Foundation Source Report Reveals 2017 a Banner Year for Private Foundations

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Foundation Source, the nation’s largest provider of comprehensive support services for private foundations, today released its 2018 Annual Report on Private Foundations, a study of how 927 of the firm’s clients with assets of less than $50 million fared in 2017 vs. 2016. The report found that in the aggregate, these private foundations earned more, gave more, and received more contributions from their donors in 2017 than they did during the prior year.

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Net Change Asset Values (All Foundations). (Graphic: Business Wire)

Net Change Asset Values (All Foundations). (Graphic: Business Wire)

Even after accounting outflows of grants and expenses, the overall asset balances of the foundations saw double-digit growth: 13.2% in 2017 compared to 6.6% in 2016. In the aggregate, assets held by the 927 foundations increased from $4 billion at the end of 2016 to $4.5 billion by the end of 2017.

Although the stock market was robust in 2017, donors did not rely solely on investment returns to fund their philanthropy. Instead, they supplemented their earnings with strong contributions, contributing 83 cents to their foundations for every 89 cents they disbursed as grants and charitable expenses.

“The high rate of contributions is a good indication of donor commitment to and enthusiasm for their private foundations,” Page Snow, Foundation Source Chief Philanthropic Officer, said. “Rather than relying on investment returns, donors are providing infusions of fresh capital to fund their charitable interests.”

The report also found that in 2017, the sample of foundations collectively gave $285 million in charitable contributions compared to $266 million in 2016. Moreover, these foundations exceeded the mandatory 5% distribution requirement: On average, they distributed 8.2% of their assets for charitable purposes with the smallest foundations in the sample (those with assets of less than $1 million) giving in excess of 13%.

“At this point, it’s unclear whether strong 2017 earnings will be predictive of a grantmaking spike in 2018,” Ms. Snow said. As the annual minimum distribution requirement for private foundations is based on calculating the net assets of the previous year, the gains of 2017 could translate into increased charitable support in 2018. “We’ve been conducting these studies for a decade, and consistently, we see clear evidence that these foundations punch above their weight, even in unfavorable economic climates. If current economic trends continue, it could bode well for 2018 charitable distributions.”

About the Foundation Source Annual Report

The 2018 Foundation Source Annual Report on Private Foundations uses data sourced from actual transactions of Foundation Source’s client foundations, thereby providing the timeliest and most accurate look at the activities of foundations with assets of less than $50 million. Because foundations of this size represent 98% of the approximately 83,000 private foundations in the U.S., the report offers a rare opportunity for foundation donors and their professional advisors to benchmark financial and grantmaking performance.

The full report can be downloaded here (https://www.foundationsource.com/resources/library/2018-foundation-source-report-on-private-foundations/).

Report Methodology

The findings in the report are based on Foundation Source’s analysis of the activities of 927 its private non-operating foundation clients with assets of less than $50 million. Data are drawn from actual investment returns, asset balances, and transactions recorded by Foundation Source as it paid grants and expenses, filed tax returns on behalf of its clients, and recorded investment information provided by each foundation’s financial institution. (Foundation Source does not custody or manage assets).

About Foundation Source (www.foundationsource.com)

Foundation Source is the nation’s largest provider of comprehensive support services for private foundations. Our complete outsourced solution includes foundation creation (as needed), administrative support, active compliance monitoring, philanthropic advisory, tax and legal expertise, and online foundation management tools.

Now in our second decade, Foundation Source provides its services to more than 1,400 family, corporate, and professionally staffed foundations, of all sizes, nationwide. We work in partnership with wealth management firms, law firms, accounting firms, and family offices as well as directly with individuals and families. Foundation Source is headquartered in Fairfield, Connecticut.

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Business Wire: 16:00 GMT Wednesday 11th July 2018

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