Family foundations in the United States are awarding fewer but larger grants, making more impact investments, focusing more of their grantmaking on issues, and working to improve the diversity and inclusiveness of their boards, a report from the National Center for Family Philanthropy finds.
Based on a survey of more than five hundred family foundations, Trends 2020 (92 pages, PDF) found that a larger share of respondents reported total grantmaking of at least $500,000 in the past year than did respondents to the 2015 survey (46 percent vs. 34 percent), while a smaller share said they had awarded fifty grants or more (21 percent in 2019 vs. 30 percent in 2015). Funded by Bank of America and released in conjunction with the National Forum on Family Philanthropy, the survey also found that more family foundations reported payout rates above the mandatory minimum requirement of 5 percent, especially among those established after 2010. Newer foundations also were more likely to be making program-related investments (63 percent of foundations established after 2010), mission-related investments (59 percent), and impact investments (47 percent), as well as loans and grants designed to guarantee loan funds (39 percent). The share of the overall sample that awarded mission-related and impact investments doubled to 27 percent, from 13 percent in 2015, while 29 percent of respondents said they planned to increase their payout rate and expand their mission and impact investing, up from 19 percent and 12 percent in 2015.
According to the report, 81 percent of the family foundations established before 1970 had a geographic focus, while 82 percent of those formed since 2010 reported being issue-focused, up from 61 percent in 2015. In terms of issue area, the top priorities among the oldest foundations were education, college access, and literacy (41 percent); community initiatives, services, and development, including arts and culture (28 percent); and religious organizations (24 percent). By contrast, the top priorities among the newest foundations were poverty, hunger, and homelessness (64 percent); economic opportunity and inclusion, jobs, and workforce development (41 percent), and education (23 percent). The share of foundations that said they planned to increase the racial/ethnic diversity of their boards jumped significantly, to 21 percent, from 4 percent in 2015.
In addition, the survey found that the newest foundations were more likely to say they planned to award more multiyear grants (51 percent, compared with 30 percent of the overall sample), increase their support for capacity-building initiatives (48 percent vs. 27 percent), increase their general operating/unrestricted grant support (37 percent vs. 17 percent), and apply a racial equity lens to their grantmaking (46 percent vs. 13 percent). Family foundations established after 2010 also were more likely to use diversity, equity, and inclusion (DEI) goals and strategies to guide their grantmaking than those established before 2010 (53 percent vs. 20 percent), have strategies in place for creating change in their priority issue areas (80 percent vs. 45 percent), and assess their impact (56 percent vs. 36 percent), DEI outcomes (34 percent vs. 13 percent), and the demographics of grantees (32 percent vs. 10 percent).
"The Trends 2020 findings provide insights into how family foundations are adapting to changing times, values, and priorities as they strive for increased impact," said NCFP founder and president Virginia Esposito. "The study shows the growing influence of family foundations on philanthropy and offers families important guidance to improve their governance and operating practices and increase their effectiveness."