International Giving by U.S. Foundations
Reaches $3 Billion for Fourth Consecutive Year
Funders Concerned that Anti-terrorism Guidelines Could Hurt Future Grantmaking
New York, NY, November 8, 2004—Annual foundation funding for international programs reached $3 billion for the fourth year in a row in 2003, despite an economic downturn, terrorist attacks, and the launch of an ongoing war on terror, according to International Grantmaking III: An Update on U.S. Foundation Trends, a new report prepared and published by the New York City-based Foundation Center with the support and collaboration of the Council on Foundations in Washington, DC.
International Grantmaking III examines patterns in international giving based on an analysis of grants made by the nation's largest foundations and includes the results of a recent survey of the largest U.S.-based international funders.
As recently as 1998, grants for U.S.-based and overseas international projects totaled only $1.6 billion. Critical factors in the consistently high level of giving in recent years include the presence of new international funders on the scene—ranging from the multi-billion-dollar Bill & Melinda Gates and Gordon and Betty Moore foundations, to numerous smaller independent and corporate foundations and an increasing number of community foundations—and increased giving by many established funders.
Although most survey respondents expect their giving to remain steady or increase in 2004, nearly eight out of ten believe that international giving is now more difficult due to a more demanding and uncertain regulatory environment. Among their concerns are Executive Order 13224, which prohibits transactions with organizations deemed to be associated with terrorism, and certain provisions of the Patriot Act. In addition, nearly 70 percent feel that the war on terrorism makes overseas funding more difficult due to increased security risks.
"International grantmakers are facing a period of prolonged uncertainty," noted Loren Renz, vice president for research at the Foundation Center and principal author of the report. "A marked increase in the number of international funders since the late 1990s is being tempered by greater caution in response to new post-9/11 funding guidelines."
"Foundations are the face of a generous and compassionate America internationally," said Dorothy S. Ridings, president and CEO of the Council on Foundations. "Despite the economic downturn and new regulatory procedures, U.S. foundations and corporate grantmakers have shown a strong and growing commitment to engage with the world outside our borders. Increased funding contributes to efforts to discourage terrorism, raise living standards, improve human rights, and build democracy and civil societies."
Report Documents Trends in International Giving by Foundations
International Grantmaking III: An Update on U.S. Foundation Trends—the latest study in the Foundation Center's benchmark series on international giving-examines patterns in giving through 2002 based on an analysis of all grants of at least $10,000 awarded by more than 1,000 of the nation's largest grantmaking foundations; provides 2003 estimates of international giving by all U.S. foundations; and explores changes in foundation and corporate grantmakers' strategies, practices, and future outlook based on a 2004 survey. "Highlights" of International Grantmaking III can be downloaded for free at www.foundationcenter.org/gainknowledge/research/internationaltrends.html.
Among key findings from the report:
International Giving Grew Faster than Overall Giving Between 1998 and 2002. The analysis of foundation grants shows that contributions of nearly $2.2 billion for international programs in 2002 was more than double the $1.07 billion awarded in 1998. This 106 percent rise far surpassed the 63 percent increase in overall giving. As a result, the share of grant dollars targeting international causes climbed to 14 percent in 2002, up from 11 percent in 1998. Close to half of the gain in international grant dollars was attributable to the dramatic growth in funding by the Bill & Melinda Gates Foundation. Yet several of the leading international funders—such as the Carnegie Corporation and the Citigroup, Freeman, and Hewlett foundations—posted very strong increases in giving over this period. Excluding Gates, international giving by sampled funders rose 57 percent, exceeding the 53 percent gain in overall giving.
Health Benefited from Fastest Growth and Largest Share of International Support. The $1.1 billion rise in international giving between 1998 and 2002 benefited every major program area, but gains were extremely uneven. Health posted by far the fastest growth, as its share of giving doubled to 32 percent. This dramatic increase reflected the Gates Foundation's emergence as the foremost global health funder, a growing philanthropic response to the global AIDS crisis, and continued strong support for reproductive health care. Other program areas that showed record gains in support included public affairs/society benefit (e.g., government affairs and civil society), the environment, science and technology, and religion.
Asia Displaced Western Europe as Top Recipient of Overseas Funding. Foundations directed the largest shares of their overseas funding to Asia, Western Europe, Latin America, and Sub-Saharan Africa in 2002. Asia—which ranked second by overseas grant dollars in 1998—accounted for more than 23 percent of giving in the latest sample, surpassing Western Europe (21.5 percent). Moreover, roughly two-thirds of funding targeting West Europe supported programs benefiting other regions.
Despite Losses in Foundation Resources, Most Survey Respondents Expected Their International Funding to Remain Steady or Increase in 2004. A three-year decline in the stock market led to reduced foundation assets and a modest reduction in overall foundation giving in 2002 and 2003. Yet, close to nine out of ten survey respondents indicated that they expected their 2004 international giving to either remain unchanged (50 percent) or increase (almost 38 percent). Moreover, half of all corporate respondents anticipated increased giving in 2004. Despite these positive indicators, new regulations instituted in the wake of 9/11 and an uneven economic recovery could hamper international giving in the years ahead.
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, it 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.
ABOUT THE COUNCIL ON FOUNDATIONS
Founded in 1949, the Council on Foundations is a nonprofit membership association of grantmaking foundations and corporations. The Council's mission is to promote responsible and effective philanthropy. Members of the Council include more than 2,000 independent, operating, community, public, and company-sponsored foundations; corporate giving programs; and foundations in other countries. Council members make grants both domestically and internationally. Through their subscription to a set of Principles and Practices for Effective Grantmaking, Council members provide leadership in public accountability in the field of organized philanthropy.
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