Foundation Giving in 2003 Likely to Drop, Report Says

In reaction to three years of stock-market declines, the amount of grant dollars awarded by American

foundations dropped slightly last year, declining to an estimated $30.3-billion in 2002 from $30.5-billion in 2001, according to a new report from the Foundation Center, in New York.

This 0.7 percent decrease marks the first decline in giving reported since the center’s 1983 survey of grant makers, the report says. Giving is likely to continue to decline this year due to the estimated 10-percent to 12-percent drop in foundation assets in 2002, the report predicts. What’s more, it says that increases in grant making in subsequent years are unlikely unless the stock market and economy improve.

Still, the report shows that foundation giving has nearly doubled since 1997, up from $16-billion, not adjusted for inflation. And the majority of the 747 grant makers that the Foundation Center surveyed about their 2003 plans said they expected their giving to increase or remain the same in 2003, the Foundation Center reports — which could indicate that this year’s overall decline in grant dollars awarded will be less than the new report anticipates.

The Foundation Center report offers estimates in giving for the year 2002, based on surveys from 762 private, community, and corporate foundations, which accounted for more than a third of giving in 2002. It is a follow-up to preliminary estimates released by the Foundation Center in April (The Chronicle, April 17).

The report also details trends in grant making based on figures from 2001, the last year in which complete information is available. The 2001 figures are not adjusted for inflation and are based on data from nearly 62,000 foundations.

The South showed the fastest growth in giving in 2000-1, according to the report. While the overall increase in giving was 10.7 percent from 2000 to 2001, Southern grant makers surpassed the national average by increasing their rate of giving by 13.1 percent. For the third consecutive year, the West showed the fastest rate of growth in the number of active grant makers, followed by the South. The South reported the largest number of new foundations in 2000-1, with 1,515 new active grant makers,.

Among the Foundation Center’s other findings:

• Assets of the 25 largest foundations decreased by 10 percent in 2000-1. The Ford Foundation, with a drop of 26.3 percent, and the David and Lucile Packard Foundation, with a drop of 36.7 percent, reported the biggest percentage loss in assets.
• The number of grant-making foundations increased by 5,228, the second largest increase the Foundation Center has recorded.
• Foundations in five states — California, New York, Pennsylvania, Texas, and Washington — accounted for nearly half of all giving in 2001.

“The Foundation Yearbook: Facts and Figures on Private and Community Foundations” is part of a series of reports published by the Foundation Center, called the “Foundation Today Series.” To order by credit card, contact the Foundation Center at (800) 424-9836 or, in New York City, call (212) 807-3690; fax (212) 807-3691; http://www.fdncenter.org or send mail orders to the center, Dept. N011, 79 Fifth Avenue, New York, N.Y. 10003-3076. Prepayment of $95 is required.