Despite asset declines, foundations nearly matched previous year’s donations
FAIRFIELD, Conn., June 10, 2019 – Foundation Source, the nation’s largest provider of comprehensive support services for private foundations, today released its 2019 Annual Report on Private Foundations, a study of how 987 of the firm’s clients with assets of less than $50 million fared in 2018 vs. 2017. The report found that in 2018, despite declines to their asset balances, these foundations gave nearly as much as they did in 2017, collectively awarding almost $300 million in grants. Contributions from donors to their foundations were robust as well.
The full report can be downloaded here.
The overall asset balances of the foundations decreased 3.5% in 2018, compared to 13.2% growth in 2017. Most of this drop in value occurred in the fourth quarter of 2018 when, after three strong quarters, the Standard & Poor’s 500-stock index fell, ending 2018 down nearly 7% on the year.
Despite this decline, the foundations collectively awarded $298.7 million in grants, nearly matching their 2017 disbursements of $299.3 million. They also considerably exceeded the mandatory 5% distribution requirement: On average, they disbursed 7.3% of their assets for charitable purposes with the smallest foundations in the sample (those with assets of less than $1 million) distributing 14.2% of their total asset balances.
“The generosity demonstrated by these foundations is impressive,” says Page Snow, Foundation Source chief philanthropic officer. “Whether the year was attended by strong economic growth or not, they maintained consistent levels of giving, demonstrating their donors’ unshakable commitment to philanthropy.”
The stock market lost some of its 2017 momentum, prompting foundations to very slightly decrease their allocations to equities and increase their fixed income holdings. Donors did not rely solely on investment returns to fund their philanthropy. Instead, they contributed 73 cents to their foundations for every 76 cents disbursed as grants and charitable expenses.
“It’s encouraging to see donors funding their private foundations with infusions of fresh capital,” Snow added. “Whether the market growth in early 2019 indicates a positive direction for the rest of this year or not, we’re confident that these dedicated philanthropists will continue to significantly support the causes they champion.”
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About the Foundation Source Annual Report on Private Foundations
The 2019 Foundation Source Annual Report on Private Foundations uses data sourced from actual transactions of Foundation Source’s client foundations, thereby providing the timeliest and most accurate look at the activities of foundations with assets of less than $50 million. Because foundations of this size represent 98% of the approximately 83,000 private foundations in the U.S., the report offers a rare opportunity for foundation donors and their professional advisors to benchmark financial and grantmaking performance.
The findings in the report are based on Foundation Source’s analysis of the activities of 987 of its private non-operating foundation clients with assets of less than $50 million. Data are drawn from investment returns, asset balances, and transactions 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. (Foundation Source does not custody or manage assets.)
About Foundation Source (www.foundationsource.com)
Foundation Source is the nation’s largest provider of comprehensive support services for private foundations. Our complete outsourced solution includes foundation creation (as needed), administrative support, active compliance monitoring, philanthropic advisory, tax and legal expertise, and online foundation management tools.
Now in our second decade, Foundation Source provides its services to more than 1,500 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.