September 15, 2019; Crain’s Cleveland Business
According to Crain’s Cleveland Business, foundations in Cleveland gave more in 2018 than the year before—a nice 10.6 percent increase in grants and donations. That includes the $2 billion Cleveland Foundation, a community foundation which disbursed $104.8 million in grants.
The five percent payout is not just a simple percentage of the net. The IRS uses a complicated accounting formula to determine that five percent, should one wish to do a deep dive.
And not every foundation gives out only five percent, as the George Gund Foundation illustrates. Gund is a private foundation, which typically means it got its primary donation before investing from one source. The foundation payout in grants in 2018 by Gund was $38.6 million, based on the 2017 assets of $403 million, which works out to 9.5 percent of assets.
In contrast, Key Bank is a corporate foundation; rather than building an endowment—Key Bank Foundation lists zero assets—the foundation basically serves as a pass-through vehicle for corporate donations. This mix of types of foundations is made more complicated, of course, by the presence of foundation-based donor-advised funds and spend-down foundations.
Finally, when we consider the nation last year, as reflected in the Giving USA report, we see this is not restricted to Cleveland; the trend’s unusual complexities extend beyond the mix of types of foundations a field may enjoy:
“Giving by foundations increased by an estimated 7.3 percent, to $75.86 billion in 2018 (an increase of 4.7 percent, adjusted for inflation),” but giving to foundations, on the other hand, decreased by 9.1 percent in inflation-adjusted dollars. He points out there’s not much short-term correlation between these two numbers; because foundations set their giving levels for multi-year cycles, giving from foundations is less sensitive to momentary fluctuations in the stock market.
So, long story short, enjoy it while it lasts. But when trying to predict how foundation giving levels might affect your nonprofit, the devil is in the details.—Marian Conway and Ruth McCambridge