Foundations Saw Double-Digit Growth in 2017, Report Finds

Foundations Saw Double-Digit Growth in 2017, Report Finds

Foundations that are clients of Foundation Source, a national provider of comprehensive support services for private foundations, saw strong earnings, grantmaking, and contributions in 2017, according to a new report from the organization.

According to the 2018 Foundation Source Annual Report (21 pages, PDF), asset balances at the firm's foundation clients nearly doubled on a year-over-year basis, from 6.6 percent in 2016 to 13.2 percent, due in part to robust stock market returns, while total contributions increased 8.3 percent, with donors giving 83 cents to their foundations for every 89 cents disbursed as grants or charitable expenses.

Foundations with assets of less than $1 million saw the greatest growth in grantmaking, up some 11.4 percent, followed by midsize foundations with assets of between $1 million and $10 million, up 7.1 percent, and large foundations with assets of between $10 million and $50 million, up 6 percent. And while the average grant size across all foundations in the sample increased from $12,000 to $13,000, most of the increase was attributable to a slight increase in the size of grants awarded by the largest foundations. In addition, the average distribution ratio — the amount of charitable contributions relative to the value of a foundation's assets — rose slightly for all foundations, to 8.2 percent from 7.8 percent in 2016, as well as for midsize and large foundations, while falling slightly for small foundations, from 14.2 percent to 13.4 percent.

In terms of issue areas, the percentage of grant dollars allocated to various charitable sectors remained fairly stable on a year-over-year basis, with education (30.1 percent) and human services (15.3 percent) topping the list.

"The high rate of contributions is a good indication of donor commitment to and enthusiasm for their private foundations," said Page Snow, chief philanthropic officer at Foundation Source. "Rather than relying on investment returns, donors are providing infusions of fresh capital to fund their charitable interests."