How The Chronicle’s Survey of Foundation Assets and Giving Was Compiled

The Chronicle’s annual survey of the nation’s largest private foundations is based on financial information provided by 147 grant makers.

Among the 142 foundations that provided

asset figures for their fiscal year ending in 2004, assets totaled $178.82-billion. Among the 146 foundations that provided data on the value of their grants paid in fiscal 2004, grants totaled $7.86-billion.

The Chronicle also collected data on total operating and administrative costs and total compensation for foundation directors, trustees, and officers. This information was gathered from 253 foundations’ Forms 990-PF, the informational tax returns filed with the Internal Revenue Service, for the fiscal year ending in 2003.

To be included in the survey, foundations had to hold at least $230-million in assets or have awarded at least $9-million in grants in the 2003 fiscal year, the most recent year for which all the foundations had audited financial information.

One hundred eleven grant makers of that size declined to participate in the survey. Figures for those organizations come from their most recent Form 990-PF.

Officials at some foundations declined to complete a survey form because it is 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.

Neither the Buffett Foundation, in Omaha, nor the Chauncey and Marion D. McCormick Family Foundation, in Chicago, participated in the survey, but both foundations provided 2004 Forms 990-PF, from which The Chronicle took 2004 figures. All other foundations that declined to fill out the survey provided the tax forms from the 2003 fiscal year.

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 largest grant makers by their assets and the amount they gave away during the most recent fiscal year for which data were available.

The Chronicle sent a written request to foundations for their Forms 990-PF during the third week of December, so that organizations would have time to comply with federal law, which requires that the form be provided within 30 days of such a request. All foundations contacted for the survey followed the law, either by providing The Chronicle with a copy of their Form 990-PF, or by making it available online for public inspection.

Many of the grant makers that responded said their figures for 2004 and 2005 were estimated or unaudited, and thus subject to change.

Comparing Figures

Readers of the survey should take care in comparing a foundation’s giving and asset figures 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 multiple-year pledge, then reduce the amounts given toward the pledge in subsequent years. Others make a one-time, large payment that is not indicative of its usual giving patterns.

For instance, in 2003, the John & Cynthia Reed Foundation, in New York, gave $18.4-million to the Massachusetts Institute of Technology, a sum that was far larger than the foundation usually gives. Last year, the foundation’s largest grant was just $1,899,000, and also went to MIT.

The assets of several foundations increased because they received large donations. The John Templeton Foundation, in West Conshohocken, Pa., received $550-million from its founder, John Templeton. The gift caused assets to jump by 165 percent, from $337-million in 2003 to $895.5-million in 2004.

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, not all grants represent proposals chosen through a competitive application process.

Some foundations, such as the Ellison Medical Foundation, in Bethesda, Md., which reported that it had no assets at the end of its fiscal year, distribute within 12 months all of the money they receive in a given year. The Paul G. Allen Family Foundation, in Seattle, took that approach in 2004, after it was created to consolidate the assets and grant making of six separate foundations. Some other so-called pass-through foundations do not give all of their money in grants before the fiscal year ends.

The foundation survey was compiled by Leah Kerkman and Cassie J. Moore.