Study of US Foundation Giving Abroad Raises Key Questions for the Field

August 16, 2018; Fast Company

As Ben Paynter writes in Fast Company, in 2015, US foundations gave $9.3 billion in grants to groups working outside the US. In the data set analyzed, this works out to 28.4 percent of a total of $32.6 billion in grants disbursed that year. These numbers are based on a new report from the Council on Foundations and Foundation Center. Titled the State of Global Giving by U.S. Foundations: 2011-2015 (Global Giving), the report provides significant data regarding international grants above $10,000 made by the nation’s top 1,000 nonprofit funders from 2011 through 2015.

One somewhat unusual feature of the Global Giving report is the paucity of text. The “report” is mainly a set of graphs. That said, the data that the charts contained in the report are informative. And one could ask a range of questions about them, including:

• Is it appropriate for US foundations to provide the majority of grants for international work to US-based organizations, or does this approach betray ongoing cultural imperialism?
• Why do so few grants go to operating support?
• Is philanthropy’s high degree of focus on health (almost half of all US international grants in dollars) the right focus to have?
• Is it better to have a lot of little grants or fewer large grants?

Nearly all of the numbers contained in the graphs are five-year totals, so the numbers cited below should all be understood as figures for the entire 2011-2015 period.

When it comes to international giving by US foundations, there is one giant—namely, the Bill and Melinda Gates Foundation (Gates). From 2011 through 2015, total US foundation giving abroad was $35.4 billion; Gates alone gave $17.9 billion.

Other leading funders, notes Paytner, include “the Susan Thompson Buffet Foundation, Ford Foundation, Foundation to Promote Open Society, and William and Flora Hewlett Foundation.” Giving by these four foundations totaled $3.78 billion. In short, combined the next four largest funders after Gates gave just a little more than 21 percent of what Gates distributed. The numbers are so dramatic that the report authors have to report two sets of numbers—one including the Gates Foundation and the other excluding it.

Looking at the data reveals some of the differences among foundations in their giving patterns. For example, the Ford Foundation made 4,044 grants to internationally focused groups between 2011 and 2015, while Gates gave out 5,238 grants. If you just looked at the number of grants, you might think the two foundations were roughly the same size. But dollars per grant are dramatically different. For Gates, the average grant was $3.43 million; by contrast, for Ford, the average grant was a much smaller $259,000—in other words, Gates gave out 13 times as much per grant as Ford.

True, the disparity in part simply reflects the fact that Gates spends 17 times as much as Ford internationally. That said, clearly Gates could have chosen to make grants to more groups rather than just give larger amounts. Also, some foundations that gave out less money than Ford chose to award greater amounts per grant.

Understandably, the report’s numbers, which covers the 2011-2015 period, don’t reflect Ford’s new strategy, but as Ford Foundation President Darren Walker has indicated, Ford itself is now aiming to give out larger grants to fewer groups.

A few other interesting findings:

• Latin America and the Caribbean get relatively little. Caribbean nations got only $343 million (1 percent) of grant dollars; only $2.7 billion (7.7 percent) went to Latin America. By contrast, sub-Saharan Africa got $9 billion (25.4 percent) and Asia got $6.6 billion (18.7 percent).
• The Gates Foundation is a big part of the reason why Asia and sub-Saharan Africa are the leading regions for US foundation giving. Gates spent $4.3 billion in Asia and $6.5 billion in sub-Saharan Africa. In other words, 60 percent of the foundation’s international giving occurred in those two regions. Also, 65 percent of US foundation grants to Asia and more than 70 percent of US foundation grants to sub-Saharan Africa came from the Gates Foundation.
• Intermediaries dominate among recipients. Sadly, $20.5 billion (57.9 percent) of total “international” grants go to US-based intermediaries. By contrast, direct grants to organizations abroad totaled only $4.1 billion (11.7 percent). Even rarer are direct grants to local organizations for general operating support, which totaled $381.8 million or 1.1 percent of grant dollars.
• A possibly more positive development is the rise of “non-US-based intermediaries.” These organizations received $10.8 billion in US foundation funding (30.4 percent of grants).

The report ends with two graphs that classify US foundation spending and official development assistance using the 17 categories of the United Nations’ Sustainable Development Goals. One wonders how one goes about making these category calls. But, not surprisingly, health dominates US foundation spending at $17 billion, roughly 48 percent of total international giving, largely because of Gates; reducing inequalities was last with $248.9 million or 0.7 percent of giving.

By the way, official development assistance worldwide totaled $778.6 billion over those five years. That’s 22 times as much as US foundations gave. It’s a useful reminder. While philanthropy plays a key role, abroad, as at home, policy remains critically important.—Steve Dubb

Correction: This article has been altered from its initial form to better reflect the percentage of international grant monies disbursed.