Philanthropy Infrastructure Groups Drew $1.9 Billion in Support, Study Says

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From 2004 through 2015, foundations directed $1.9 billion to grantees that support the work of nonprofits and the practice of philanthropy. But in recent years the growth of funding in that area lagged far behind the increase in total foundation giving, according to a study released today.

Over all, foundation grants increased 29 percent from 2013 to 2015, according to a study conducted by the Foundation Center. But grants to so-called infrastructure organizations — including national groups like Independent Sector and the Council on Foundations, regional grant-making networks, and research organizations like the Foundation Center itself — grew 7 percent during that time, to $192 million annually.

“Foundation funding for infrastructure has not kept pace,” said Larry McGill, vice president for knowledge services at the Foundation Center.

When measured as a share of total grant funding, infrastructure support sank to a 12-year low in 2015. That year, infrastructure grants accounted for 0.59 percent of total foundation support, down from a 2006 high of just under 1 percent.

Broader Support

One bright spot is that grant-maker funding for infrastructure groups has become significantly more diversified.

The Ford, Gates, and Kellogg foundations provided 31 percent of the overall funding for infrastructure groups in the three years that ended in 2006. But for the three years ending in 2015, that figure had fallen to 17 percent as other grant makers accounted for a larger share of support.

“The field is much less reliant on a small cadre of foundations that support infrastructure,” McGill said. “Other funders are coming into the space.”

Most of the infrastructure support came from a group of 20 large foundations.

The share of funding that came from other institutions grew from an average of 38 percent to 48 percent during the same time periods.

Fewer Grant Recipients

From 2004 to 2015, 881 grant makers provided funds to 511 infrastructure organizations. The number of grantees each year has declined since 2011. That year foundations gave to 328 organizations. In 2015, that total had dropped more than 12 percent, to 287.

The study looked at grants to philanthropy-focused, nonprofit-focused, and multisector organizations.

Philanthropy organizations include population-focused groups, like the Disability Funders Network and the Women’s Funding Network, geographic and issue-based organizations, and nonprofits that support philanthropy in general.

Nonprofit organizations include information-services groups like Charity Navigator and GuideStar, service providers including BoardSource and Network for Good, and nonprofit associations, such as the Association for Fundraising Professionals.

Multisector groups include independent and university research centers, consulting groups, and public-policy organizations,

Technology Demand

The drag on infrastructure support growth was due to declines in grants to philanthropy-focused and multisector organizations. Meanwhile, average annual grants to organizations that serve nonprofits increased 24 percent in the three years that ended in 2015, compared with the previous three-year period. The reason for growth on the nonprofit side, McGill said, is that there has been an increased demand for technologies and services those groups provide that facilitate giving.

The slowdown in infrastructure spending over all isn’t necessarily permanent, McGill said. Support groups can provide a lot of help for nonprofits that want to learn about other donors, giving patterns in specific geographic areas and the results that donations yield.

“You want philanthropic decisions to be as smart as possible,” he said. “If people make that connection, it will bode well for infrastructure spending.”