November 18, 1999 | Read Time: 4 minutes
Community foundations nationwide, buoyed by a strong stock market that has boosted endowments and encouraged more donors to give big gifts, together held more than $25-billion in assets last year, according to an annual survey by the Columbus Foundation, in Ohio.
ALSO SEE:
Community Foundations’ Assets, Gifts, and Grants in 1998
Growth in ‘Supporting Organizations’ at Community Funds
That’s 19 per cent more than in 1997 and two and a half times the total assets held five years ago by such foundations.
Gifts to foundations also rose above 1997 levels — by 17 per cent, to $2.8-billion — and the sum that foundations gave to charities jumped last year by 23 per cent, to $1.5-billion, the survey found.
“The business of community foundations has reached record highs in all areas — gifts, grants, and assets,” says James I. Luck, president of the Columbus Foundation. “And I think we’ll continue to see explosive growth.”
He says that community foundations, like many charities, have benefited from a good national economy and have even started seeing some gifts come in that are part of the multitrillion-dollar intergenerational transfer of wealth expected in the coming decades.
Community foundations raise and distribute most of their money in a specific geographic area.
Each year, the 100 biggest foundations account for at least 85 per cent of the gifts, grants, and assets in the entire field, says the Columbus Foundation’s Mr. Luck, who estimates that there are about 600 community foundations in the country. Thus, he says, despite the varying number of foundations that participate in the survey each year — 555 in 1998, compared with 541 in 1997, for example — year-to-year comparisons are instructive.
In addition, Mr. Luck notes, the growing number of survey participants reflects the growing number of foundations. He estimates that at least 15 community foundations are established each year.
And not only is the number of foundations increasing; so, too, is their size. Eleven years ago, eight foundations received more than $10-million in gifts. In 1998, 66 organizations collected at least that much. In 1988, 12 foundations held at least $100-million in assets. Last year, more than four times that number were worth that amount, including three — the Cleveland Foundation, the Marin (Cal.) Community Foundation, and the New York Community Trust — that held more than $1-billion each.
The New York Community Trust was the richest community foundation last year, according to the survey, and it distributed the most in grants to charities. It held $1.8-billion in assets in 1998, and awarded $113-million in grants.
The Greater Kansas City Community Foundation, in Missouri, received the most money from donors last year — $121-million, followed by the California Community Foundation ($119-million), and the Central Indiana Community Foundation ($102-million).
Much of Indiana’s total came from a single gift. Mary Ann Stein, president of the Moriah Fund, and her brother, Daniel R. Efroymson, a member of the community foundation’s board, paid $75-million of a $90-million pledge to create a donor-advised fund.
Behind some of the growth in assets of community foundations overall is the rise in the number of so-called supporting organizations, according to the Columbus Foundation. Such organizations resemble donor-advised funds, where donors turn over cash and appreciated assets to a community foundation, claim a charitable deduction, and then recommend when and to which charities to distribute the money.
Supporting organizations go one step further in that they are set up as separate charitable organizations within the community foundation, with separate trust accounts and governing boards. The organizations typically pay the foundation fees for administrative, accounting, or managerial support. In many cases, the foundation retains the right to appoint a majority of the organization’s board.
According to the Columbus Foundation survey, a total of 48 supporting organizations were established during all of the 1980s, while in 1997 and 1998, a total of 92 groups — 46 each year — were created. Last year, 82 community foundations held 290 supporting organizations, most with assets ranging from $1-million to $50-million. The organizations held total assets of $3.2-billion, a nearly 50-per-cent rise from 1996.
Last year, the $276-million that donors gave to supporting organizations and the $158-million that the organizations distributed to charities each accounted for about 10 per cent of all community-foundation gifts and grants.
Community-foundation officials say they are able to attract new and bigger donors through supporting organizations. Donors may choose to set up such an organization instead of a private foundation, the officials say, in part because of the grant-making and bookkeeping support that community foundations can offer.
A copy of the Columbus Foundation’s full report on its survey is available at the foundation’s World-Wide Web site at http://www.columbusfoundation.org.
