Grant Making by Family Funds Has More Than Doubled, Report Finds

February 12, 2009 | Read Time: 3 minutes

Grant making by American family foundations totaled $18.5-billion in 2007, a 13-percent increase from the previous year.

Those foundations received nearly $24-billion in contributions in 2007, a 36-percent increase over the $18-billion that was added to their coffers in 2006, according to the Foundation Center, a research organization in New York.

A significant percentage of the money distributed by those foundations went to help the needy. The largest of them gave 30 percent of grant dollars to assist “economically disadvantaged” people, slightly more than the roughly 25 percent that all large private foundations paid out to assist needy people, according to the report.

The report defines “family foundations” as the 37,539 private foundations that have “measurable donor or donor-family involvement” and that reported their grant making for 2007. By that definition, the Bill & Melinda Gates Foundation — by far the wealthiest grant maker in America — is defined as a family foundation, skewing some results, particularly health-related giving.

The Gates foundation was the behemoth among family foundations, in both assets — $38.9-billion as of the end of 2007 — and total giving, which amounted to $2-billion that year.

The next four largest funds in terms of grant making were the Lilly Endowment ($341.9-million), the David and Lucile Packard Foundation ($307.9-million), the Gordon and Betty Moore Foundation ($285.9-million), and the Annenberg Foundation ($266.9-million).

Rounding out the top 10 in 2007 grant making were the Walton Family Foundation ($218.9-million), the Susan Thompson Buffett Foundation ($202.7-million), the Eli and Edythe Broad Foundation ($127.3-million), the T. Boone Pickens Foundation ($120.4-million), and the Richard King Mellon Foundation ($109.2-million).

Wealthiest Funds

The wealthiest family foundations were more inclined than other private foundations to support charities that focus on animal welfare, the environment, health, religion, and the social sciences. At the same time, they were less likely to give to the arts, education, human services, international affairs, and public affairs and social benefit — the last a broad category that includes civic rights, community development, philanthropy, and volunteerism.

Adjusting the figures for inflation, the report says that grant making by family foundations has more than doubled since 1998, rising from $7.2-billion in 1998 to $14.5-billion in 2007.

The report’s authors also found that approximately one-third — or 11,555 — of family foundations had been created from 2000 to 2007. Family foundations have grown especially rapidly in the past two decades. For instance, only 4,365 family funds were created in the 1980s, while 14,080 were founded in the 1990s.

Other key findings in the report:

In 2007, family foundations accounted for nearly three-fifths of overall giving by private foundations.
Among the larger family funds (a pool of 617 foundations), education was the chief grant-making emphasis of foundations located in the Northeast, Midwest, and South, while health accounted for the biggest share among family funds in the West, largely due to the Gates foundation’s focus on global health.
Total assets of the 37,539 family foundations grew from $266.7-billion to $294.4-billion from 2006 to 2007, a 10-percent increase.
Of the 10,181 foundations that held assets of at least $1-million or paid out grants of $100,000 or more annually, only 1,600 employed paid staff members.
The size of governing boards at family foundations tended to increase as foundations grew older; the median number of trustees at funds established before the 1940s was seven, while the number of trustees at funds established since the 1960s was three.

Steven Lawrence, senior director of research at the Foundation Center, says that while he cannot determine the exact cause for this difference, the data suggest that the boards of more mature foundations expand over the years as additional generations of family members are brought into the philanthropic fold.
Nearly 60 percent of all family foundations reported assets of less than $1-million, and 48 percent reported giving less than $50,000 in 2007.