The State of Philanthropic Giving in 2011

(Niki Jagpal is research and policy director and Kevin Laskowski is senior research and policy associate at the National Committee for Responsive Philanthropy. Both frequently blog about the role of philanthropy in society. You can follow NCRP on Twitter @ncrp.)

Anyone working in the nonprofit sector knows the value of measurement. If something is important -- whether it's your own impact and outcomes or a field-wide trend -- you measure it. Somehow, some way, you track it.

NCRP recently completed an analysis of 2011 foundation giving based on our own Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact guidelines. In the past, we examined average giving over three years to monitor trends in giving to underserved communities and for social justice, as well as general operating support and multiyear funding.

This year, we've moved to analyzing data annually in the hopes of providing the sector with real-time information on emerging trends and associations. The figures are based on the Foundation Center's grants sample database, which comprises grants of at least $10,000 awarded by more than one thousand of the nation’s largest grantmakers, representing approximately half of the grant dollars awarded by U.S. foundations in 2011. Grantmakers can use the information to see how they are performing compared to their peers, as well as as a guide for future strategy. Grantees can see which funders are providing vital types of funding in support of transformative change.

The Philanthropic Landscape 2011 reveals important changes in the philanthropic ecosystem:

• In The State of General Operating Support 2011, the share of foundation dollars classified as general operating support (also known as "core support") increased from the 2008-10 average of 16 percent to 24 percent in 2011. A welcome and hopefully lasting shift, the increased share to general operating support is the highest NCRP has seen in recent years.
• In The State of Giving to Underserved Communities 2011, we found that 42 percent of foundation grant dollars were classified as benefiting underserved communities such as economically disadvantaged persons, racial and ethnic minorities, women and girls, disabled persons, and other groups. That is up slightly from 40 percent of grant dollars in the 2008-10 period.
• In The State of Multi-Year Funding 2011, nearly 90 percent of funders reported making no multiyear grants. The Bill & Melinda Gates Foundation alone accounted for 60 percent of the $7.2 billion in multiyear grant dollars awarded in 2011.
• In The State of Social Justice Funding 2011, the share of giving to social justice declined from an average of 15 percent of total grant dollars in the 2008-10 period to 12 percent of grant dollars in 2011. Conversely, the number of grantmakers providing our proposed level of 25 percent of grant dollars for social justice work increased from 76 to 94.

When we restricted our analysis to only those grantmakers that reported some level of giving toward each benchmark, we saw important, if incremental, progress. It appears that, in the aggregate, once funders begin to intentionally identify the beneficiaries of their grantmaking or prioritize social justice, general operating, or multiyear support as a part of their strategy, they increase or maintain that commitment.

This suggests that we are making progress toward creating a more responsive, effective, and accountable foundation sector. There are sizeable groups of funders that understand the benefits of engaging and empowering vulnerable communities and the nonprofits that work with them. Our challenge remains to engage with and help foundations see the value of awarding both more grants and more grant dollars in these ways.

Part of the solution is accurate and expanded reporting, along with a willingness to adapt to the variable needs of the communities served by the nonprofit sector. We urge you to make a commitment to report the particulars of your grantmaking to organizations like the Foundation Center and to pay particular attention to providing information about the nature, purpose, duration, and intended beneficiaries of your grantmaking.

In addition, take stock of your own numbers and compare them to those of your grantmaking peers. E-mail us at research@ncrp.org if you'd like to learn more about how your foundation appears in the data.

Last but not least, as we continue to analyze trends and report on them, let's all collectively ask ourselves whether the field is doing all it can to make the world a more inclusive, just, and democratic place. Engage in critical self-reflection and ask yourself: Are the communities we care about seeing the benefit of our grantmaking? What role does public policy, advocacy, and civic engagement play in our strategy and in the work of the nonprofits we support? What role could it play? Are we providing enough long-term flexible support to achieve the results we hope to see? Are we doing enough to see the results we all hope for?

Use those answers to inform and adjust your strategy. With a more responsive foundation community, the causes and communities we all care about will see real results.

-- Niki Jagpal and Kevin Laskowski