level of giving on record—up 5.1% (2.1% after inflation) over the $27.6 billion
now reported for 2000. Overall, foundation giving has more than doubled since
1996.
Several factors contributed to positive growth in foundation giving in 2001. Foundation assets increased by 8.4% in 2000, from $448.6 billion to $486.1 billion, providing
an important indicator of positive change in 2001 giving, especially for independent
foundations. Also, foundations continued to fulfill multi-year grant commitments
made in the boom years of the late 1990s through mid-2000. In addition, start-up
giving by new foundations and the foundation community’s exceptional response
in the aftermath of the 9/11 attacks helped to boost giving in 2001.
“Many people expected foundation giving to decline along with the economy in
2001,” stated Sara Engelhardt, president of the Foundation Center. “But foundation
endowments are a stabilizing influence among sources of nonprofit support. In
a period of cutbacks in government funding and diminished personal wealth, foundations
together managed to increase their giving ahead of inflation.”
These findings are presented in Foundation
Growth and Giving Estimates: 2001 Preview, part of the Foundation Center’s
Foundations Today Series of annual research reports. This 12-page summary
provides a forecast of 2001 giving together with a “first look” at aggregate
2000 giving and asset data for
the close to 56,600 grantmaking foundations tracked by the Center. Giving projections
for 2001 are based on estimates reported by more than 1,800 large and mid-size
foundations, combined with year-end fiscal indicators and supplemental reporting
by donors on 9/11 contributions. The Center will release an in-depth examination
of 2000 foundation growth trends in Foundation Yearbook: Facts and Figures
on Private and Community Foundations, available in late June. An analysis
of the areas of giving in 2000 for a sample of 1,015 larger foundations (accounting
for more than half of all giving) is available in Foundation Giving Trends:
Update on Funding Priorities, 2002 Edition.
Independent Foundation Giving Increases 5.4% in 2001
New Foundations and 9/11 Contributions Account for Close to Half of Growth
Independent foundations—including family foundations and “new health foundations” (formed from health care conversions)—increased their giving by an estimated 5.4% in
2001. This followed an 18.7% increase in 2000. Overall, they contributed an
estimated $22.5 billion in the latest year, up $1.2 billion from 2000. The start
of grantmaking by foundations established at the tail end of the recent economic
boom and contributions made in the aftermath of the 9/11 attacks together accounted
for close to half of the increase in independent foundation giving.
Assets of independent
foundations rose 7.2% in 2000, down from a 16.6% increase in 1999. Independent
foundations are required to pay out each year at least 5% of the value of their
investments in the preceding year. (They may carry forward payout in excess
of 5% over several years.) In 2001, estimated giving represented 5.5% of independent
foundation assets in the prior year. This nearly matched the 5.6% ratio of 2000
giving to 1999 assets. In addition to grant payments reported here, calculations
of payout also include other expenses, such as charitable loans and program
and administrative costs.
The overall
growth of independent foundation assets was boosted by the added value of new
foundation endowments and the strong asset performance of a few top funders,
such as the Lilly Endowment. At the same time, the collapse of the technology
boom and the stock market’s slide beginning in mid-2000 resulted in losses in
asset values for half of the top 50 funders.
Corporate Foundation Funding Increases 2.6%
9/11-Related Giving Averts Drop in Overall Support
Giving by corporate foundations rose
an estimated 2.6% in 2001, compared to 6.1% in 2000. Exceptional giving in response
to the 9/11 terrorist attacks helped corporate foundations to maintain positive
growth in support, despite the effects of declining corporate profits. In general,
corporate foundations maintain much smaller asset bases than independent and
community foundations and are therefore
more likely to depend on annual gifts from their corporate donors to fund grants
budgets. As a result, their giving is more vulnerable to economic downturns.
Estimated
2001 giving grew by $78.0 million to $3.1 billion, up from $3.0 billion in 2000
and $2.8 billion in 1999. This represented the smallest annual increase in grant
dollars reported since 1994. Over two years, corporate foundation contributions
rose 8.9%. The Ford Motor Company Fund ranked first among corporate foundations
by overall giving in 2000, for a second consecutive year. Its giving increased
by 72.9% in 2000 to $169.1 million.
Reflecting the country’s eroding economic picture, gifts from companies to their foundations (pay-in) fell 12.4% to $2.9 billion in 2000. As a result, corporate
foundation giving (payout) exceeded pay-in by about $82 million or 2.8%. Balancing
out the smaller amount of new gifts into foundations was a modest net gain of
$741 million in the value of corporate foundation holdings, which increased
assets overall to $15.9 billion in 2000.
“Corporate foundations
were the first to show the effect of the economic slowdown,” noted Sara Engelhardt,
“and it’s unlikely that we’ll see a substantial increase in corporate foundation
giving until the economy begins a robust and sustained recovery.”
Community Foundation Giving Grows 4.6% in 2001
2000 Assets Grow at Half of Prior Year’s Rate
Community foundation
giving rose an estimated 4.6% in 2001, following a 17.1% gain in 2000. This
was the smallest percentage increase in community foundation giving since 1994.
Estimated giving grew to $2.3 billion in 2001, up from $2.2 billion in 2000.
Yet the nearly $100 million increase exceeded the rise in corporate foundation
giving.
Slumping foundation
asset values caused by continuing stock market losses and reduced personal wealth
among individual donors contributed to slower growth in giving in 2001. In periods
of recession, community foundations generally receive lower levels of “pass-through”
gifts from individual donors, reducing an important source of their annual giving.
The slowdown in the growth of community foundation resources began in 2000. Assets grew 10.2% in 2000 to $30.5 billion, amounting to half of 1999’s 20.4% asset increase.
New gifts into foundations rose 16.1 percent, down from a record 27.6 percent
rise in 1999. Regardless of the recent slowdown, community foundation resources
have soared in the past decade, making them an increasingly important force
in philanthropy.
Foundation Universe More than Doubles Since 1987
Number of Grantmaking Foundations Grows by a Record 12.7% in 2000
New foundations continue to be a key factor in increased grantmaking. Between 1987 and 2000, the number of grantmaking foundations more than doubled—from about 27,700 to nearly 56,600. Since 1998, the number of active foundations has risen by nearly 10,000, or an average of
9.9% a year. These newer grantmakers—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 2000 alone, the overall number of active foundations rose by 12.7% or almost 6,400—the largest single-year increase in number reported since the Center began
tracking information on all private and community foundations in 1975. These
newer funders gave out $709.9 million in grants, accounting for one-sixth of
the growth in foundation giving between 1999 and 2000, and added $9.3 billion
to foundation endowments, representing one-quarter of the growth in assets during
this period.
# # #
Copies of Foundation Growth and Giving Estimates can be accessed at no charge from the Foundation
Center’s Web site at. For media who would like to request a print copy of the report,
call 212-807-2475. “Highlights” of Foundation Giving Trends,
2002 Edition, the Center’s annual examination of funding trends
of more than 1,000 larger U.S. foundations, are available at http://foundationcenter.org/research/trends_analysis.
About the Foundations Today Series.
The Foundations Today Series provides the latest information on foundation
growth and trends in foundation giving. The five reports in the annual series—Foundation
Giving Trends, Foundation Growth and Giving Estimates, Foundation Yearbook,
Foundation Staffing, and Foundation Reporting—present detailed analyses
of foundation grantmaking trends based on a sample of larger U.S. foundations,
examine growth in the resources of active U.S. foundations, identify differences
among grantmakers by foundation type, document foundation staffing patterns,
and explore foundation reporting practices.
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About Institutional Philanthropy’s Response
to 9/11. For information on giving by foundations, corporations,
and other institutional donors in response to the 9/11 terrorist
attacks, see the Foundation Center’s report, Giving in the
Aftermath of 9/11: Foundations and Corporations Respond. Copies
of the eight-page report can be accessed at no charge from the “Philanthropy’s
Response to 9/11” area of the Foundation Center’s Web site: http://foundationcenter.org/research/response.
About the Foundation Center. Founded
in 1956, the Foundation Center is the nation’s leading authority on institutional
philanthropy. The Center’s mission is to support and improve institutional philanthropy
by promoting public understanding of the field and helping grantseekers succeed.
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