March 27, 2001. New York City. In a year that saw unbounded confidence in the nation's economy turn to increasing uncertainty, U.S. grantmaking foundations raised their contributions to nonprofit organizations a record $4.3 billion, according to a new report from the Foundation Center. Foundations gave an estimated $27.6 billion in 2000, up 18.4% (14.6% after inflation) over the $23.3 billion in giving now reported for 1999. Overall, giving has doubled since 1996. Community foundations experienced the fastest growth in giving in the latest year, followed closely by independent foundations. However, growth in corporate foundation giving slowed, already reflecting declining corporate profits and stock values.

The nearly one-fifth rise in 2000 giving followed five straight years of double-digit increases in the value of foundation assets. Between 1995 and 1999, foundation assets doubled from $226.7 billion to $448.6 billion. In 1999 alone, assets rose by $63.6 billion or 16.5%. Dramatic gains in the value of holdings of several major independent foundations, new gifts into foundations (including a record $32.1 billion in 1999), and accelerated growth in foundation creation have all contributed to an unprecedented run up in foundation assets.

"The sky did not fall on foundations during 2000," stated Sara Engelhardt, president of the Foundation Center. "Foundations have grown so rapidly since the mid-1990s that not even a volatile stock market and slowing economy could keep them from posting record growth in grant dollars." In addition, because many foundations have a substantial asset base, "they are better able to weather short-term economic downturns without cutting contributions. Giving by individuals and corporations is typically much more sensitive to economic fluctuations."

These findings are presented in Foundation Growth and Giving Estimates: 2000 Preview, part of the Foundation Center's Foundations Today Series of annual research reports. This 12-page summary provides a "first look" at 2000 giving together with aggregate 1999 giving and asset data for the more than 50,000 grantmaking foundations tracked by the Center. Projections for 2000 are based on figures reported by 1,660 large and mid-size foundations, combined with year-end fiscal indicators. The Center will release a more in-depth examination of 1999 foundation growth trends in Foundation Yearbook: Facts and Figures on Private and Community Foundations, available in June. An analysis of the areas of giving in 1999 for a sample of 1,016 larger foundations (accounting for half of all giving) is available in Foundation Giving Trends: Update on Funding Priorities, 2001 Edition.

2000 Independent Foundation Giving Increases 20%
Gates Foundation Receives Record $11.5 Billion Gift

Independent foundations raised their giving by an estimated 20.1% in 2000, following growth of 20.5% in 1999. Over two years, giving increased by nearly 45%, the strongest two-year gain on record. Since 1995, giving has more than doubled. Independent foundations, including family foundations and "new health foundations" (formed from health care conversions), contributed an estimated $21.6 billion in the latest year, up $3.6 billion from 1999. Exceptional growth in giving by the Bill & Melinda Gates Foundation (WA), combined with $100 million+ gains in grant payments by the Lilly Endowment (IN), David and Lucile Packard Foundation (CA), California Endowment (CA), and Robert W. Woodruff Foundation (GA), helped to push 2000 giving increases ahead of moderately slower overall growth in independent foundation assets. In 1999, the combined assets of independent foundations grew 16.6%, up from 15.7% in 1998, but down from 24.7% in 1997. Among top-ranked foundations, the median asset increase was a slightly higher 16.9%.

Independent and corporate foundations are required by law to pay out each year at least 5% of the value of their investments in the preceding year. (They may carry forward payout in excess of 5% over several years.) In 2000, estimated giving represented 5.7% of independent foundation assets in the prior year. This exceeded the 5.5% ratio of 1999 giving to 1998 assets. (In addition to grant payments reported here, calculations of payout also include other expenses, such as charitable loans, program expenses, and reasonable administrative costs.)

Corporate Foundations Raise Giving a More Modest 9%
Corporate Foundations First to Show Effects of Economic Slowdown

Showing the effects of weaker corporate profits and a volatile stock market, giving by corporate foundations grew an estimated 9.0% in 2000—roughly half the increase reported for independent and community foundations. Corporate foundations on average maintain much smaller asset bases than independent and community foundations and are therefore more likely to depend on annual gifts from their corporate donors to fund grants budgets. As a result, their giving is more vulnerable to sudden downturns in the economic climate.

The slower rate of growth in corporate foundation giving followed a very strong 15.0% increase in giving in 1999 and a record 18.7% gain in 1998. Estimated 2000 giving grew by $253.3 million to $3.1 billion, up from $2.8 billion in 1999 and $2.4 billion in 1998. Over two years, corporate foundation contributions rose 25.4%. The Ford Motor Company Fund (MI) ranked first among corporate foundations by overall giving in 1999 and led all other top corporate foundations with its nearly 177% growth in giving.

While the growth in corporate foundation giving has slowed over the past two years, corporate foundations have continued to build assets. In 1998 and 1999, the value of gifts into corporate foundations increased faster than giving. Overall, corporate foundation assets have grown 40.2% in the most recent two-year period, from $10.9 billion in 1997 to $15.3 billion in 1999. In the latest year alone, assets increased by $2.1 billion, with $499 million representing the excess of company gifts into their foundations (pay-in) over grants paid out. The balance of the increase resulted from higher stock values.

"With continuing volatility in the stock market and the economy," noted Sara Engelhardt, "it's unlikely that we'll see record growth in corporate foundation giving again anytime soon. The increasing number of corporate mergers will also have an effect on future growth in corporate foundation giving." Still, the doubling of corporate foundation giving since the early 1990s means that "corporate foundations will continue to be an important source of support for nonprofit organizations."

Community Foundations Experience Fastest Rise in Giving in 2000
Annual Gifts from Donors Reach a Record $3.3 Billion

Community foundation giving rose an estimated 21.5% in 2000, surpassing independent and corporate foundations but trailing a record 26.8% gain in 1999. Nonetheless, estimated giving grew a record $396.8 million to $2.2 billion in the latest year, up from $1.8 billion in 1999 and $1.5 billion in 1998. Community foundations have reported the fastest growth in giving every year since 1995, and their giving has nearly tripled in that time.

Growth in community foundation giving in 2000 was propelled by strong gains in the value of endowments. Assets of community foundations increased by $4.7 billion in 1999 to $27.6 billion, up 20.4%. New gifts from donors continued to expand resources. Overall, gifts into community foundations in 2000 jumped a record 27.6% to $3.3 billion, compared to a 16.1% rise in 1998.

Foundation Universe Nearly Doubles Since 1985
Number of Foundations Grows by More than 7% in Latest Year to 50,200

New foundations have been a key factor in increased grantmaking. Between 1985 and 1999, the number of grantmaking foundations nearly doubled—from about 25,600 to 50,200. Since 1995, the number of active foundations has risen by just over 10,000, or 5.8% a year. These newer grantmakers—primarily independent foundations—have greatly enhanced the long-term prospects for growth in giving, since the majority will receive their principal endowments over the next 15 years.

In 1999 alone, the overall number of active foundations rose by 7.2% or almost 3,400, the largest single-year increase in absolute number since the Center began tracking information on all private and community foundations in 1975. These newer funders gave out $362.4 million in grants and added $6.3 billion to foundation endowments, accounting for approximately one-tenth of the growth in both foundation giving and assets in 1999.

About the Foundation Center. Founded in 1956, the Foundation Center is the nation's leading authority on institutional philanthropy. The Center's mission is to support and improve institutional philanthropy by promoting public understanding of the field and helping grantseekers succeed.

About the Foundations Today Series. The Foundations Today Series provides the latest information on foundation growth and trends in foundation giving. The five reports in the 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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Copies of Foundation Growth and Giving Estimates can be accessed at no charge from the Foundation Center's Web site, http://www.foundationcenter.org. For media who would like to request a print copy of the report, call 212-807-2475. "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://foundationcenter.org/research/trends_analysis.

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