Foundation Giving in 2002 Won’t Rise, Report Predicts

After five years of double-digit growth, the total amount of grants awarded by the nation’s

foundations rose much more slowly last year, increasing by about 5 percent, according to a new report. Giving this year is expected to remain flat, the report by the Foundation Center, in New York, says.

From 1995 to 2000, the amount of money foundations awarded to charities grew rapidly each year, more than doubling during the period to $27.6-billion. Gains in the stock market during that five-year span had swelled foundation coffers, leading to more giving.

Even as the economic recession set in last year, the Foundation Center’s report says, total giving by foundations rose to $29-billion — a 5.1 percent gain without adjusting for inflation. Last year’s inflation rate was 2.8 percent.

Spending by grant makers to fulfill pledges made in the boom years of the late 1990s, and the gifts made in the aftermath of the September 11 attacks, were among the reasons spending rose, according to the Foundation Center.

The Foundation Center figures for 2001 are estimates based on a sample of about 1,800 foundations and are subject to revision when figures from a larger number of grant makers are available. The 2000 figures are based on data from more than 56,600 grant-making foundations. The figures are not adjusted for inflation.

Growth Fastest in West

Foundations in the West reported the fastest growth in assets and giving for the third straight year, according to the 2000 figures, the most recent year foundation data were available for specific regions.

Western foundations increased their giving 31.1 percent, compared with the national average of 18.2 percent in 2000. And the total value of assets held by those funds rose 11.7 percent, compared with the national average of 8.4 percent. The number of foundations in the West also grew at the fastest rate — 17.3 percent, to 9,421 funds, compared with a national growth rate that averaged 12.7 percent.

The Northeast, however, continues to be the area with the greatest share of grant-making activity, with about one third of all foundations — or 18,052 funds — holding about $156-billion, or about one-third of the total amount of foundation assets nationally.

Among the Foundation Center’s other findings:

• Family foundations accounted for nearly half of the assets held by all types of private foundations in 2000, and more than half of the giving that year. In addition, nearly $7 out of every $10 received by private foundations in 2000 went to family funds, foundations in which the donor or his or her family members play a significant role in the organizations’ governance and grant making.
• Giving by the country’s more than 2,000 corporate foundations, the grant-making arms of companies, lagged last year, growing an estimated 2.6 percent from 2000, or slightly slower than the inflation rate. The slow growth reflected the foundations’ vulnerability to reduced profits at their sponsoring companies, according to the report.
• Giving by community foundations rose an estimated 4.6 percent in 2001, following a 17-percent increase in 2000 and a record 27-percent jump in 1999. Last year’s modest gain, the report says, reflects the sensitivity of the foundations’ donors to the downturn in the economy.

“The Foundation Yearbook: Facts and Figures on Private and Community Foundations” is part of a series of five reports published by the Foundation Center, called the “Foundation Today Series.” To order copies of the series by credit card, contact the Foundation Center at (800) 424-9836 or, in New York City, call (212) 807-3690; fax (212) 807-3691; or use the online ordering form at http://www.fdncenter.org; or send mail orders to the Foundation Center, Dept. N011, 79 Fifth Avenue, New York, N.Y. 10003-3076. Prepayment of $95 is required.