Instead of pulling back during the turbulent 2022 market conditions, many wealthy philanthropists with private foundations gave more, according to Foundation Source, a provider of private foundation services and research based in Fairfield, Conn.
The majority, 74% of respondents to a survey, said they maintained or increased their foundations grant-making activity last year. The Client Survey included 215 creators of private foundations.
Looking ahead to this year, most philanthropists said they anticipate keeping their charitable giving similar to 2022 or increasing it slightly.
Philanthropists who have decided to stick with their giving plan, and not react to a down market, should take comfort in knowing that others agree with their strategy, Gillian Howell, head of Client Advisory Solutions at Foundation Source, said in an interview.
“One interesting fact the survey revealed is that some of the philanthropist are adding equities to their foundation assets,” Howell said. “These are sophisticated investors and they know to take advantage of the down markets, and not run from them.”
Eighty-three percent of respondents kept the asset allocation of their foundation’s endowment the same last year. For those who made changes, 29% said they added equities, and 32% said they increased liquidity. Forty percent said the changes were made because of the unsettled economic environment.
“The results we are seeing from our 2022 Client Survey demonstrate that the generosity of donors persists even in the face of a challenging market environment,” Howell said in a statement. “But in our view, we’re also seeing the discipline that underpins the charitable giving strategies of many foundations. Rather than reacting to short-term dynamics, they are building long-term partnerships and deep-rooted philanthropic legacies.”
Howell added in the interview, “We don’t think the philanthropists will change strategies this year. These are people who are looking at long-term planning.”
More than half (58%) said they plan to maintain their giving levels this year and an additional 20% said they would increase their gifts. Eleven percent said they would scale back grant-making slightly, and only 1% said they would scale back grant-making significantly. Forty-two percent of respondents said they plan to add to their endowment in 2023.
Survey respondents said managing succession, hearing from other funders, and understanding the unique features of foundations are topics of highest interest for learning and collaboration, the survey showed.
More foundation creators are asking about how they give all of their money away before they die, Howell said. Foundation Source connects like-minded philanthropists with each other so they can explore these types of connections together, she said. Some foundation creators are concerned about bringing the next generation into their giving strategies.
“With over 47,000 grants made in 2022, totaling over $1.5 billion in charitable gifts from private foundations, the level of generosity among our clients is inspiring,” Sunil Garga, president and chief executive officer of Foundation Source, said in a statement. “The results of our latest client survey underscore how the mission-oriented private foundation structure can encourage donors, regardless of market conditions, to remain committed to their missions and serve communities around the world.”