Increase in Gifts to Community Foundations Falls Short of Past Years’ Gains

Community foundations continue to see large increases in giving, although their growth rate is slowing, according to a new survey.

ALSO SEE:

Community Foundations’ Gifts, Grants, and Assets in 1997

Gifts to community foundations increased by 9.9 per cent in 1997, to more than $2.4-billion, according to an annual survey conducted by the Columbus Foundation, in Ohio. During that same time, combined assets grew to $21.3-billion — or 24.4 per cent more than in 1996. The amount of money the foundations distributed in grants jumped by 25.5 per cent, to $1.25-billion.

Direct comparisons are difficult to make, however, because the number of community foundations participating in the study changes from year to year. The Columbus Foundation’s survey included 547 community foundations this year, compared with just 509 groups in 1996.

Although community foundations, which raise money and distribute grants in a defined geographic area, continue to play an increasingly important role in philanthropy, there are signs that their rate of growth may have peaked. The increase in giving reported by the Columbus Foundation falls short of gains in previous years. Gifts to community foundations increased by 14 per cent in 1996, while in 1995 such donations jumped by 51 per cent.

Jim Luck, president of the Columbus Foundation, says that he believes that growth in community foundations will again accelerate in the coming years, as members of the World War II generation plan their estates and transfer their wealth, and as community foundations make greater use of planned gifts, which offer special tax and financial benefits to donors. He predicts that by 2002, community foundations will be receiving as much as $5-billion annually.

Another study on community foundations that was recently released sheds additional light on the growth of those organizations.

Conducted by the Council on Foundations, it surveyed 166 community foundations, including more than 70 per cent of those with assets of $100-million or more. Among the 135 community foundations that reported figures for both 1992 and 1996, assets climbed to $10.7-billion, an increase of 74 per cent.

The Council on Foundations’ study also looked at how the community foundations in the survey allocated their grant dollars. It found that in 1996, education programs received 23 per cent, the largest share of money to one cause. Social-service groups were next at 18 per cent, while arts and cultural organizations took in 15 per cent and health groups received 14 per cent of the grants made in 1996.

The council usually conducts its study every two years, but it decided to skip 1994 because of changes that were made in accounting rules. Under rules approved by the Financial Accounting Standards Board in 1993, pledges and other types of deferred gifts are supposed to be counted in the year that they are promised, even if the cash is not yet in hand.

A full copy of the Columbus Foundation’s report is available on the organization’s World-Wide Web site at http://www.columbusfoundation.org

For a copy of the Council on Foundations’ study, Community Foundations in the United States: 1996 Status, contact the Council on Foundations, P.O. Box 98293, Washington 20090-8293; or call (888) 239-5221. The report costs $60 for members and $100 for non-members.