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Foundation Giving Declines, Key Issues Gain Support in 2003

(April 11, 2005) Overall giving by the largest private and community foundations dropped 10 percent in 2003, according to the recent Foundation Giving Trends: An Update on Funding Priorities report from the Foundation Center. Despite the decrease in giving across most fields, funding of specific issues, including arms control, disaster preparedness, national security and voter education, grew substantially. Additionally, foundation dollars for operational functions reached a record high percentage of overall giving.

'The impact of stock market losses on giving by large foundations peaked in 2003,' said Loren Renz, vice president of research at the Foundation Center. 'Yet, funders maintained a consistent set of grantmaking priorities and managed also to respond to several emerging issues.'

Support Growth for Key Issues

In general, funding of most major areas saw a decline in support. Giving distribution remained consistent with past trends, with education capturing the greater share of grant dollars, followed by health. Interestingly, the only area to grow in 2003 was the public affairs/social benefit field due to timely issues. Within this category, voter education/rights grants tripled in response to the 2004 election activities, jumping from $4.7 million to $15.7 million.

Human services captured the greatest number of grants. Within human services, funding of disaster preparedness leapt $6.1 million to $24.2 million, nearly a quadruple increase from the previous year.

Greater Funding of General Operations

Another trend noted in the report is foundations are more greatly supporting the general operations of nonprofits. Funding for operational support accounted for an all-time high of 22 percent of grant dollars in 2003. In contrast, funding of capital support of projects such as building renovations, equipment and endowments dropped to an all-time low of 17 percent of the grant dollar pie.

Foundation Giving Trends records all grants of $10,000 or more by 1,010 of the largest U.S. foundations in 2003 and tracks funding trends since 1994. This group of foundations accounts for about half of all U.S. giving; grant dollars awarded in 2003 reached $14.3 billion. In the report, giving is analyzed by subject focus, recipient type, type of support, population served and geographic focus. The funding trends in foundation size, region and type are also broken out.

Highlights of the report are available gratis on the Foundation Center's website, http://fdncenter.org/research/. The full report is available for $45.

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