Foundation Giving Stabilizes After Six Years of Growth
(AFP eWire - April 18, 2003) - Giving by U.S. foundations remained steady in 2002, but a decline is expected in 2003 as the economy woes catch up, a new report shows.
Giving by the country's nearly 62,000 grantmaking foundations in 2002 was $30.3 billion compared to $30.5 billion in 2001, according to 'Foundation Growth and Giving Estimates: 2002 Preview,' a report released at the end of March by the Foundation Center.
The stability follows six consecutive years of double-digit percentage growth, the report said. The stability in the midst of a struggling economy was attributed to several factors, including:
- giving by newly active foundations established near the end of the recent economic boom brought additional resources to the field;
- a high level of gifts and bequests reduced losses to foundation endowments, limiting cuts in giving;
- financial commitments after the Sept. 11 terrorist attacks continued; and
- some foundations worked to maintain stable levels of giving or limit reductions.
'The stability of giving in 2002 reflects how large and diverse the U.S. foundation community has become,' said Sara Engelhardt, president of the Foundation Center. 'Although most of the largest foundations lost assets in the stock market decline, several smaller and newer foundations helped to mitigate decreases reported by many of the bigger foundations.'
Two straight years of a drop in foundation assets and a still shaky economy and stock market forecast a probable drop in foundation giving in 2003, the report said. In addition, about two-thirds of funders surveyed by the Foundation Center expected a decrease in giving in 2003. However, three-fifths expected their giving to remain the same or increase.
'Many funders made exceptional efforts in 2002 to avoid cuts in giving and will do what they can to limit large reductions in 2003,' Engelhardt said. 'Continuing losses in endowment values, especially among the largest U.S. foundations, will take a toll on overall levels of giving. But foundations understand better than most the devastating impact of state and local government budget cuts on the finances of nonprofits.'
Giving by independent foundations declined
Giving by independent foundations decreased slightly, by 1.5 percent, in 2002, the first drop in at least 15 years. Such foundations, which include family foundations and 'new health foundations' formed from health care conversions, account for the majority of foundations and most of the giving.
Independent foundation giving dropped from $23.7 billion to an estimated $23.3 billion, the first decrease since the Foundation Center began separate tracking of independent foundations in 1987.
Giving by corporate foundations continued to rise, from $73.7 million in grants in 2001 to an estimated $3.4 billion last year. The 2.2 percent increase follows a 10 percent increase in 2001.
Community foundation giving also increased but only slightly, from $2.4 billion in 2001 to an estimated $2.46 billion in 2002. The 2.6 percent increase halted a seven-year stretch of double-digit percentage increases. It was the slowest growth since 1994, reflecting a decline in the level of gifts received from donors, according to the report.
The report is based on 2001 giving for approximately 62,000 U.S. grantmaking foundations tracked by the Foundation Center. Projections for 2003 are based on fiscal indicators, supplemental reporting by donors of contributions stemming from the Sept. 11, 2001, terrorist attacks and on the center's 2003 'Foundation Giving Forecast Survey' of more than 760 foundations. For a copy of the report, visit the Foundation Center website.