Foundations Remained Focused on Core Priorities,
Despite Difficult Economic Climate
New York, NY, March 1, 2004 —In a climate of shrinking endowments, U.S. foundations did not lose sight of their core funding priorities. According to the Foundation Center's new report, Foundation Giving Trends: Update on Funding Priorities, most fields—from the arts, to education, to human services—received generally consistent shares of grant dollars. Nonetheless, giving by a sample of over 1,000 of the largest private and community foundations decreased 5 percent between 2001 and 2002. Grant dollars totaled $15.9 billion, or more than half of overall U.S. foundation giving that year.
"Foundations largely stuck by their missions and grantees in the bleak economic environment of 2002" noted Loren Renz, vice president for research at the Foundation Center. However, funding strategies did change. "Given declining endowments, foundations shied away from making as many major capital commitments and tried to shore up grantees with increased operating support."
Report Documents Trends in Foundation Giving
Foundation Giving Trends documents all of the grants of $10,000 or more awarded by 1,005 of the largest U.S. foundations in 2002 and tracks changes in funding trends since 1990. The report examines giving by subject focus, recipient type, type of support, population group served, and geographic focus. It also details differences in funding trends by foundation size, region, and type, and includes special analyses of giving by foundations versus all private donors. In addition, the 2004 edition includes information on 9/11-related giving in 2002 by sampled foundations. Foundation Giving Trends is part of the Foundations Today Series of annual research reports on foundation growth and trends in foundation giving.
Among the key findings from the report:
Giving by Types of Support
General support grants reached record-high share, while capital grants dropped to record-low share. In response to the economic slowdown, foundations shied away from making as many major capital commitments and instead focused more on helping nonprofits sustain their operations in a more difficult economic environment. As a result, funding for general or unrestricted support reached a record-high 19 percent share of grant dollars and 24 percent share of grants in 2002. In contrast, capital support—including funding for building and renovation, equipment, technology, and endowments—declined to a record-low 19 percent of grant dollars.
Giving by Subject Focus
Funding for health showed most notable decrease among major program areas. While funding priorities remained largely consistent, more than half of the major fields experienced decreases in actual grant dollars in 2002. Health posted the largest reduction—15 percent to $2.9 billion—and this represented the first recorded decline since 1994. Nevertheless, health continued to account for the second largest share of overall foundation support (18.3 percent), behind education (26.4 percent). Among grants benefiting health was the largest reported in the 2002 sample: the Bill & Melinda Gates Foundation's $200 million award to the Foundation for the National Institutes of Health to develop a funding mechanism to accelerate progress in addressing diseases of the most impoverished people in the world.
Giving by Populations Served
Economically disadvantaged captured record-high share of grant dollars for the first time. Foundations in the sample directed about two-fifths of grant dollars and nearly half of grants to benefit specified population groups in 2002. Among specified beneficiaries, the economically disadvantaged ranked first by share of overall grant dollar commitments—just overtaking children and youth for the first time (16.7 percent vs. 16.4 percent). Funding for this population group rose 30 percent between 2001 and 2002, which may partially reflect efforts by some foundations to focus their more limited resources on the neediest populations. At the same time, children and youth continued to account for by far the largest share of number of grants (over 22 percent).
International Giving
International support lost share overall, although giving to overseas recipients increased. International giving—which includes grants to overseas recipients and funding for international programs in the U.S.—declined 11 percent in 2002 to $2.2 billion. As a share of overall foundation funding in the sample, international giving decreased from nearly 15 percent to under 14 percent. Nonetheless, giving to overseas recipients increased from $771 million to $843 million. Reflecting the impact of 9/11, several leading international funders committed grants for projects ranging from preventing international bioterrorism, to understanding the foreign policy implications of the "war on terrorism," to monitoring recovery efforts in Afghanistan.
Foundation Giving Resources
Foundation Giving Trends is part of the annual Foundations Today Series of reports on foundation growth and trends in foundation giving. Other reports in the series include Foundation Growth and Giving Estimates (March) and Foundation Yearbook (June).
"Highlights" of Foundation Giving Trends and other Foundation Center research publications can be accessed at no charge from the "Researching Philanthropy" area of the Foundation Center's Web site, www.foundationcenter.org/research. The report is available for $45 or through subscription to the three-part Foundations Today Series ($95). Discounts are available on bulk orders, which can be placed at the Foundation Center's online Marketplace, www.foundationcenter.org/marketplace.
About the Foundation Center
The Foundation Center's mission is to strengthen the nonprofit sector by advancing knowledge about U.S. philanthropy. To achieve its mission, the Center: collects, organizes, and communicates information on U.S. philanthropy; conducts and facilitates research on trends in the field; provides education and training on the grantseeking process; and ensures public access to information and services through its Web site, print and electronic publications, five library/learning centers, and a national network of Cooperating Collections. Founded in 1956, the Center is the nation's leading authority on philanthropy and is dedicated to serving grantseekers, grantmakers, researchers, policymakers, the media, and the general public.
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