Donations to Community Foundations Drop for Second Year in a Row, Study Finds

Gifts to community foundations fell by nearly 10 percent in 2002, after adjusting for inflation, the second year in a row that donations have

declined, according to a survey by the Columbus Foundation, in Ohio.

The 650 community foundations in the survey received $3.2-billion last year, $285-million less than in 2001 and $893-million less than the record $4.1-billion they collected in 2000.

The foundations made grants totaling $2.5-billion in 2002, down almost 4 percent after adjusting for inflation. Their net assets also fell, declining 7 percent, to $29.7-billion, after adjusting for inflation.

A separate survey, by the Council on Foundations, in Washington, found that community foundations lost money on their investments last year. The median return on investments was a loss of 10.6 percent, according to the survey, meaning that half did better and half did worse.

Economy’s Downturn

Officials at community foundations blamed much of the continued falloff in giving on the sluggish economy.

The two groups with the largest declines in donations are located in northern California, where the economic woes of the high-technology industry have hit hardest. The Community Foundation Silicon Valley, in San Jose, suffered a drop of $61-million in donations, a 55-percent decline, and the San Francisco Foundation saw gifts fall by $50-million, or 49 percent.

“The economy of the Silicon Valley is in really sad shape,” said Peter Hero, president of the Community Foundation Silicon Valley. “We have an unemployment rate of 8.4 percent, and there are 30 million square feet of vacant office space in the Bay Area, most of it in the Silicon Valley.”

Given that situation, he added, “we were pleased to raise $52-million” last year. Mr. Hero said that if the first quarter of the foundation’s 2003 fiscal year is any indication, gifts are on the rebound. “We raised $47-million from June to September,” he said.

Big Gains

Three organizations received more than $100-million in gifts last year: The Tulsa Community Foundation took in $192-million; the Community Foundation of Middle Tennessee, in Nashville, raised $149-million; and the Greater Kansas City Community Foundation, in Missouri, collected $118.5-million.

The Community Foundation of Middle Tennessee saw the biggest increase, in both percentage and dollar terms, of any community foundation in 2002, with an increase of $96.6-million, up 187 percent.

Ellen Lehman, president of the Tennessee group, said most of last year’s big gifts came from a small number of donors who wish to remain anonymous.

Officials of several other community foundations that saw large increases last year said they also were the result of a few large gifts.

The New York Community Trust continued to hold the most assets of any community foundation, with $1.6-billion. Three others broke the $1-billion mark: the Cleveland Foundation, with $1.3-billion; the Chicago Community Trust, with $1-billion; and the Marin Community Foundation, in Novato, Calif., also with $1-billion.

The New York Community Trust was also the largest grant maker, awarding $123-million, followed by the Greater Kansas City Community Foundation, which made grants totaling $102-million.

Results of the “2002 Columbus Foundation Survey” are available online at http://www.columbusfoundation.org. Printed copies are available free from Carol Harmon, Columbus Foundation, 1234 East Broad Street, Columbus, Ohio 43205; (614) 251-4000.

To order a CD-ROM of the Council on Foundations’ “2002 Investment Performance and Practices of Community Foundations,” go to http://www.cof.org or call (888) 239-5221 and request item number 965. The cost is $10 for council members and $30 for nonmembers. Printed copies are available by calling the same phone number and asking for item number 264. The cost is $50 for members and $140 for nonmembers.