Foundation Funding Trends and Areas of Interest

Trends in large foundation giving are looking optimistic based on research from the National Committee on Responsive Philanthropy (NCRP), particularly in support for core operations and funding for programs aimed at underserved communities. The NCRP’s recently released Philanthropic Landscape 2011 series gives grantmakers and grantees alike a picture of whom is giving what where, and in which areas of interest.

According to the brief, The State of Giving to Underserved Communities 2011, by Niki Jagpal and Kevin Laskowski, foundations reported over $10 billion in grants for the elderly, women and girls, economically disadvantaged communities and ethnic or racial minorities in 2011. Key takeaways:

  • The percentage of foundation funding reported to benefit underserved groups or areas increased to 42 percent in 2011 from 40 percent during 2008 – 2010.
  • In 2011, one in five grantmakers (22 percent) was giving 50 percent or more of grant dollars to benefit underserved communities.
  • Foundations in the western United States were more likely to fund underserved communities/marginalized groups (60 percent, although without the Bill and Melinda Gates Foundation it drops to 30 percent), followed by the Northeast 35 percent, the Midwest 34 percent and the South 25 percent.
  • Not including the Bill and Melinda Gates Foundation, Independent foundations, Corporate foundations and Operating foundations were more likely to give to underserved communities or groups in 2011.

Philanthropic Landscape 2011 includes reports on trends in general operating and multi-year funding – all available at the NCRP website.


Study Indicates Slowdown in Social Justice Philanthropy

A new report on grantmaking and the recession, The Impact of the 2008 Financial Crisis on the Field of Social Justice Philanthropy, by Sara K. Gould, an Atlantic Philanthropies Senior Fellow at the Foundation Center, warns of increasingly difficulty in securing funding for social justice causes and organizations.

The researchers examined giving data from foundations across the United States with histories of philanthropy in the area of social justice; the sample represented over $760 million in giving, or 25 percent of all social justice philanthropy in 2009.  Highlights of the study include:

  • The majority of foundations  responded that they faced the economic downtown with plans to maintain their levels of grantmaking, even in the face of shrinking assets. Still, in 2009, grantmaking decreased to below 2007 levels, with small foundations experiencing the largest drop.
  • Foundations with less than $50 million in assets have been the most seriously depleted by the downturn and will continue to struggle for the next few years. Nonprofits that may rely heavily on these smaller, local funders for support may be greatly affected by this development.
  • Barring high performance in investment returns, social justice grants and funding will likely not return to 2008 levels before (or by) 2015.

This report is full of valuable information on social justice giving trends and the strategic maneuverings of foundations as the recession hit, and  is available for download at the Foundation Center website.

What Do We Really Know About Rural Nonprofits?

According to Census 2010 data, over a ¼ of the population of Pennsylvania (27 percent) is located in rural areas, and a considerable amount of our region of western Pennsylvania is considered rural.  Yet in my admittedly anecdotal experience, it seems that much of the mainstream discussion in the sector focuses on urban organizations. The challenging issues faced by rural nonprofits, accessibility (a dispersed population), transportation (rarely any of a public sort),  technology (reliable connections and coverage) and needs specific to non-metropolitan areas may be a bit of a mystery (hopefully not an afterthought) to the thinkers and influencers in the nonprofit and philanthropic sectors.

A report from The Bridgespan Group, Small but Tough: Nonprofits in Rural America by Alex Neuhoff and Andrew Dunckleman, turns the lens on rural nonprofits in the United States to examine what these organizations look like, identify their most pressing challenges and determine how they differ from their urban peers.  Some highlights of the study:

  • Rural nonprofits are funded at a lower rate per capita than their urban counterparts. Rural areas make up 18 percent of the total population of the United States, have a higher rate of poverty overall (22 percent of the country’s poor reside in rural areas) but represent 8 percent of the total spending in the nonprofit sector (including human services).
  • In spite of the above, overall, rural nonprofits appear to be in a better fiscal state than urban nonprofits and are less likely to run an operating deficit.
  • Data suggest that rural nonprofits have learned to be both nimble and aggressive,  prioritizing and pursuing strategies perhaps different from those of urban nonprofits used to the close proximity of both clients and funders.  The authors point out that rural organizations collaborated, merged and otherwise partnered with each other or a larger network, had strategic approaches to grants (private and public) and emphasized relationship-building  outside of their communities.

The study (available for download at The Bridgespan Group website) provides an excellent initial picture of rural nonprofits, including a comparative case study of similar programs operating in two very different locations.  I hope this type of organizational research continues, as there may be much to learn from the nonprofits operating 60 miles outside of Pittsburgh, but seemingly a world away.