Foundation grants keep up despite stock drop
Private foundations largely maintained the pace of donations in 2018, despite a year-end swoon in the stock markets that chipped a significant hole in their asset bases prior to this year’s recovery, according to an annual study released this week by Foundation Source, a Fairfield firm that provides administrative support for donor nonprofits.
Foundation Source tracks the activities of nearly 1,000 foundations with total assets of less than $50 million to which it provides support, fitting the financial profile for 98 percent of the 83,000 private foundations in the United States. The research arm of Wilton-based Commonfund is expected to issue a survey later this summer estimating investment returns and related spending for larger foundations and nonprofits.
After a 13.2 percent surge in 2017, the aggregate asset base for those nonprofits dropped 3.5 percent last year, Foundation Source determined. Still, foundations awarded only $600,000 less than the year before for just under $299 million in
total disbursements to charitable causes they support.
That dip did not come as a surprise given the declines in the stock market, according to Page Snow, chief philanthropic and marketing officer for Foundation Source.
“When we looked in January, their asset balances were up 4.9 percent again, so that year-end slump was more of a dip than a real downward slide,” Snow told Hearst Connecticut Media. “The thing for the nonprofits is that if (donors) feel their assets are
dropping — especially in the fourth quarter in the giving season — they worry that they are not going to be able to sustain the same level of funding. But the good news of this report is that the foundations gave nearly the same amount ... as they did the year before.”
The smallest organizations studied by Foundation Source gave the most, distributing amounts equal to 14 percent of their total asset balances, versus 7 percent for those with assets in excess of $1 million.
Under Internal Revenue Service rules, foundations must give away as philanthropic contributions amounts equal to 5
percent or more of their assets in any given year. The IRS distinguishes foundations from other nonprofits in relying on a single source of funding from one family or company, and as focusing on making grants to other charitable nonprofits rather than running programs directly.
More than 1,800 private foundations listed offices in Connecticut in 2016 as tracked by Candid, a New York City organization formed in February from the merger of Foundation Center and Guidestar which both track nonprofit filings with the IRS. They range in size from the $800 million Dalio Foundation
in underwritten by Greenwich billionaire Ray Dalio, founder of Westport-based Bridgewater Associates; to $60 reported by the Connecticut Maritime Foundation in Stonington, formed by the Connecticut Maritime Coalition to steer funds to initiatives that support public awareness of the state’s maritime industries heritage, with multiple Fairfield County executives on its board of directors.
Only this week, the Knights of Columbus announced a new charitable fund that allows philanthropists to open donordriven accounts that allow them to recommend where money is steered, after the Catholic-based fraternal organization in New Haven having affiliated last December with the CCFGiving donor-advised fund that is now known as the Knights of Columbus Charitable Fund.
“People want to have more control ... over where the money goes,” said Dennis Gerber, president of the new Knights of Columbus Charitable Fund. “They are looking to tie (donations) into an organization with which they might already have a connection to ... Contributions have been growing.”