FOR IMMEDIATE RELEASE, CONTACT: Steven Lawrence, Director of Research , (212) 807-2410
March 29, 2000
Foundation Center Announces Estimates for 1999 Foundation Giving
Giving Up 17 Percent, Following 22 Percent Jump in 1998
CORPORATE FOUNDATIONS LEAD GROWTH IN GIVING FOR
FIRST TIME IN 1990s
March 29, 2000. New York City. In 1999, U.S. grantmaking foundations contributed an estimated $22.80 billion to nonprofit organizations, according to a new report from the Foundation Center. This represents a 17.2 percent increase over the $19.46 billion in actual giving now reported for 1998. (Actual 1998 giving figures compiled from tax returns matched last year's estimates by the Foundation Center.) Reversing recent trends, corporate foundations outperformed all other foundation types in growth of giving; estimated contributions increased a record 22.2 percent in 1999.
While grants continued their double-digit climb, inflation stayed around 2 percent. In real terms, giving grew by 15.1 percent in 1999 and 19.7 percent in 1998. The expanding economy, dramatic gains in the value of holdings of several major independent foundations, a record rise in the value of corporate foundation endowments, and a record $22.6 billion in new gifts into foundations propelled the most recent growth in giving. Rapid gains in foundation creation over the past decade—including more than 6 percent growth in the number of active foundations in both 1997 and 1998—also contributed to this increase.
These findings are presented in Foundation Growth and Giving Estimates: 1999 Preview, part of the Foundation Center's new Foundations Today Series of annual research reports. This 12-page summary provides a "first look" at 1999 giving and actual aggregate 1998 giving and asset data for the nearly 47,000 grantmaking foundations tracked by the Center. 1999 projections are based on survey figures reported by 1,300 large and mid-size foundations combined with year-end fiscal indicators. The Center will release a more in-depth examination of 1998 growth trends in Foundation Yearbook: Facts and Figures on Private and Community Foundations, available in June. An analysis of the areas of giving in 1998 for a sample of 1,009 larger foundations (accounting for half of all giving) is available in Foundation Giving Trends: Update on Funding Priorities, 2000 Edition.
1999 Independent Foundation Giving Increases 17 Percent
Gates and Packard Foundations Propel Giving Ahead of 1998 Asset Growth
Independent foundations raised their giving by an estimated 17.3 percent in 1999, following actual growth of 20.7 percent in 1998. Over two years, giving increased by 41.6 percent, the strongest two-year gain on record. Independent foundations, including family and private health care conversion foundations, contributed an estimated $17.52 billion in the latest year, up $2.56 billion from 1998. Exceptional growth in giving by the Bill & Melinda Gates Foundation and the David and Lucile Packard Foundation helped to push 1999 giving increases ahead of moderately slower overall growth in independent foundation assets. In 1998, the combined assets of independent foundations grew 15.7 percent, down from 24.7 percent in 1997 and 18.2 percent in 1996. Among top-ranked foundations, the median asset increase was only 9.5 percent.
Independent and corporate foundations are required by law to pay out each year at least 5 percent of the value of their investments in the preceding year. (They may carry forward payout in excess of 5 percent over several years.) In 1999, estimated giving represented 5.4 percent of independent foundation assets in the prior year. This exceeded the ratio of actual 1998 giving to 1997 assets. (In addition to giving, payout also includes other expenses, such as charitable loans, program expenses, and reasonable administrative costs.)
Corporate Foundations Experience Record 22 Percent Growth in 1999 Giving
Gains in Value of Foundation Assets Drive Increase
Giving by corporate foundations grew an estimated 22.2 percent in 1999—surpassing both independent and community foundations—and an actual 18.4 percent in 1998. Estimated 1999 giving jumped to $2.99 billion, up from $2.45 billion in 1998 and $2.07 billion in 1997. Over two years, corporate foundation contributions rose 44.6 percent, the highest consecutive-year gain reported since the mid-1980s, the last period of strong growth in corporate foundation philanthropy. The UPS Foundation (GA) led all other top corporate foundations by growth of giving in 1998; the Bank of America Foundation (NC) ranked first by overall giving.
Record increases in corporate foundation giving have resulted largely from a boost in the value of foundation assets. Following a decline in their asset base in the last recession, corporate foundations spent the mid-1990s rebuilding their endowments. In 1993 through 1996, increases in giving trailed prior-year gains in asset values. Beginning in 1997, this pattern reversed as giving began to rise faster than assets.
A vibrant U.S. economy, record increases in the value of corporate stocks, and a rise in the size of large gifts from companies to their foundations have significantly replenished endowments, which consist primarily of parent company stock. In 1998, corporate foundation assets grew 20.4 percent to $13.11 billion. More than nine-tenths of this $2.22 billion rise resulted from higher stock values. An additional $207.73 million represented the excess of company gifts into their foundations (pay-in) over grants paid out.
"1999 was a watershed for corporate foundations," stated Sara Engelhardt, president of the Foundation Center. "They have been building their assets for several years, and the impact of that trend is making itself felt in greatly increased giving. This is good news for communities that rely on companies as a key source of private giving."
Annual Gifts from Donors Reach $2.6 Billion
Community foundation giving rose an estimated 14.9 percent in 1999, trailing an actual 22.3 percent increase in 1998 and a record 25.3 percent gain in 1997. Still, estimated giving grew a robust $217.90 million to $1.68 billion in the latest year, up from $1.46 billion in 1998. Since 1995, giving by community foundations has more than doubled, outpacing all other types of foundations.
Growth in community foundation giving in 1999 was propelled by solid growth in the value of endowments. Assets of community foundations increased by $3.25 billion in 1998 to $22.95 billion, up 16.5 percent. New gifts from donors continued to expand resources. Although they did not match the prior year's gain, new gifts into community foundations grew 16.1 percent to $2.58 billion, compared to a 21.5 percent jump in 1997.
Foundation Universe More Than Doubles Since 1980
Number of Foundations Grows by Over 6 Percent in both 1997 and 1998
New foundations have been a key factor in increased grantmaking. Between 1980 and 1998, the number of grantmaking foundations more than doubled—from just over 22,000 to close to 47,000. In just the two most recent years, the number of grantmakers grew by over 5,200, or more than 6 percent a year. These newer grantmakers—primarily independent foundations—have greatly enhanced the long-term prospects for growth in giving, since the majority are expected to receive their principal endowments over the next 15 years.
In 1998 alone, the overall number of active foundations rose by nearly 2,700, the largest single-year increase recorded since the Center began tracking information on all private and community foundations in 1975. Almost 3,100 foundations initiated or resumed giving during the latest reporting period, while only about 400 ceased activity. These funders gave out nearly $700 million in grants and added $10.4 billion to foundation endowments, accounting for approximately one-fifth of the growth in both foundation giving and assets in 1998.
"Foundation giving continues to expand, affording new possibilities for ameliorating social ills, enriching lives in our communities, improving the chances for all children, and increasing knowledge in all fields of endeavor," stated Sara Engelhardt. "This trend is fueled by many factors-new donors and new foundations, a strong stock market, and a healthy corporate sector. This means that we can probably count on vigorous growth in foundation giving well into the future."
About the Foundation Center. The Foundation Center is an independent nonprofit organization established by foundations in 1956. Our mission is to foster public awareness and understanding of the foundation field.
About the Foundations Today Series. The successor to the Foundation Center's popular Foundation Giving report, the Foundations Today Series provides the latest information on foundation growth and trends in foundation giving. The five reports in this annual series—Foundation Giving Trends, Foundation Growth and Giving Estimates, Foundation Yearbook, Foundation Staffing, and Foundation Reporting—present detailed analyses of foundation grantmaking trends based on a sample of larger U.S. foundations, examine growth in the resources of active U.S. foundations, identify differences among grantmakers by foundation type, document foundation staffing patterns, and explore foundation reporting practices.
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"Highlights" of Foundation Giving Trends, 2000 Edition, the Center's annual examination of funding trends of more than 1,000 larger U.S. foundations, are available at http://fdncenter.org/grantmaker/trends/index.html.