How The Chronicle’s 2003 Survey of Big U.S. Foundations Was Compiled

The Chronicle’s 12th annual survey of the nation’s largest private foundations is based on financial

information provided by 138 grant makers.

Among the 133 foundations that provided asset figures for fiscal 2002, assets totaled $149.8-billion. Among the 131 foundations that provided data on the value of their approved grants for 2002, grants totaled $7.6-billion.

To be included in the survey, a foundation had to hold at least $230-million in assets or have awarded at least $9-million in grants in its most recent fiscal year.

Ninety-one grant makers of that size declined to participate in the survey. Figures for those organizations come from their most recent Form 990-PF informational tax returns filed with the Internal Revenue Service.

Officials at some foundations that declined to fill out a survey form said it was the policy of their organization not to participate in surveys. Others said they had a limited number of staff members and did not have time to respond. Still others said their foundations were in the midst of changing their program focus and thus could not provide up-to-date information on their grant making.

A few foundations declined to participate in the survey because they give only to preselected grantees and said they did not want to be inundated with unsolicited grant proposals.

Most foundations were selected to participate based on information supplied by the Foundation Center, an organization in New York that conducts research on grant makers. The Chronicle asked the center to rank the nation’s 150 largest foundations by their assets and the amount they gave away during the most recent fiscal year for which data were available. The Chronicle included other foundations in the survey because they have ranked among the largest in the past or are expected to do so in the future.

The Chronicle sent a written request to foundations for their Forms 990-PF during the third week of December 2002, so that organizations would have plenty of time to comply with federal law, which requires that the form be provided within 30 days of such a request. All foundations that received a request followed the law.

Most of the foundations that responded said their figures for 2002 and 2003 were estimated or unaudited and could change.

Year-to-Year Changes

Readers of the survey results should take care in comparing a foundation’s giving from year to year. A sharp increase or decrease from one year to the next in the amount of grants approved or paid may not necessarily mean a change in the foundation’s financial condition. Some foundations, for example, make a large initial payment on a multiyear pledge, then reduce the amounts given toward the pledge in subsequent years.

Special circumstances can create a misperception that a foundation’s overall grant making has dropped or risen. In 2001, in the aftermath of the September 11 terrorist attacks, the Andrew W. Mellon Foundation, in New York, awarded $50-million to a special fund set up for arts and culture organizations affected by the disaster. The foundation distributed $8-million in 2001 to the special fund, and paid out the remaining $42-million in 2002. The 2002 payment caused a spike in the value of grants that Mellon paid in fiscal 2002. Mellon expects its 2003 grant making to be about the same as it was in 2002, after adjusting for the special-fund payment, says Glenda Burkhart, vice president of operations and planning.

The Annenberg Foundation, in St. Davids, Pa., is another example of a foundation that made especially large gifts in fiscal 2002. It provided $100-million each to the communications schools at the University of Pennsylvania, in Philadelphia, and the University of California at Los Angeles. As a result, its giving increased by 167 percent over the previous year, but the foundation said its giving would not keep growing; in fact, the foundation said grants would decrease.

It is also important to keep in mind that because some foundations award money to their own foundation-run programs or to organizations they select, all the grants do not represent proposals chosen through a competitive application process.

Some foundations, such as the Ellison Foundation, in Bethesda, Md., which reported zero assets at the end of its 2002 fiscal year, distribute within 12 months all of the money they receive in a given year. Some other so-called pass-through foundations do not give out all of their money in grants before a fiscal year ends.

The survey was compiled under the direction of Marni D. Larose with the assistance of Stephen G. Greene, Stanley Krauze, and Brad Wolverton.