Community Funds Award Record Amount in Grants, Survey Shows

Community foundations awarded a record amount in grants last year, and now hold more in assets

than ever before, according to an annual survey by Ohio’s Columbus Foundation.

Donations to the funds, which typically raise and distribute money in one geographic area, were also strong; community foundations received $5.7-billion in contributions in 2006, up $58-million from 2005, according to the survey of 631 community foundations.

The foundations benefited not just from the growth in donations but strong investment returns on their assets. For the third time in the past four years, investment returns gained by double-digit percentages, with a median increase in 2006 of 13.2 percent (meaning half performed better and half performed worse), according to a study conducted by the Council on Foundations.

The healthy finances have enabled community foundations to distribute more to charities, a trend that is expected to continue. Roughly 60 percent of the community foundations that responded to a Foundation Center survey said they expect to give more this year than they did in 2006.

Tulsa on Top

For the sixth year, the Tulsa Community Foundation raised more money than any other community foundation, according to the Columbus Foundation, reporting $738-million in gifts. Two California foundations ranked second and third in gifts received: the Silicon Valley Community Foundation, with $292-million, followed by the California Community Foundation, in Los Angeles, with $234.6-million.

The Silicon Valley Community Foundation was created in 2006 through the merger of the Peninsula Community Foundation and the Community Foundation Silicon Valley.

The combining of these two organizations, each of which had served the Northern California region for more than 50 years, is a direction other community foundations may be considering, according to Ray Biddiscombe, chief financial officer of the Columbus Foundation.

“This is the trend we will see going forward as administration costs go up and regulations continue to increase,” Mr. Biddiscombe said.

Emmett Carson, chief executive officer of the Silicon Valley Community Foundation, said he has been contacted by other organizations looking for information on the merger, but cautions that the decision to combine forces is complicated.

“The case for this merger was that we could do better for the community as one institution than by being two,” Mr. Carson said. “There have been some savings, there will be more to come, but I don’t think you get into a merger because of the cost savings alone. You have to look at the mission.”

The Silicon Valley Community Foundation ranked second in the amount of money given away last year, at just under $214-million. The leading grant maker was the California Community Foundation, awarding $245-million.

Over all, $3.7-billion in grants were reported for 2006, according to the Columbus Foundation, an increase of $461-million from 2005.

The Columbus survey found that community foundations gave away a median of 8 percent of the prior year’s market value of their assets. Although there are no regulations on how much a community foundation must award each year, private foundations generally are required to give away a minimum of 5 percent of the prior year’s assets.

The increase in grants is in part a reflection of the continued increase in market assets. The net assets of community foundations were up 14 percent, from $44.9-billion in 2005 to $51.2-billion in 2006.

Mr. Biddiscombe said one of the survey’s more surprising findings was the increase in the number of community foundations with assets over a billion dollars, which now stands at eight. “You don’t have to go back that far when there weren’t any,” he said.

The Tulsa Community Foundation is the first community foundation to hold more than $3-billion in assets, a 34-percent increase over 2005.

It ranked 20th in grant making, at $50.6-million in 2006. The organization, which is less than 10 years old, has struggled to award money as quickly as it has been able to raise funds.

Given Tulsa’s rapid growth and the region’s relatively small population (it ranks 45th among U.S. cities, with under 400,000 people), Mr. Biddiscombe said he was not surprised the foundation’s giving has fallen short of its fund-raising pace.

The Columbus Foundation has conducted the community-foundation survey since 1988. The data include supporting organizations and other charitable entities controlled by the foundations.

Survey results can be found on the Columbus Foundation’s Web site. Printed copies can be obtained by calling (614) 251-4000.

The Council on Foundations’ report is available in print and on CD-ROM. Pricing information is available on the group’s Web site, or may be obtained by calling (888) 239-5221.

Copies of the Foundation Center report can be downloaded free.