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Financial Planning > Charitable Giving

Foundations’ Generosity Rose in 2021 With More Focused Impact

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What You Need to Know

  • Foundations with assets between $1 million and $500 million collectively gave $40 million more in 2021 than in 2020.
  • At the same time, they gave 500 fewer grants in 2021 than in the previous year, suggesting a more targeted impact.
  • Foundations of all sizes granted more than 5% in 2021, with the smallest ones giving 8.9%.

Private and family foundations with assets between $1 million and $500 million collectively gave $689 million in 2021, $40 million more than the year before, according to a report released recently by Foundation Source, a provider of foundation management services.

The increase was more pronounced among foundations with $50 million to $500 million in assets where giving went up by nearly 21%.

At the same time, foundations gave 500 fewer grants in 2021, suggesting a move from urgently helping as many recipients as possible in 2020 to having more targeted impact in 2021, Foundation Source said.

“While some of our data indicates a return to pre-pandemic behaviors, the spike in giving over the last year could be a signal that the shocks of 2020 have had a lasting impact and set dedicated philanthropists on a new trajectory to address needs in a less reactive but increasingly generous way,” Sunil Garga, president and chief executive of Foundation Source, said in a statement.

The report’s findings are based on an analysis of the activities of a sample of 948 private, non-operating foundation clients, with data drawn from transactions, returns and balances recorded by Foundation Source as it paid grants and expenses on behalf of its clients, prepared their tax returns and recorded investment information provided by each foundation’s financial institution(s).

Among the key findings from the report:

Private foundation endowments experienced double-digit growth in both 2020 and 2021, consistent with strong market performance and contribution rates, helping to set the stage for future giving. In 2021, endowments increased $1.7 billion year-over-year.

Foundations of all sizes granted more than their annual mandatory distribution requirement of 5% in 2021. The smallest foundations in the study gave 8.9%.

Grants to individuals, which foundations made robust use of in 2020 to directly send emergency aid to people in need, decreased by 64% in 2021. Foundations also reduced the number of general-purpose grants in 2021 by 3% after issuing a record number of them in 2020 to give recipients latitude to direct funds where they were needed most.

In 2021, grants that support human services and public/societal benefit organizations decreased after spiking in 2020, while ones that support education, the arts and the environment increased modestly, indicating that foundations are gradually returning to their core missions.

All foundations enjoyed growth in 2021, but smaller ones realized the biggest gain in assets, adding 15.6% in net value. They also had a considerably higher rate of contributions, 9.9%, which compared with 5.1% and 5.7% for their mid-size and larger counterparts.

Small and large foundations manage their assets very differently, according to the report. In their investment portfolios, smaller foundations had the largest allocation to equities and cash holdings, and the lowest allocations to alternative assets, in both 2020 and 2021.

Larger foundations devoted more than 20% of their portfolios to alternatives in both years, nearly five times the exposure maintained by smaller foundations.


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