The general public tends to know a lot about the activities of the big foundations–MacArthur, Gates, Ford–because most reporting focuses on the largest ones. But what about small to midsize private foundations?
On Tuesday, Foundation Source released preliminary findings on the grant-making behavior of 719 private foundations with assets of less than $50 million. It said small to midsize foundations represent 98% of the approximately 80,000 U.S. private foundations in existence, the vast majority of which are between $250,000 and $5 million.
The research was based on actual data, rather than on surveys or estimates, the organization said in a statement. Following are initial findings on these private foundations’ 2011 giving behavior:
- Small to midsize private foundations generally gave more than twice their 5% minimum distribution requirement, and the smallest foundations gave away significantly more.
- Private foundations with assets of less than $10 million increased their giving by 20.6% over 2010. At the same time, their counterparts in the $10 million to $50 million range reduced their giving by 7.8%.
- Giving priorities shifted in 2011, with foundations giving 40.6% more to arts and culture than in 2010, while reducing funding to education by 3.1% and to science and technology by 52.4%.
Foundation Source said these findings contradict the traditional perception that private foundations limit their giving to the 5% minimum distribution requirement dictated by the federal tax code. In fact, small and midsize foundations appear to be more philanthropic than their larger peers, distributing a larger percentage of their endowments each year.
“Small to midsize private foundations are the silent majority in the philanthropic sector,” H. King McGlaughon, chief executive of Foundation Source, said in the statement. “These donors are comfortable granting larger percentages of the corpus, because many are still financially productive and are pumping new assets into the foundation each year.”
Foundation Source said the new findings were a “first look” at its Private Foundation Index 2011, which is scheduled to come out later this year. The full study will provide information on small to midsize foundations’ investment management and grant-making activity.