Foundation Giving Rebounded in 2004
SURVEY POLLS GRANTMAKERS ON GIVING AND ACCOUNTABILITY ISSUES
New York, N.Y., April 4, 2005—Giving by the nation's more than 66,000 grantmaking foundations increased to a new high of $32.4 billion in 2004, according to Foundation Growth and Giving Estimates: 2004 Preview, a new report from the New York-based Foundation Center. This estimated 6.9 percent rise reversed two years of modest reductions. The beginning of a stock market recovery and higher levels of new gifts into existing foundations in 2003 were the primary factors driving up 2004 giving. Newly established foundations also contributed to the growth.
Accompanying the rise in giving was an increase in the number of grants made. Close to one-third of respondents to the Foundation Center's 2005 "Foundation Giving Forecast Survey" reported awarding more grants in 2004 than in the prior year, up from roughly one-fifth of respondents in 2003. However, foundations remained cautious about the number of multi-year grants they made and the proportion of capital grants they awarded, increasing them only slightly.
Foundation Giving Likely to Grow More Slowly in 2005
A year-end stock market rally contributed to an estimated 4 to 6 percent increase in foundation assets. However, this rise represented roughly half the gain recorded in 2003, and the assets of many foundations remain below their peak levels in 2000. As a result, while more than half of survey respondents indicated that their giving would increase in 2005, one-fourth of respondents expected to reduce giving. This compared to the 18 percent of respondents who expected to cut their giving last year. Thus, while the modest rise in assets in 2004 and generally optimistic outlook for the economy this year suggest that foundation giving will continue to increase in 2005, its growth is likely to fall below the nearly 7 percent rate recorded in 2004.
"Foundations regained their footing in 2004," noted Sara Engelhardt, president of the Foundation Center, "but there will be no return to the boom years of the late 1990s soon. We are likely to see positive but unremarkable growth in foundation giving in the immediate future."
Majority of Foundations Believe Calls for
Greater Accountability Are Justified
In a period of increased public scrutiny, nearly 57 percent of survey respondents felt that calls for greater accountability and transparency were justified. Community foundation and mid-size and larger foundation respondents (those giving at least $1 million) were most likely to agree with the public's demand for greater accountability. By comparison, 17 percent of respondents felt the calls were not justified, with independent foundation and smaller foundation respondents (those giving less than $1 million) more often providing this answer. Interestingly, just over 26 percent of respondents expressed no opinion about the issue. This may mean that a significant share of foundations have not felt directly affected by questions of foundation accountability, either due to their own relatively small size or their strict adherence to existing regulations.
About the Foundation Giving Survey
Giving projections for 2004 and 2005 reported in Foundation Growth and Giving Estimates are based on estimates provided in response to the Foundation Center's 2005 "Foundation Giving Forecast Survey" by more than 940 large and mid-size foundations across the country, combined with year-end fiscal indicators. Survey respondents also provided information on their changing grantmaking strategies, use of operating support, and number of proposals received and proportions funded and on their views about the need for increased foundation accountability and transparency. The report presents findings on actual 2003 giving and assets as tracked by the Foundation Center for all 66,000+ U.S. independent, corporate, community, and operating foundations.
Foundation Growth and Giving Estimates is part of the annual Foundations Today Series on foundation growth and giving and can be accessed at no charge from the "Researching Philanthropy" area of the Foundation Center's Web site. The Center will release an in-depth examination of 2003 foundation trends in Foundation Yearbook: Facts and Figures on Private and Community Foundations in late June. "Highlights" of Foundation Giving Trends, 2005 Edition, the Foundation Center's annual examination of funding trends of more than 1,000 of the largest U.S. foundations (published in February), are also available at www.foundationcenter.org/gainknowledge/research/nationaltrends.html. These reports are available separately or through subscription to the complete series ($95) and may be purchased at the Foundation Center's online 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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