Assets at Small Foundations Declined 3.5% Last Year, Study Shows

Assets at small foundations dropped 3.5 percent in 2018, as donor contributions were not enough to make up for a sour stock market, according to a recent study.

Total grants and charitable distributions at the 987 foundations studied by Foundation Source, a grant-maker consultant, remained flat at about $300 million. The study included foundations with assets of less than $50 million. Outgoing grants often fall the year following a rough year on Wall Street.

Foundation Source attributed last year’s decline to a weak stock market, particularly during the fourth quarter of 2018. In 2017, assets climbed 13.5 percent.

Collectively, the investment portfolios at the foundations studied declined 3.2 percent. That compares favorably with the 4.4 percent drop in the Standard & Poor’s total return index.

On average, foundations steered 7.3 percent of their assets to charitable purposes in 2018, down from 8.5 percent in 2017, but still exceeding the federal requirement of 5 percent.

Foundations showed a preference for project-specific grants but displayed a growing willingness to support grantee’s basic functions such as fundraising and administrative positions. More than 39 percent of small foundations’ grants went to general operating support, an increase of 2 percentage points over the previous year.