FAIRFIELD, Conn., July 28, 2021 /PRNewswire/ -- Foundation Source, the nation's largest provider of management solutions for private foundations, today released its 2021 Report on Private Foundations – Grantmaking, a quantitative analysis of how more than 1,000 private foundations deployed charitable capital in 2020. The report reveals increased giving and significant changes in how the foundations, most of which are led by HNW, multigenerational families, gave in response to a time of tremendous struggle around the world, including COVID-19, social unrest and environmental disasters.
"In a year of extreme hardship, foundations answered the call and met urgent needs head-on," said Sunil Garga, President and CEO of Foundation Source. "We're inspired not only by their increased generosity but also their willingness to swiftly modify their usual grantmaking to meet society's most pressing needs. The philanthropic flexibility offered by foundations was invaluable during this difficult time."
Foundations focused on delivering charitable aid when it was needed the most, with the year-over-year grant volume in April nearly doubling from 5.6 to 9.7 percent of total activity in response to the COVID-19 national emergency declaration in March.
Other Key Findings from the report include:
The foundations in the study collectively funded approximately 1,000 more grants and dispersed $15 million more in 2020 than in 2019, an average of $339,032 per foundation.
Smaller foundations, defined in the study as those with less than $1 million in assets, were some of the biggest heroes; they gave nearly three times the 5 percent of assets they were required to disburse.
More general purpose (vs. special purpose) grants were given, which enabled recipients to distribute funding more efficiently to the needs they determined were most critical.
Giving to human services and public/societal benefit charities increased in response to COVID-19, environmental disasters and social unrest. (View an infographic of contributions by charitable sector here.)
The full Foundation Source report may be viewed here. An infographic of key findings is available here.
A Growing Emphasis on Sharing Wealth Foundations' uptick in giving and responsiveness in 2020 is part of a larger trend in which HNW families are viewing philanthropy as an increasingly vital component of their values, identities, and overall financial plan.
"In more than 20 years of work with high-net-worth families, we have found that philanthropy continues to play a critical role in how family wealth is sustained and deployed over multiple generations," said Hannah Shaw Grove, Chief Marketing Officer of Foundation Source. "More recently we have begun to see a growing emphasis across the affluent community on sharing wealth, not just amassing it, as a means of expressing personal values and effecting change."
Foundation Source expects the robust foundation activity seen in 2020 to continue in 2021 and beyond.
"The infusion of donor capital and solid portfolio performance that were evident in 2020 have helped set the stage for robust grantmaking and strong philanthropic activity going forward, which can have enormous positive impact in conjunction with an expanding recovery," Garga said.
For a video featuring executive commentary by Mr. Garga, visit here.
Foundation Source's 2021 Report on Private Foundations – Grantmaking provides a year-over-year quantitative analysis of grantmaking activities for a sample of 1,157 private non-operating foundation clients. Data was 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(s). Each foundation in the sample was active in 2019 and 2020 and, at the time of the study, had been in existence for at least three years and had endowment assets of $50 million or less. Because foundations of this size represent 98% of all foundations in the United States, the findings offer a rare opportunity for private philanthropists and their closest advisors to benchmark their foundations' grantmaking performance against a universe of their peers.
For more information regarding foundations' early response to 2020's hardships, review Foundation Source's August 2020 client survey here.
About Foundation Source (www.foundationsource.com) Foundation Source is the nation's largest provider of management solutions for private foundations. We empower people and companies to create a better world with their philanthropy through a configurable suite of administrative, compliance, and advisory services complemented by purpose-built foundation management technology and private foundation experts.
We work in concert with financial advisors, legal and accounting professionals, consultants and family offices, as well as directly with individuals, families and corporations to bring philanthropic visions to life. As we celebrate our 20th year of service, Foundation Source supports nearly 2,000 family, corporate and professionally staffed foundations and has enabled more than $7 billion in charitable grants.