May 28, 2013

Foundation Trends on Giving Beam a Ray of Hope to Marginalized Groups

Study records big jump in general operating grants

Nonprofit organizations and communities in need are benefiting from philanthropic giving trends, but whether these trends will persist is an open question.

Last week, the National Committee for Responsive Philanthropy released four new studies involving 1,121 foundations in its Philanthropic Landscape series on key foundation giving trends.

One study showed that the biggest U.S. foundations gave $10 billion in grants to benefit underserved communities.

The share of foundation grant dollars given to benefit the poor, the elderly, women and other marginalized groups increased to 42%, up from the 40% average in 2008–2010.

However, a second report noted that foundation funding aimed at social justice—engaging disenfranchised groups in addressing their problems—declined to 12% of total grant dollars in 2011. Foundations gave $2.9 billion for that purpose.

The share of grant dollars reported as core support leapt from 16% in 2008–2010 to 24% in 2011. NCRP said in a statement that this was the first time it had documented such a large increase in the proportion of grant dollars classified as general operating support.

Another report in the series showed that about 90% of foundations did not report any multiyear funding; this was consistent with earlier analyses of such giving.

“There are some hopeful signs that more foundations are giving in ways that benefit those that need philanthropic support the most,” Aaron Dorfman, NCRP’s executive director, said in the statement.

“But only time will tell if the trend holds in the next several years.”

Other findings from the studies included the following:

  • Foundations in the South were less likely to report giving to benefit underserved communities, but one in five funders nationally provided at least 50% of grant dollars in this way.
  • Although the share of reported grant dollars serving a social justice purpose declined in 2011, among those grant makers that did provide such funding the median rose from 4% to 7%.
  • Family foundations, Southern foundations and funders giving between $5 million and $10 million were likelier to provide general operating support. Eleven percent of the current sample reported providing 100% of their grant dollars as core support.
  • Among those foundations that did report providing multiyear funding commitments, such giving was consistent and at high levels. However, only 5% of the sample reported at least 50% of grant dollars as funding beyond one year.

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