Giving by Foundations
Giving by foundations includes grants to U.S. charities made by all American foundations. Community, private (including family), and operating foundations are among the types included in this prediction.ix
Giving by foundations is predicted to increase by 7.0% in 2019 and by 6.1% in 2020.x
The projections for giving by foundations (grantmaking) in 2019 and 2020 are above the historical 10-year annualized average growth rate of 3.5% and the historical 40-year annualized average growth rate of 5.4%. The foundation giving projection for 2019 is above the 25-year annualized average of 6.1%, while the grantmaking projection for 2020 is level with the 25-year annualized average.33
Specific factors that will significantly and positively influence foundation giving in 2019 and 2020 include:xi
- Above-average growth in the S&P 500 in the preceding and projected years, and
- Growth in the preceding year’s GDP.34
These two factors will account for most of the predicted growth in giving by foundations in these years. Since foundations typically budget their giving based on asset growth, trends in the prior year’s S&P 500 impact giving in the current year. As such, above-average predicted growth in the S&P 500 in 2018 and 2019 will influence strong foundation giving in 2019 and 2020.
The majority of the projected increase in foundation giving for the years 2019 and 2020 will be influenced by growth in the prior years’ GDP. However, growth in giving positively influenced by rising GDP will be tempered by the projected rise in household and nonprofit net worth in the current and preceding years. This result may be due to foundations restraining giving during positive economic periods to save grant funding for economic downturns.35
- ix This prediction does not explicitly break out directional changes in growth for each foundation type.
- x All growth rates are based on predictions for giving in inflation-adjusted 2017 dollars using 2018 as the base year. The Philanthropy Outlook projects the growth rates of variables into 2019 and 2020; predicted growth rates are compared with the variables’ historical 10-, 25-, and 40-year annualized means. See Table 1 for these data.
- xi The Scenario Analysis section of this report describes how changes in some of these factors may affect foundation giving.