Assets of Community Foundations Rose in 2003 After Two Years of Losses

The combined assets at community foundations around the country rebounded along with the stock market last year,

following two years of overall losses at the organizations, according to two new reports.

An annual survey by the Columbus Foundation, in Ohio, found that the total assets at 645 community foundations grew by 17 percent last year, to a record of nearly $35-billion. In 2001 and 2002, their total wealth had dipped from the previous year’s by 1 percent and 7 percent, respectively.

A separate survey of community foundations’ investment performance, conducted by the Council on Foundations, found that at 168 funds, the median rate of return on investments was 22 percent in 2003, meaning half saw bigger gains and half saw smaller returns, if any.

Last year’s gains were the biggest the Council on Foundations had found since 1995, when the median increase was 24.3 percent.

Community foundations generally serve specific geographic areas, both raising and distributing most of their money within a single region.

Feeling Optimistic

Community foundation officials said that last year’s recovering stock market not only helped increase the value of their organizations’ investment portfolios, but also helped donors feel better about their own financial situations.

“People felt the bottom and then saw the market grow again and stabilize somewhat,” said Peter Hero, president of Community Foundation Silicon Valley. “When you feel more optimistic, it’s easier to give.”

The Columbus Foundation survey found that gifts to community foundations rose by 17 percent in 2003, to a total of $3.8-billion.

Community foundations gave out $2.6-billion, slightly more than the $2.5-billion distributed in 2002.

For the third straight year, the Tulsa Community Foundation, in Oklahoma, received the most in gifts — a little more than $278-million in 2003.

The bulk of the total came from George B. Kaiser, president of Kaiser-Francis Oil Company and head of the community foundation’s governing board.

Mr. Kaiser helped create the fund in 1998, and has been quietly giving away much of his fortune through the organization ever since.

Community foundations in California — including the San Francisco and the California Community Foundations, which gave $64.4-million and $61-million, respectively — accounted for 17 percent of all grants paid by community foundations around the country in 2003.

The New York Community Trust once again led the grants list, with awards last year totaling nearly $116-million. And, as it has been every year since the survey was begun in 1988, the trust was also the wealthiest community foundation in the nation, with nearly $1.8-billion in assets in 2003.

Three other community foundations — the Cleveland Foundation, Chicago Community Trust, and Marin Community Foundation — held assets worth more than $1-billion.

Mix of Investments

According to the Council on Foundations survey, nearly 66 percent of all assets held by community foundations last year were invested in equities.

Nearly 25 percent of assets were in fixed-income funds, and a little more than 3 percent were in cash. The remainder, more than 6 percent, were in alternative investments, such as hedge funds, an increasingly popular investment choice.

In 1999, the report said, less than 1 percent of community foundation assets were in alternative investments.

To order a CD-ROM of the Council on Foundations’ report “2003 Investment Performance and Practices of Community Foundations,” go to http://www.cof.org or call (888) 239-5221. The cost is $10 for members and $30 for nonmembers. Printed copies are available for $50 for members and $140 for nonmembers.

To view the results of the Columbus Foundation’s current and past surveys online, go to http://www.columbusfoundation.org.

Printed copies of the 2003 survey results are available free from the Columbus Foundation, 1234 East Broad Street, Columbus, Ohio 43205; (614) 251-4000.