Shaky Economy Didn’t Cause Grant Making to Fall in 2002, Report Says

Foundation giving remained steady in 2002 despite a weak economy and volatile stock market, according to a new

report by the Foundation Center.

The report is based on data collected from nearly 62,000 foundations in the United States.

Despite an overall decline in assets, foundations provided $30.3-billion to charities in 2002 — a drop of only $218-million from the previous year, the report says. The report attributes the steadfast giving levels to a rapid increase in new foundations, donations made to existing foundations, payments on pledges related to the September 11 terrorist attacks, and an effort by many foundations to keep giving steady — or avoid major reductions — in the face of government cutbacks.

The report also says that foundation assets dropped by 10 to 12 percent in 2002, which, it predicts, means that foundation giving will probably decrease in 2003.

The Foundation Center’s report follows The Chronicle‘s survey of giving at 131 big foundations (March 6), which found that assets of major foundations declined by a median of 9 percent, meaning that half declined more and half declined less.

The Foundation Center report says that the decline in foundation giving is not as bleak as might have been expected, given the drop in foundation assets in recent years. Of the 747 foundations that provided estimates of how much they would give in 2003, 42 percent said they would cut grant making this year, 38 percent expected to continue giving at the same levels, and 20 percent planned to increase donations. Meanwhile, the report predicts that the continued emergence of new foundations will also help offset declines in giving by major grant makers.

Among other findings:

• The number of grant-making foundations grew by 9.2 percent in 2001, and has more than doubled since 1988. Foundations created in 1999 and 2000 accounted for one-fifth — or $603.3-million — of the increase in grant dollars in 2001.
• In 2002, private and community foundations paid about two-fifths of the $279.5-million they pledged in response to the September 11 terrorist attacks. Corporations and their foundations paid about one-third of the $682.4-million they pledged for relief efforts.

The report, “Foundation Growth and Giving Estimates,” can be viewed free on the Foundation Center’s Web site. The report is part of the Foundations Today Series published by the Foundation Center. The set of five reports is available for $95 from the Foundation Center, Attn: Customer Service, 79 Fifth Avenue, New York, N.Y. 10003; (800) 424-9836; fax: (212) 807-3677; http://fdncenter.org.