Private foundations plan to increase grantmaking

Private foundations plan to increase grantmaking

In response to the COVID-19 pandemic and mounting social justice concerns, a majority of private foundations have increased or plan to increase their grantmaking in 2020, a report from Foundation Source finds.

Based on a survey conducted in August of more than a hundred of Foundation Source's private non-operating foundation clients, the report, 2020: The Year That Changed Everything — How Private Foundations Are Meeting this Moment (15 pages, PDF), found that 42 percent of respondents said they had already increased their grantmaking  significantly (13 percent) or modestly (29 percent) in 2020, while 48 percent said their level of grantmaking had stayed the same and 10 percent said it had declined. Looking to the rest of the year, 42 percent of respondents expected their grantmaking to increase significantly (7 percent) or modestly (35 percent), while 5 percent expected it to decline. Respondents who had increased their grantmaking cited as factors in their decision the impact of COVID-19 (79 percent), the impact of the pandemic on nonprofits (72 percent), social injustice concerns (28 percent), or increased payout obligations based on the value of their assets at the end of 2019 (21 percent). Grantmaking data for all Foundation Source clients for the second quarter of 2020 showed a 45 percent year-over-year increase in  total grant dollars awarded and a 2 percent increase in the number of grants issued.

According to the survey, while 75 percent of respondents had awarded grants exclusively to nonprofits in 2020, some respondents had employed other strategies, including awarding grants directly to individuals (7 percent), awarding scholarships (18 percent), and engaging in direct charitable activities such as distributing clothing to people in need without the aid of a nonprofit (6 percent), and program-related investments (2 percent).

The survey also found that 39 percent of respondents had modestly (37 percent) or significantly (2 percent) shifted their foundation's mission since the beginning of the year, citing the impact of COVID-19 (85 percent), increased need among nonprofits (52 percent), social justice concerns (32 percent), high unemployment rates (20 percent), or the struggling economy (17 percent).

"Given the extraordinary challenges of 2020 — COVID-19, high unemployment, social turmoil — the entire philanthropic community is under pressure to do more with finite resources," said Foundation Source CEO Susan Friedlander Calzone. "Private foundations have been meeting the challenges head-on; they've adapted their strategies and are doing new and amazing things with their philanthropy."