National Committee for Responsive Philanthropy. 2. Multi-year grants offer ..... org/2012/09/errors-in-philanthropic-lan
THE PHILANTHROPIC LANDSCAPE
The State of Multi-Year Funding By Niki Jagpal and Kevin Laskowski Multi-year funding¹ is essential for nonprofits’ effectiveness, impact and growth. During the last few years, grantmakers have reported significantly fewer grant dollars for multi-year support, and the outlook is uncertain for this vital way in which grantmakers can increase nonprofit effectiveness and capacity. NCRP examined available annual data on multi-year grants authorized from 2004 to 2010 to assess trends in multi-year grantmaking among more than 1,400 grantmakers and among a matched set of 391 funders. The analysis found that: • In 2009, reported multi-year grantmaking declined 21 percent to $5.5 billion from its $6.9 billion peak the previous year. Overall grantmaking declined 13 percent. If the nation’s largest grantmaker, the Bill and Melinda Gates Foundation, were excluded from our analysis, reported multi-year grantmaking would have decreased by more than a third. • Grantmakers have so far reported authorizing $4.7 billion in multi-year grants in 2010, an additional decline from 2009 and well below even 2006 levels of $5.3 billion.² • Foundations that report multi-year funding provide such grant dollars at consistently substantial, if not exemplary, levels. • However, each year, only one-tenth of sampled funders on average reported some multiyear grantmaking. Ninety percent of sampled foundations either do not provide multi-year grants or do not report them. Clearly, multi-year grants are difficult for nonprofits to find and secure, and these important grants are likely to remain scarce for the foreseeable future. Without intentional effort on the part of trustees and staff of grantmaking institutions to begin providing significant
multi-year funding, nonprofit sustainability and impact will continue to be stymied. The following analysis examines available annual data on multi-year grants authorized from 2004 to 2010. NCRP often uses three-year averages to consider a foundation’s overall commitment to a given practice, but, in this case, three-year averages of 2008-2010 would obscure foundation decisions during those years, prompting us to take a closer look at grantmaking on an annual basis.
AT A GLANCE3 $5.5B Total reported multi-year support in 2009 25% Share of grant dollars reported as multi-year support in 2009
4% Average foundation share of giving
classified as multi-year support in 2009
THE CASE FOR MULTI-YEAR FUNDING In 2009, NCRP’s Criteria for Philanthropy at Its Best encouraged grantmakers to invest in the health, growth and effectiveness of their nonprofit partners by providing at least 50 percent of grant dollars as multi-year grants.4 Unencumbered, flexible, long-term funding provides nonprofits with significant benefits such as: • The ability to respond to crises and opportunities. • Capacity building and leadership development potential. • The ability to maintain staff continuity and organizational leadership. • The organizational capacity to overcome unforeseeable challenges and improve planning.
National Committee for Responsive Philanthropy
Multi-year grants offer grantees a firm commitment of funding for more than one year. It is distinct from one-year “continuing support grants,” which may be
MULTI-YEAR GRANTMAKING FROM 2004-2010 Reported multi-year giving peaked in 2008 at $6.9 billion (9,250 grants) and now stands at $4.7 billion (7,835 grants). The Bill and Melinda Gates Foundation gave away as much as the next six largest foundations combined in 20096 and has a substantial commitment to multi-year giving. It accounted for nearly 6 percent of grants and nearly half (44 percent) of reported multi-year grant dollars from 2004-2010.
renewed by the same grantee but require a new application process each year. Continuing grants are important, but exemplary grantmakers provide multi-year grants.5
FIGURE 1. REPORTED MULTI-YEAR GRANT DOLLARS, 2004-2010 All Grantmakers
Gates Foundation
$8 billion
$6 billion
$4 billion
$2 billion
$0
The number of grants provided as multi-year support declined 17 percent in 2009. Reports of multiyear grants are up for 2010, but are still below 2006 levels. Because the 2010 dataset is still being finalized, it is possible that the number of multi-year grants might increase.
2004
2005
2006
2007
2008
2009
2010
FIGURE 2. REPORTED MULTI-YEAR GRANTS, 2004-2010 All Grantmakers
Gates Foundation
10,000
8,000
6,000
4,000
2,000
0
2004
2005
2006
2007
2008
2009
2010
The majority of the Gates Foundation’s grant dollars go to international causes. According to the foundation’s most recent annual report, Global Development and Global Health comprised $2.6 billion (82 percent of total grants paid) compared to $487 million (15 percent of total grants paid) for U.S. program areas.7 This suggests that the availability of multi-year grants for domestic U.S.-focused activities may be far less than it may appear. On average from 2004-2010, only one-tenth of all sampled funders reported some multi-year grantmaking; of those that did, an average of 41 percent of them reported giving at least half of their grant dollars as multi-year grants.
2
HOW MUCH MULTI-YEAR FUNDING DO GRANTMAKERS PROVIDE? Reported multi-year giving never comprised more than 28 percent of total grant dollars or 6 percent of grants authorized for the years analyzed.
FIGURE 3. PERCENTAGE OF GRANTS AND GRANT DOLLARS AS MULTI-YEAR FUNDING ACROSS ALL FOUNDATIONS Grants
Grant Dollars
80.0%
60.0%
40.0%
20.0%
0.0%
Among foundations that do report multi-year giving, though, it has comprised as much as three-quarters (75 percent) of total giving and 29 percent of grants authorized.8 Among those foundations that report multi-year giving, shares of multi-year grant dollars and grants peak in 2007, rather than in 2008 as in the broader sample. With multi-year funds already committed in an uncertain market, it is likely that these funders began authorizing fewer grants starting in late 2008.
The multi-year giving of this matched set of 391 funders follows the same path as the full sample, peaking in 2008, falling in 2009 to levels below those in 2006.
2005
2006
2007
2008
2009
2010
FIGURE 4. PERCENTAGE OF GRANTS AND GRANT DOLLARS FROM MULTI-YEAR GIVERS Grants
Grant Dollars
80.0%
60.0%
40.0%
20.0%
0.0%
A DIFFERENT LENS TO ANALYZE MULTI-YEAR GRANTMAKING Because the Foundation Center’s grants database samples different foundations every year, the Center compiled a matched set of 391 foundations that appeared in each annual sample from 2004-2010 to test whether or not the trends observed in the full sample held true among a consistent group.
2004
2004
2005
2006
2007
2008
2009
2010
FIGURE 5. REPORTED MULTI-YEAR GRANT DOLLARS, 20042010, MATCHED SET All Grantmakers
Gates Foundation
$8 billion
$6 billion
$4 billion
$2 billion
$0
2004
2005
2006
2007
2008
2009
2010
The Philanthropic Landscape: The State of Multi-Year Funding (Revised Edition)
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National Committee for Responsive Philanthropy
The Gates Foundation again comprises 6 percent of multi-year grants made and nearly half (45.2 percent) of the sampled multi-year grant dollars.
FIGURE 6. REPORTED MULTI-YEAR GRANTS, 2004-2010, MATCHED SET All Grantmakers
Gates Foundation
10,000
Confining the analysis to only known multi-year givers, the shares of total giving and the average percentage given as multi-year grants is consistently higher compared to the field as a whole. While the share of grant dollars given is consistently high among these funders, the share of grants given as multi-year grants is considerably less.
8,000
6,000
4,000
2,000
0
In the matched set of 391 grantmakers, 20 percent of funders reported some multi-year grantmaking; of those that did, two-thirds of them on average reported giving at least half of their grant dollars as multi-year grants. Again, among multi-year funders, shares of grant dollars and grants made as multi-year grants peaked in 2007. These findings suggest that, among those who give multi-year grants, such giving is consistently substantial.
2004
2005
2006
2007
2008
2009
2010
FIGURE 7. SHARES PERCENTAGE OF GRANTS AND GRANT DOLLARS FROM MULTI-YEAR GIVERS 2004-2010, MATCHED SET Grants
Grant Dollars
80.0%
60.0%
40.0%
20.0%
0.0%
2004
2005
2006
2007
2008
2009
2010
LARGEST MULTI-YEAR FUNDERS In 2009, 51 grantmakers (4 percent of the 2009 overall sample) reported authorizing at least 50 percent of their grant dollars as multi-year grants, the level encouraged by NCRP. TABLE 1. LARGEST FUNDERS BY SHARE OF TOTAL GIVING FOR MULTI-YEAR GRANTS IN 2009 MULTI-YEAR SUPPORT FOUNDATION NAME
4
TYPE¹
STATE
AMOUNT
PERCENTAGE
William T. Grant Foundation
IN
NY
$13,268,527
99.8%
James S. McDonnell Foundation
IN
MO
$13,647,685
97.2%
Richard M. Fairbanks Foundation, Inc.
IN
IN
$30,660,000
96.4%
Bill & Melinda Gates Foundation
FM
WA
$2,895,910,000
96.1%
The Andrew W. Mellon Foundation
IN
NY
$188,164,400
94.6%
Bush Foundation
IN
MN
$43,230,451
94.1%
Lavelle Fund for the Blind, Inc.
IN
NY
$3,587,228
94.1%
Doris Duke Charitable Foundation
IN
NY
$73,084,026
94.0%
TABLE 1. LARGEST FUNDERS BY SHARE OF TOTAL GIVING FOR MULTI-YEAR GRANTS IN 2009 (CONTINUED) MULTI-YEAR SUPPORT FOUNDATION NAME
TYPE¹
STATE
AMOUNT
PERCENTAGE
The California Wellness Foundation
IN
CA
$44,260,000
93.5%
William Talbott Hillman Foundation
IN
PA
$1,010,000
93.5%
The Educational Foundation of America
FM
CT
$9,384,667
92.7%
Burroughs Wellcome Fund
IN
NC
$20,932,350
89.9%
The James Irvine Foundation
IN
CA
$55,766,000
88.4%
Lumina Foundation for Education, Inc.
IN
IN
$49,465,300
87.6%
Kate B. Reynolds Charitable Trust
IN
NC
$20,376,219
85.9%
Alfred P. Sloan Foundation
IN
NY
$46,393,907
85.8%
The Wallace Foundation
IN
NY
$25,565,000
85.6%
The McKnight Foundation
FM
MN
$38,084,500
85.3%
Foundation for Child Development
IN
NY
$1,080,097
83.4%
W.K. Kellogg Foundation
IN
MI
$182,692,199
83.4%
Carnegie Corporation of New York
IN
NY
$89,037,020
81.6%
Kansas Health Foundation
IN
KS
$11,368,184
80.2%
The John D. and Catherine T. MacArthur Foundation
IN
IL
$159,732,500
80.0%
Harold Simmons Foundation
CS
TX
$6,170,000
80.0%
W. M. Keck Foundation
FM
CA
$16,850,000
79.9%
¹ CS=corporate, FM=family, IN=independent
TABLE 2. THE 25 LARGEST MULTI-YEAR FUNDERS BY TOTAL GIVING IN 2009 MULTI-YEAR SUPPORT FOUNDATION NAME
TYPE¹
STATE
AMOUNT
PERCENTAGE
Bill & Melinda Gates Foundation
FM
WA
$2,895,910,000
96.1%
Ford Foundation
IN
NY
$311,737,814
69.5%
The Robert Wood Johnson Foundation
IN
NJ
$192,571,877
65.5%
The Andrew W. Mellon Foundation
IN
NY
$188,164,400
94.6%
W. K. Kellogg Foundation
IN
MI
$182,692,199
83.4%
The William and Flora Hewlett Foundation
IN
CA
$165,166,600
73.2%
The John D. and Catherine T. MacArthur Foundation
IN
IL
$159,732,500
80.0%
The Kresge Foundation
IN
MI
$122,954,629
66.0%
The David and Lucile Packard Foundation
FM
CA
$89,583,593
34.2%
Carnegie Corporation of New York
IN
NY
$89,037,020
81.6%
The Rockefeller Foundation
IN
NY
$88,375,330
67.6%
Doris Duke Charitable Trust
IN
NY
$73,084,026
94.0%
The Philanthropic Landscape: The State of Multi-Year Funding (Revised Edition)
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National Committee for Responsive Philanthropy
TABLE 2. THE 25 LARGEST MULTI-YEAR FUNDERS BY TOTAL GIVING IN 2009 (CONTINUED) MULTI-YEAR SUPPORT FOUNDATION NAME
TYPE¹
STATE
AMOUNT
PERCENTAGE
Charles Stewart Mott Foundation
IN
MI
$62,504,510
62.4%
The James Irvine Foundation
IN
CA
$55,766,000
88.4%
Lumina Foundation for Education, Inc.
IN
IN
$49,465,300
87.6%
Alfred P. Sloan Foundation
IN
NY
$46,393,907
85.8%
John S. and James L. Knight Foundation
IN
FL
$45,780,547
75.8%
The California Wellness Foundation
IN
CA
$44,260,000
93.5%
Bush Foundation
IN
MN
$43,230,451
94.1%
The McKnight Foundation
FM
MN
$38,084,500
85.3%
The William Penn Foundation
FM
PA
$33,808,116
71.8%
Richard M. Fairbanks Foundation, Inc.
IN
IN
$30,660,000
96.4%
The Wallace Foundation
IN
NY
$25,565,000
85.6%
Meyer Memorial Trust
IN
OR
$22,118,870
77.4%
Burroughs Wellcome Fund
IN
NC
$20,932,350
89.9%
¹ FM=family, IN=independent
METHODOLOGY NCRP worked with the Foundation Center to develop custom datasets using the center’s grants sample database, which includes detailed information on all
grants of $10,000 or more awarded to organizations by more than 1,300 of the largest foundations in the United States. Grants to individuals are not included
TABLE 3. OVERVIEW OF DATA SET
MATCHED SAMPLE
OVERALL SAMPLE
YEAR AUTHORIZED
6
2004
2005
2006
2007
2008
2009
20109
1,124
1,218
1,399
1,401
1,437
1,312
1,091
Foundations Reporting Multi-Year Commitments (Number)
109
104
122
121
150
141
136
Foundations Reporting Multi-Year Commitments (Percent)
10%
9%
9%
9%
10%
11%
13%
Reported Median Share of Grant Dollars for Multi-Year Giving
0%
0%
0%
0%
0%
0%
0%
Foundations in Set
391
391
391
391
391
391
391
Foundations Reporting Multi-Year Commitments (Number)
76
71
73
71
87
89
80
Foundations Reporting Multi-Year Commitments (Percent)
19%
18%
19%
18%
22%
23%
20%
0%
0%
0%
0%
0%
0%
0%
Foundations in Set
Reported Median Share of Grant Dollars for Multi-Year Giving
in the file. International grants are included. For community foundations, discretionary grants and donor-advised funds are included. The Center’s grants classification system provides much more detail on current giving trends than other data sources and represents approximately half of the foundation grantmaking in the United States.
to Steven Lawrence, Director of Research at the Foundation Center, for his review and guidance. NOTES 1. Statistics in a previous version of this report misstated levels of multi-year grantmaking because of a programming error at the Foundation Center. The mistake prompted a different approach that corrects the rec-ord and more accurately
NCRP examined available annual data on multi-year grants authorized from 2004 to 2010 to observe trends in multi-year grantmaking among more than 1,400 grantmakers and among a matched set of 391 funders.
reflects recent trends in multi-year giving. See Niki Jagpal and Kevin Laskowski, “Errors in “The Philanthropic Landscape,” Keeping a Close Eye…, September 7, 2012, http://blog.ncrp. org/2012/09/errors-in-philanthropic-landscape.html. 2. Figures presented for 2010 are based on data available at the
Figures for multi-year giving are captured only for foundations that provided full authorized grant amounts and grant durations either publicly or directly to the Foundation Center. Foundations noted in the data as giving zero to multi-year support either did not give such grants or did not provide enough information to code them as such. NCRP encourages grantmakers to contact the Foundation Center to ensure appropriate classification of their grants.
time of this analysis. Because of differences in foundation fiscal years and the timing of 990 filings, the Foundation Center is continuing to collect and process data for grants authorized in 2010. The percentage of known multi-year funders appears higher in 2010 because most of the larger multi-year funders are included in the sample. Once the full set is complete, the shares of known multi-year funders will likely decrease. 3. Figures from 2009 represent the latest complete dataset. 4. Niki Jagpal, Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact (Washington, D.C.:
For more information, please contact research@ ncrp.org.
National Committee for Responsive Philanthropy, 2009). 5. Ibid. 6. The Foundation Center, “50 Largest Foundations by Total Giving, 2009,” (New York, N.Y.: The Foundation Center,
Niki Jagpal is research and policy director at the National Committee for Responsive Philanthropy.
2011), http://foundationcenter.org/findfunders/statistics/ pdf/11_topfdn_type/2009/top50_tg_all_09.pdf. 7. The Bill and Melinda Gates Foundation, Building Better Lives
Kevin Laskowski is research and policy associate at the National Committee for Responsive Philanthropy.
Together: 2011 Annual Report (2012), http://www.gatesfoundation.org/annualreport/2011/Pages/home-en.aspx. 8. See note 2.
The authors would like to extend a special thanks
9. See note 2.
ABOUT NCRP The National Committee for Responsive Philanthropy (NCRP) aims to ensure that philanthropy contributes in meaningful ways to the creation of a fair, just and equitable world. We promote philanthropy that serves the public good, is responsive to people and communities with the least wealth and opportunity, and is held accountable to the highest standards of integrity and openness. For more information, please contact us at: 1331 H Street NW, Suite 200, Washington, D.C. 20005 P: 202.387.9177 | F: 202.332.5084 | E-mail:
[email protected] www.ncrp.org | blog.ncrp.org
The Philanthropic Landscape: The State of Multi-Year Funding (Revised Edition)
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