6 posts categorized "author-Larry McGill"

Current Trends in Philanthropy: U.S. Foundation Support for Climate Action

November 09, 2018

IStock-470785468Released last month, the latest Intergovernmental Panel on Climate Change (IPCC) report paints a bleak picture of the disastrous consequences facing the planet if the average global temperature climbs 1.5 degrees Celsius above pre-industrial levels. The authors of the report warn that humanity will have to cut carbon emissions to almost half the 2010 level as early as 2030 in order to avoid long-lasting and potentially irreversible impacts from climate change, including the loss of many important ecosystems.

The issue of climate change and the impact of human activity on the environment has been hotly debated and has received significant attention from U.S. foundations. According to Foundation Center data, the largest one thousand U.S. foundations gave between $232 million and $261 million annually for climate-related issues between 2011 and 2015, with the exception of 2012, when a large infusion of funds into the ClimateWorks Foundation pushed the annual total to $340 million.

This represents about one percent of giving during that period but does not represent all giving that may contribute to the mitigation of climate change and its effects. Indeed, as much as another 3 percent of foundation giving over that period related to energy issues or sustainable agriculture may have supported efforts to address energy usage and current agricultural practices so as to lessen their contributions to global warming.

Fig1.1_climate action

Energy efficiency and electrification, in particular, have been a significant focus of foundation funding for climate action, with 57 percent of all climate change-related grants funded by the largest one thousand U.S. foundations between 2011-15 related to energy efficiency or renewable energy efforts. Food and agriculture, on the other hand, represented only 3 percent of climate action funding over the same period. Increasingly, however, foundations are recognizing the importance of sustainable food production in tackling climate change and are approaching the issue through an intersectional lens, as evidenced by initiatives such as Project Drawdown.

Fig. 1.2_climate action

The year 2015 also saw the adoption of the Paris Agreement, which the United States initially signed but, at the behest of the Trump administration, subsequently withdrew from. Given that the deployment of capital and funding is a critical factor in efforts to de-carbonize the global economy, the withdrawal of the U.S. from the agreement raises the question as to whether and how foundation giving has changed in response.

Detailed grantmaking data for 2016 (and subsequent years) is still being compiled, so it's difficult to draw any conclusions about the immediate response of foundations to the Trump administration’s decision. That said, several major foundations have announced significant commitments since the agreement was ratified in 2015.

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Current Trends in Philanthropy: International Giving by U.S. Foundations

November 01, 2018

Global-giving-report-coverInternational giving by large U.S. foundations reached an all-time high of $9.3 billion in 2015, up some 306 percent, from $2.1 billion, in 2002, when Foundation Center first started tracking it on an annual basis. During the same period, international giving also increased as a percent of total giving, from 13.9 percent in 2002 to 28.4 percent in 2015.

While the number of grants to international organizations and causes has stayed relatively stable, up some 31 percent (from 10,600 to 13,900) since 2002, average grant size has increased more than three-fold, from $200,900 in 2002 to $604,500 in 2015.

Much of that growth can be attributed to the Bill & Melinda Gates Foundation, which accounted for more than half (51 percent) of all international giving from 2011 to 2015. When Gates Foundation grantmaking is excluded, we see that international giving grew at a somewhat slower rate (21 percent) during the five-year period, reaching a high of nearly $4 billion in 2015.

Like foundation giving in general, international giving by U.S. foundations is largely project-focused: despite continued calls from nonprofit leaders for foundations to provide more general operating support, 65 percent of international giving by U.S. foundations from 2011 to 2015 was for specific projects or programs. (General support refers broadly to unrestricted funding and core support for day-to-day operating costs. Project support or program development refers to support for specific projects or programs as opposed to the general purpose of an organization. For more information, see https://taxonomy.foundationcenter.org/support-strategies.)

Data also show that U.S. foundations continue to fund international work primarily through intermediaries. From 2011 to 2015, 28 percent of international giving was channeled through U.S.-based intermediaries, 30 percent went through non-U.S. intermediaries, and just 12 percent went directly to organizations based in the country where programs were implemented. What’s more, just 1 percent of international giving was awarded in the form of general support grants directly to local organizations, and those grants were substantially smaller in size, averaging just under $242,000, while grants to intermediaries averaged just over $554,000.

It's important to note that these intermediaries vary in type and structure, and include:

  • International nongovernmental organizations (INGOs) operating programs in a different country than the country where they are headquartered.
  • U.S. public charities re-granting funds directly to local organizations.
  • Organizations indigenous to their geographic region but working across countries (i.e., not just in the country where they are headquartered).
  • Multilateral institutions working globally (e.g., the World Health Organization, Global Fund to Fight AIDS, Tuberculosis and Malaria).
  • Research institutions conducting public health research or vaccination programs targeted at specific countries that are not the country where they are headquartered.

Unsurprisingly, health was the top-funded subject area supported by U.S. foundations in the 2011 to 2015 period, with grants totaling $18.6 billion accounting for 53 percent of international grantmaking.

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Current Trends in Philanthropy: The Big Picture

October 29, 2018

Thebigpicture"Philanthropy" in the United States is a vast industry composed of individuals, foundations, and corporations that, in 2017, contributed $410 billion to charitable causes, an amount roughly equivalent to 2 percent of gross domestic product.

Of this total, nearly 70 percent is contributed by individuals, with more than half of that comprised of giving to congregations. The second largest source of philanthropic giving (some 24 percent) comes from grants made by private foundations like Gates, Ford, and Hewlett, which, along with a few dozen other major foundations, dominate a diverse ecosystem populated by tens of thousands of foundations of all sizes. Third is bequests, through which people designate universities, hospitals, and other tax-exempt organizations as beneficiaries in their wills. And last comes corporations — a surprise to many observers, who, given the dominant position of the private sector in the U.S. economy, no doubt assume that businesses play a far greater role in philanthropy.

My organization, Foundation Center, compiles comprehensive data on the more than 87,000 active U.S. foundations and, working with partners around the world, a growing number of foundations and foundation-like organizations in Europe, Asia, and Latin America. The center envisions a world enriched by the effective allocation of philanthropic resources, informed public discourse about philanthropy, and broad understanding of the contributions of nonprofit activity to transform lives and increase opportunity for all.

We also see U.S. philanthropy as having arrived at a critical juncture. Buoyed by a strong economy, U.S. foundations find themselves navigating a complex landscape in a volatile and highly polarized political environment. Foundations have something valuable to contribute in this environment —  namely, flexible resources free from market, electoral, and fundraising pressures. How they choose to use those resources to advance their work over the next few years is of interest to most Americans.

In a series of blog posts to be published over the next few weeks, we will look at some of the emerging issues that are getting the attention of U.S. foundations and will consider a number of frameworks (e.g., the Sustainable Development Goals) that are shaping the flow of philanthropic resources to different parts of the world. We'll also examine a variety of modalities — from traditional grant funding to experimentation with crypto-currencies — that foundations are using to advance their missions.

As many of you are aware, a growing chorus is questioning the foundation model, even as some donors are looking to experiment with new forms of philanthropy. A handful of younger philanthropists (Mark Zuckerberg, Pierre Omidyar) have opted to create limited liability corporations instead of setting up private foundations and have declared that their investments in social good will be directed to a broad spectrum of organizations and vehicles, not just tax-exempt nonprofits. Still, the predominant organizational form for U.S. philanthropy is the private grantmaking foundation, followed by corporate, operating, and community foundations. These legal structures and the regulatory framework in which they are embedded provide considerable flexibility for experimentation and innovation, and their continued popularity suggests that, for now at any rate, the "new philanthropy" is more of a rhetorical device than an actual phenomenon.

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Finally! A Global (Data) Language!

October 25, 2017

Trying to get global consensus on anything is nearly impossible. But in collaboration with a dynamic cohort of individuals and organizations, we've managed to develop a new manifesto with respect to the structure and sharing of data about global philanthropy that is valued across contexts. Meet the new Global Philanthropy Data Charter.

GDC_infographic
Philanthropy, and more broadly, civil society, play a large and increasingly visible role in solving complex societal issues around the globe. Over the last twenty years, as private wealth in countries around the world has exploded, we've seen a significant increase in giving by institutions and individuals. At the same time, technology adoption and economic populism have emerged from the shadows while foreign aid to the least developed countries has declined. Established in 2000, the Millennium Development Goals paved the way, in 2015, for the multi-stakeholder Sustainable Development Goals. Each step in this evolution was guided by data. Good data? Not always. But in our rapidly changing world, everyone must tell their own story — or risk having it told for them. The good news? Philanthropy has had to become more transparent, more accountable, and more effective. Rather than siloed efforts, maximizing impact based on smart giving and shared learning has become a collective world-wide aspiration.

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'Foundation Funding for U.S. Democracy': What Does the Data Say?

July 27, 2017

The following post is part of a year-long series here on PhilanTopic that addresses major themes related to the center's work: the use of data to understand and address important issues and challenges; the benefits of foundation transparency for donors, nonprofits/NGOs, and the broader public; the emergence of private philanthropy globally; the role of storytelling in conveying the critical work of philanthropy; and what it means, and looks like, to be an effective, high-functioning foundation, nonprofit, or changemaker in the twenty-first century. As always, we welcome your thoughts and feedback.

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It's no secret that many Americans are wondering whether our democracy is still working. The signs of dysfunction are everywhere — allegations of election tampering, voter suppression, and "fake news" comprise a continuous soundtrack accompanying distressingly low levels of electoral turnout, ever more bizarre examples of gerrymandering, and perpetual government gridlock.

Concerns about U.S. democracy are on the minds of America's philanthropic institutions as well. We know, of course, about the "dark money" that is being pumped into the electoral process in an attempt to influence the outcomes of U.S. elections. But what about the efforts of U.S. foundations who see the task of improving U.S. democracy as an important part of their philanthropic missions? (And which, unlike dark money vehicles, are required to disclose information about their giving in publicly available tax documents.)

In partnership with eight foundations, Foundation Center, in 2014, developed Foundation Funding for U.S. Democracy, a free online portal that tracks the efforts of foundations to improve American democracy. The tool provides detail on more than 35,000 relevant grants, with additional data added regularly. (Next week, I'll be providing a tour of this mapping platform via a free webinar. Register here.)

Since 2011, U.S. foundations have spent more than $3.7 billion on efforts to improve our democracy. Our data show that foundations are almost equally focused on the areas of encouraging civic participationimproving how government functions at the national, state, and local levels; and supporting an accountable and democratic media, with about  a third of their democracy-focused grant dollars going to each area. Campaigns and elections, the fourth major area of foundation funding for democracy, received about 10 percent of democracy-focused grant dollars. (This adds up to more than 100 percent, because some grants address multiple issues.)

US Democracy_funding by category_fb

These findings suggest that important issues need to be addressed in all four areas — civic participation, government, media, and campaigns and elections — and that focusing on any single area isn't sufficient to ensure a well-functioning democracy. Civic participation funders are focused, in particular, on encouraging issue-based participation by the public; government-focused funders prioritize grantmaking in the area of civil liberties and the rule of law; media-focused funders split their grantmaking almost equally on strengthening journalism and improving media access and policy; and those focused on campaigns and elections are primarily funding activities to educate voters and increase voter turnout.

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Do You Know?

November 04, 2013

(Larry McGill is vice president for research at the Foundation Center.)

FCStats_about_illustrationRaise your hand if you know the answer to the following question: How many grant dollars did U.S. foundations award in 2011? Anyone?

Let me ask a different question. If you needed to find the answer to that question, where would you go? Foundation Center? Good -- you're on the right track. So, you visit the Foundation Center's Web site and where do you look? Not sure? In the past, you weren't alone.

But all that has changed. Today, the Center is launching a new, free statistical tool called "Foundation Stats" at data.foundationcenter.org.

The answer to almost every basic statistical question about the collective work of U.S. foundations can be found there. You don't have to buy any publications and you don't have to dig through thousands of static data tables on the center's Web site. Plus, you can download and reuse, for free, any of the statistics you find in Foundation Stats. You can even grab these statistics using an application programming interface (API), if you're so inclined.

Usually, I'm not so shamelessly self-promotional, but I can barely contain my excitement about Foundation Stats. Let me tell you why.

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