Foundation Giving In 2011 Essentially Flat
posted on: Friday, June 22, 2012
By Niki Jagpal
The Foundation Center released its Foundation Growth and Giving Estimates this month. The first sub-header states “Growth in Foundation Giving Fails to Keep Pace with Inflation.” Although there was a modest increase in giving by U.S. foundations in 2011 (2.2 percent), the publication notes that if the Bill & Melinda Gates Foundation is excluded from the analysis, giving “would have been flat before taking inflation into account and down by roughly 3 percent after inflation.” Foundations granted out a total of $46.9 billion in 2011, a slight increase over the total of $46.8 billion which was the highest level of giving recorded until now in 2007
Surveyed foundations stated that the continued economic crisis in 2011 was the reason for more than one-third of respondents having scaled back their giving in 2011. The Center notes that although U.S. foundations regained over 9 percent of their asset value in 2010, market volatility during 2011 led to a marginal increase of 0.3 percent in asset value to roughly $646.1 billion. This figure is notably below the record $682.2 billion recorded in 2007.
Should foundations be praised for granting out a similar level of money to a time when their assets were at their highest? Perhaps, or maybe not – not only has there been an increase in the total number of foundations in the interim, but the economic volatility has had a devastating effect on grantees. Consider the fact that according to a study by the Data Center and the National Organizers Alliance, since the recession hit in 2008, nonprofits have experienced shrinking budgets in the midst of much higher demand for services. Grassroots organizations have been particularly hard-hit – four out of ten organizations are depleting resources, and one-third are living month-to-month. In fact, at least one organization shuts down every month. Clearly, non-grantmaking nonprofits are continuing to feel the sting of the recession as much, if not more, than foundations.
Further, while corporate foundations increased their giving to a total of $5.2 billion in 2011 (a rise of 6 percent compared to 2010), independent foundations increased their giving modestly by 1.9 percent while community foundations giving declines marginally by 0.1 percent between the two years. Additionally, while 44 percent of grantmakers expect to maintain or increase their giving levels in 2012, approximately 9 out of every ten foundations do not expect to make any changes in the number of program or geographic areas in which they work. The Center notes that across giving strategies, an overwhelming majority of funders expect to make no changes and that the proportion that state they will increase their giving is effectively wiped out by the proportion that state they anticipate decreasing their giving. And most importantly, a substantial proportion of funders expect to decrease their provision of multi-year support (roughly 20 percent).
Are domestic economic uncertainty and a volatile international debt crisis good enough reasons for foundations to effectively continue business as usual? Grantees are left hamstrung, unable to keep pace with inflation, laying off staff and depleting their reserves. It is time for our nation’s grantmakers to truly engage with their grantees. As Grantmakers for Effective Organizations recent survey of its members found, those foundations that actually listen to their grantees are more likely to provide them with the types of support that they need, i.e., core or general operating support and multi-year funding.
That two out of every five foundations expect to reduce their giving in 2012 is a cause for concern not just for grantees but for our sector as a whole because of the increased demand for services from grantees and the limitations on their ability to respond to these in light of shrinking budgets.
Does your foundation plan to increase or decrease its giving in 2012? Your grantees would certainly love to know from you.
Niki Jagpal is research and policy director at the National Committee for Responsive Philanthropy (NCRP).
Labels: Data Center, economic recession, Foundation Center, giving forecast 2012, Grantmakers for Effective Organizations, National Organizers Alliance
By Niki Jagpal
The Foundation Center released its Foundation Growth and Giving Estimates this month. The first sub-header states “Growth in Foundation Giving Fails to Keep Pace with Inflation.” Although there was a modest increase in giving by U.S. foundations in 2011 (2.2 percent), the publication notes that if the Bill & Melinda Gates Foundation is excluded from the analysis, giving “would have been flat before taking inflation into account and down by roughly 3 percent after inflation.” Foundations granted out a total of $46.9 billion in 2011, a slight increase over the total of $46.8 billion which was the highest level of giving recorded until now in 2007
Surveyed foundations stated that the continued economic crisis in 2011 was the reason for more than one-third of respondents having scaled back their giving in 2011. The Center notes that although U.S. foundations regained over 9 percent of their asset value in 2010, market volatility during 2011 led to a marginal increase of 0.3 percent in asset value to roughly $646.1 billion. This figure is notably below the record $682.2 billion recorded in 2007.
Should foundations be praised for granting out a similar level of money to a time when their assets were at their highest? Perhaps, or maybe not – not only has there been an increase in the total number of foundations in the interim, but the economic volatility has had a devastating effect on grantees. Consider the fact that according to a study by the Data Center and the National Organizers Alliance, since the recession hit in 2008, nonprofits have experienced shrinking budgets in the midst of much higher demand for services. Grassroots organizations have been particularly hard-hit – four out of ten organizations are depleting resources, and one-third are living month-to-month. In fact, at least one organization shuts down every month. Clearly, non-grantmaking nonprofits are continuing to feel the sting of the recession as much, if not more, than foundations.
Further, while corporate foundations increased their giving to a total of $5.2 billion in 2011 (a rise of 6 percent compared to 2010), independent foundations increased their giving modestly by 1.9 percent while community foundations giving declines marginally by 0.1 percent between the two years. Additionally, while 44 percent of grantmakers expect to maintain or increase their giving levels in 2012, approximately 9 out of every ten foundations do not expect to make any changes in the number of program or geographic areas in which they work. The Center notes that across giving strategies, an overwhelming majority of funders expect to make no changes and that the proportion that state they will increase their giving is effectively wiped out by the proportion that state they anticipate decreasing their giving. And most importantly, a substantial proportion of funders expect to decrease their provision of multi-year support (roughly 20 percent).
Are domestic economic uncertainty and a volatile international debt crisis good enough reasons for foundations to effectively continue business as usual? Grantees are left hamstrung, unable to keep pace with inflation, laying off staff and depleting their reserves. It is time for our nation’s grantmakers to truly engage with their grantees. As Grantmakers for Effective Organizations recent survey of its members found, those foundations that actually listen to their grantees are more likely to provide them with the types of support that they need, i.e., core or general operating support and multi-year funding.
That two out of every five foundations expect to reduce their giving in 2012 is a cause for concern not just for grantees but for our sector as a whole because of the increased demand for services from grantees and the limitations on their ability to respond to these in light of shrinking budgets.
Does your foundation plan to increase or decrease its giving in 2012? Your grantees would certainly love to know from you.
Niki Jagpal is research and policy director at the National Committee for Responsive Philanthropy (NCRP).
Labels: Data Center, economic recession, Foundation Center, giving forecast 2012, Grantmakers for Effective Organizations, National Organizers Alliance
posted by National Committee for Responsive Philanthropy at
10:49 AM
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