New research funded by UBS shows that three-quarters of the world’s private foundations were established in the last 25 years, but their resources are highly concentrated in certain sectors and coordination between foundations is limited.
The Global Philanthropy Report, conducted by researchers at Harvard Kennedy School’s Hauser Institute for Civil Society, said several forces were driving the sector’s rapid expansion: global economic growth and the enormous increase in private wealth accumulation; persistent economic and social inequalities; and governmental and private efforts to encourage and support philanthropic institutions and giving.
The study identified 260,358 foundations in 38 countries and Hong Kong, which it said represented only a partial picture of the sector. These foundations were highly concentrated, with 90% located in the 25 highest-income countries as classified by the World Bank:
- Europe (23 countries): 154,271
- North America: 91,850 (U.S.: 86,203; Canada: 5,647)
- Asia (three countries and Hong Kong): 13,170
- Latin America (six countries): 859
- Middle East (two countries): 161
- Africa (two countries): 47
Combined assets of the foundations in the study approached an estimated $1.5 trillion, but nine in 10 had assets less than $10 million. Half had no paid staff and budgets of less than $1 million.
Identified foundations’ assets were also highly concentrated, with 60% in U.S. institutions and 37% in European ones.
Around the globe, education was the foundations’ number one philanthropic priority. Health, human services, social welfare and, to a lesser extent, arts and culture were also top priorities for many philanthropic institutions.
In North America, education was the main priority for 93.6% of foundations, followed by health, 88.3%; human services/social welfare, 87.4%; arts and culture, 80.9%; and philanthropy and nonprofit, 71.4%.
The study found that philanthropic organizations were using a variety of social investment strategies to maximize their impact. In the U.S., foundations are nearly synonymous with grant-making organizations.
In other countries, most foundations use their philanthropic capital to operate in-house programs, something only 3% of American foundations do.