Foundation Giving Grew at Steady, Moderate Pace in 2005
New York, NY — April 4, 2006. Giving by the nation’s 68,000 grantmaking foundations grew to $33.6 billion in 2005, according to Foundation Growth and Giving Estimates: Current Outlook, a new report from the New York City-based Foundation Center. This estimated 5.5 percent increase was consistent with the 5.1 percent gain recorded in 2004. Continued, albeit slower stock market growth, higher levels of new gifts into corporate and community foundations, and the giving of newly established foundations were the primary factors in 2005 growth. Exceptional grantmaking in response to the South Asian tsunami and Gulf Coast hurricanes also helped to raise the overall level of giving.
The steady but unremarkable growth in foundation giving was reflected in funders’ grantmaking strategies. According to the Foundation Center’s 2006 “Foundation Giving Forecast Survey,” roughly 32 percent of foundations increased the number of grants they made in 2005—nearly unchanged from 2004. Similarly, the 28 percent share of respondents that increased the number of nonprofit organizations they supported was also consistent with the prior year. In a period of more substantial asset growth, these shares would undoubtedly be larger.
Conditions Limit Growth in 2006 Foundation Giving
For endowed foundations—including most of the nation’s largest grantmakers—the lingering impact of the economic downturn in the early 2000s, continued variability in market performance, and a lack of strong and consistent growth in assets will limit increases in their giving in 2006. Overall, assets of U.S. foundations increased by an estimated 2 to 4 percent in 2005, down substantially from a 7.1 percent gain in 2004 and a close to 10 percent rise in 2003. Just over half of survey respondents expected to increase their giving in 2006. However, the share that expected to reduce giving climbed to 32 percent, up from 25 percent last year and 18 percent in 2004. Thus, it appears improbable that foundation giving will increase more than a few percentage points in 2006. Accounting for inflation, giving will be pretty much flat.
“Most foundations have not experienced a robust recovery in their assets,” noted Sara Engelhardt, president of the Foundation Center, “and the outlook for 2006 is uncertain at best. Some funders—notably community foundations—may show bigger increases, but overall giving will likely hold steady. In the case of community foundations, continued strong growth in their pool of donors and in exceptionally large gifts from their donor-advised funds will help them to maintain faster rates of growth in giving.”
About the Foundation Giving Survey
Giving projections for 2005 and 2006 reported in Foundation Growth and Giving Estimates are based on responses to the Foundation Center’s 2006 “Foundation Giving Forecast Survey” from more than 850 large and mid-size foundations across the country, combined with year-end fiscal indicators. Survey respondents also provided information on their changing grantmaking strategies and on their giving in response to hurricanes Katrina and Rita, as well as other disasters. (The Center will release a detailed analysis of the Gulf Coast hurricane-related responses in early August.) The report also presents findings on actual 2004 giving and assets tracked by the Foundation Center for the almost 68,000 independent, corporate, community, and grantmaking operating foundations in the United States.
Foundation Growth and Giving Estimates is part of the annual Foundations Today Series on foundation growth and giving and can be downloaded at no charge from the Gain Knowledge area of the Foundation Center’s web site. The Center will release an in-depth examination of 2004 foundation trends in Foundation Yearbook: Facts and Figures on Private and Community Foundations in late June. “Highlights” of Foundation Giving Trends, 2006 edition, the Foundation Center’s annual examination of funding trends of nearly 1,200 of the largest U.S. foundations (published in March), are also available at the Gain Knowledge area of the web site. These reports are available separately or through subscription to the complete series ($95) and can be purchased at the Foundation Center’s online Marketplace.
About the Foundation Center
Established in 1956, and today supported by more than 600 foundations, the Foundation Center is the nation’s leading authority on philanthropy, connecting nonprofits and the grantmakers supporting them to tools they can use and information they can trust. The Center maintains the most comprehensive database on U.S. grantmakers and their grants—a robust, accessible knowledge bank for the sector. It also operates research, education, and training programs designed to advance philanthropy at every level. More than 37,000 people visit its web site each day, and thousands more are served in its five regional library/learning centers and its national network of nearly 250 Cooperating Collections. For more information, please visit foundationcenter.org or call 212-620-4230.
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