How Big Foundations Stay Big: An Interactive Guide to Giving Rates

By law, private foundations must distribute at least 5 percent of their assets each year. Grants, tax payments, and certain administrative expenses all count as qualifying distributions.

Using Internal Revenue Service figures compiled by the Foundation Center, The Chronicle found that most big foundations stick pretty close to that 5 percent minimum. The Chronicle used a formula to determine foundation distributions that approximates grant makers’ own figures, though because of flexibility in IRS rules, it doesn’t necessarily account for how each foundation meets the agency’s mandate.

1. Toeing the 5% Line

Dividing foundation distributions, including taxes and certain administrative expenses, by the assets available for charitable use reveals the foundation’s distribution rate. The diagonal line indicates the 5 percent threshold, which most foundations stay close to, though some, like the Walton Family Foundation, are regularly much higher. Select foundations from the list below to show or hide them in the chart, which adjusts according to the asset size of the foundations being displayed.

2. Grants vs. administrative expenses

Foundations are allowed to use a portion of their administrative expenses when they calculate their distribution rate. Below, see each foundation’s expenses and grants as percentages of their overall distributions. Other components, such as grants carried over from previous years and tax payments, make up the remainder of distributions. Some foundations have higher expense rates based on the way they operate. For instance, the Annie E. Casey Foundation, which had a median expense rate of 27 percent from 2010 to 2014, considers itself a hybrid: It is a private foundation that must file a 990-PF form with the IRS, but it works much like an operating foundation that uses staff to directly manage grantees, driving up its staff head count and administrative costs.

3. Asset growth

One argument for keeping distribution rates at 5% is so foundations can maintain their assets and keep pursuing their charitable goals far into the future. Charting the foundations’ assets here shows that despite dips in 2011, every organization ended 2014 with more in assets than it had in 2010, no matter their distribution rates.

In most cases foundations, especially those that received their original donations generations ago, benefited from a strong market. But some grant makers also scored additional gifts from living donors, which helped increase their endowments. For instance the JPB Foundation received two gifts, one in 2011 and one in 2014 totaling more than $1 billion, which sharply increased its assets.

4. Consistency in distribution rates

Not only do most foundations stick close to the 5 percent IRS requirement, but few vary much from year to year, though there are exceptions. The Foundation to Promote an Open Society distributed up to 18.2 percent, and the Walton Family Foundation’s rate ranged from 20.2 percent to 40.6 percent. Both of those grant makers received gifts from their donors that allowed them to grow their corpus while distributing money at a higher rate. The JPB Foundation, which also received large gifts, had one year with an extraordinarily high distribution rate.

5. Searchable data on distributions

Browse all of the data for the organizations analyzed or sort by their qualifying distributions, assets, distribution rates, and more.