Foundations Gave $3-Billion to Overseas Projects Last Year, Report Says

A slump in foundation investments caused the dollar amount of international grants by American foundations

to decline last year, but such giving will probably grow in 2004, said a new report.

International giving totaled an estimated $3-billion last year, a slight decrease from 2002, when grants to organizations abroad equaled $3.2-billion, said the report. Last year was the second year in a row that international grant making declined. In 2001, charitable giving overseas by American foundations reached an all-time high of $3.3-billion. (The dollar figures have not been adjusted for inflation.)

The decline in international grant making matches the decrease in foundation giving in all types of programs, which fell 2.5 percent from 2002 to 2003.

The Foundation Center, a research group in New York, and the Council on Foundations, a Washington association of about 2,000 foundations, produced the report. The 2003 estimates are based on a survey of 64 of the biggest grant makers, while the estimates for 2002 are based on information from a sample of about 1,000 charitable funds.

The report cautioned that grant makers continue to face a difficult situation in their international grant making. Seventy-eight percent of respondents agreed with the statement “It is more difficult to fund internationally due to a more demanding and uncertain regulatory environment.” For example, the federal government has issued new guidelines for grant makers to prevent charitable dollars from supporting terrorism.

However, the report predicted an increase in giving internationally in 2004 due to the rebound in the stock market last year and the rise in the number of foundations with international programs. A total of 37.5 percent of the respondents said they expected to increase their international giving this year, while 50 percent said such giving would remain the same, and 12.5 percent said it would decrease.

$29.7-Billion Donated

According to another report released in June by the Foundation Center, giving by the country’s 65,000 grant makers last year decreased to $29.7-billion, from $30.4-billion in 2002. The report is a follow-up to preliminary estimates released by the Foundation Center in April (The Chronicle, April 15).

The report on all foundation giving predicted that grants will increase in 2004 as assets rise, but as with international grant making, it did not expect large growth. One reason is that many foundations calculate their grant budgets based on a three-year rolling average of their endowment values, so an increase in assets does not automatically translate into a proportionate increase in grant making.

Based on a survey of 884 foundations, 45.4 percent reported they would increase their giving in 2004, while 36.4 percent expected no change, and 18 percent expected a decline. (Due to rounding, these percentages do not add up to 100 percent.)

Other findings from the report on international grant making:

• International giving accounted for 13.8 percent of all foundation grant dollars in 2002. In 1998, the share was 10.9 percent.
• Giving to health programs abroad grew the most from 1998 to 2002, 32 percent of international grants being made for such purposes. The report said the emergence in 1999 of the Bill & Melinda Gates Foundation, which supports efforts to fight AIDS and other health problems overseas, contributed to the increase.
• Asia and the Pacific region received the largest percentage of grants dollars — 23.3 percent — from American foundations. China was the country funds most frequently mentioned as an area of increased support.

The overseas-giving report, “International Grant Making III: An Update on U.S. Foundation Trends,” is available for $40, and “Foundation Yearbook: Facts and Figures on Private and Community Foundations” is available for $45 from the Foundation Center, 79 Fifth Avenue, New York, N.Y. 10003-3076; (800) 424-9836, or in New York, (212) 807-3690.

The reports can also be ordered on the Foundation Center’s Web site at http://www.fdncenter.org/marketplace. Under the “Product Categories” heading, select “Research.”