Report Examines Grantmaking Behavior of Private Foundations in 2016 and Compares to 2015
FAIRFIELD, CT –July 26, 2017–Foundation Source, the nation’s largest provider of comprehensive support services for private foundations, today released its 2017 Report on Grantmaking, which found that on average, grant sizes from client foundations grew by 3% in 2016 compared to 2015. Mid ($1-10M) and large ($10-50M) sized foundations also gave more numerous grants compared to the year before.
Additionally, the report suggests that foundation donors view the 5% minimum distribution requirement (MDR) as a floor rather than a ceiling. Foundations of all sizes exceeded the MDR, but on average, the smallest (<$1M) size foundations distributed the greatest percentage (13.2%) of their assets. Smaller foundations were also more likely than their larger peers to make general purpose grants as opposed to grants for a specific program.
The report is part of Foundation Source’s efforts to elucidate the behavior of foundations that, like the vast majority of their clients, hold assets of less than $50 million. Foundations of this size account for 98% of all private foundations in the U.S.
“Despite their modest size, these foundations remain an impressively dynamic segment of the philanthropic community,” says Foundation Source Chief Philanthropic Officer Page Snow. “They grant well above the federally mandated 5% minimum distribution requirement, supplying critical operational support to nonprofits as well as funding for their specific programs.”
The report also provides a detailed analysis of where foundations gave their grant dollars in 2016. The top categories were Education (15%), Human Services (9%), and Public, Societal, Benefit organizations (6%). With the exception of one category, Arts, Culture, and Humanities, the percentage of grant dollars increased across all categories year-over-year.
“Because these foundations are established by a single individual, family, or corporation, and are typically deeply rooted within their home communities, they can use their agility to their advantage, responding quickly to needs that might not be on the radar of larger funders,” says Ms. Snow. “For example, although granting to public charities remains the cornerstone of foundation giving, a significant number of our clients used the broad philanthropic capabilities of their private foundations to provide direct support to individuals, such as emergency or hardship grants, that put funds directly in the hands of people in need.”
The report details grant timing as well. While November (11%) and December (23%) unsurprisingly saw the largest percentages of grants, 2016 also experienced a mid-year funding bump, as 25% of grants were made between May and July.
The Grantmaking Report is made up of a sample of 883 foundations. 42% of the foundations in the sample had assets under $1M; 47% had assets between $1-10M; 11% had assets between $10-50M.
About Foundation Source (www.foundationsource.com)
Foundation Source is the nation’s largest provider of comprehensive support services for private foundations. The company’s administrative services, online foundation management tools, compliance, and philanthropic advisory services provide a complete outsourced solution, including the creation of new foundations. Our clients supply the vision; we provide everything else.
Now in our second decade, Foundation Source provides its services to more than 1,300 family, corporate, and professionally staffed foundations, of all sizes, nationwide. We work in partnership with wealth management firms, law firms, accounting firms, and family offices as well as directly with individuals and families. Foundation Source is headquartered in Fairfield, Connecticut.