Majority of Family Foundations Small, Young in Age, Study Finds

Nearly 70 percent of the family foundations in the United States have been created since 1990, and a significant number of them pay out more than 10 percent of their corpus, a survey by the National Center for Family Philanthropy and the Urban Institute finds.

Based on responses from three hundred and forty-one family foundations with assets of at least $2 million, the survey, Trends in Family Philanthropy (executive summary), found that one in five family foundations established in the 1990s and 2000s reported payout rates of more than 10 percent. In contrast, the survey found that 87 percent of the family foundations established before 1970 paid out between 5 percent and 6 percent of their corpus. The survey also found that while 10 percent of all family foundations surveyed planned to spend down their assets within a limited life span, 19 percent of those established between 2010 and 2014 indicated they plan to spend down, compared with only 3 percent of those created before 1970.

Funded by the William Penn, Nord Family, Stocker, Leighty, and Rasmuson foundations, the survey also found that two in three family foundations were focused on place-based giving, about half (55 percent) on issue-based giving, and one in three on both. However, only 40 percent of the foundations created since 2010 were focused on place-based grantmaking, compared with 80 percent of those created before 1970. In the areas of accountability and evaluation, about a quarter of the older foundations and half of the newer ones have established self-assessment procedures, while 48 percent of the older foundations and 56 percent of the newest foundations said they were exploring strategies for assessing the impact of their grantmaking.

NCFP senior fellow Alice Buhl told the Chronicle of Philanthropy that while it isn't clear whether more of the recently established foundations would become spend-down organizations, donors are more likely to direct all their assets to a particular cause if they believe it will have an impact. "In previous years, in some ways it was a mark of failure to spend down," said Buhl. "It was assumed the family couldn’t work together or that they were giving up. Now it can be seen as a strategic, conscious choice."

"Trends in Family Philanthropy." National Center for Family Philanthropy 11/02/2015. "New Family Foundations Are Less Focused on Regional Giving, Study Finds." Chronicle of Philanthropy 11/02/2015.