Giving in Minnesota, 2006 Edition
Overview
This section provides an overview of trends and patterns in total Minnesota charitable giving by individuals, private foundations, corporate foundations and giving programs and community/public foundations. Minnesota grantmaking comprises giving in Minnesota and outside Minnesota, including international giving. The overview includes national comparisons.
Total Charitable Giving
In 2004, individuals and foundations and corporate giving programs gave a total of $4.9 billion, up 9 percent, compared to the 2003 increase of 3 percent. Total giving in Minnesota has experienced gradual growth following a decline in 2002.
Individual charitable giving continued to comprise the highest portion of state giving, accounting for 78 percent of the total. The remaining 22 percent represents grantmaking by foundations and corporate giving programs. Private foundations and corporate grantmakers were responsible for 10 percent and 9 percent, respectively, and community foundations for 3 percent.
Total Individual Giving
Individual charitable giving continued to rise in 2004, with Minnesotans giving an estimated $3.9 billion, a 12.3-percent increase (9 percent in inflation-adjusted dollars), compared to $3.5 billion in 2003. This rise in the state’s individual charitable giving closely parallels national individual giving for the same year.
The total number of Minnesotans claiming charitable contributions on tax returns increased from 875,793 in 2003 to 896,103 in 2004, from a high of 913,172 individuals itemizing in 2002. In light of the increased giving dollars, the decrease in the number of givers reflected the soft but improving economy where fewer individuals contributed larger amounts.
The average contribution per itemized return increased from $2,953 in 2002 to $3,214 in 2003 and to $3,528 in 2004. Despite this increase, the average size of contributions by Minnesotans remained below the national averages of $3,731 in 2003 and $4,012 in 2004. This difference has traditionally been related to Minnesotans itemizing at a higher rate than the national average, a factor that tends to include more individuals with lower charitable giving levels in the average contribution figure. Minnesota continued to rank fifth in the number of state residents itemizing their national returns, with an increase from 36.7 percent filing itemized returns in 2003 to 37.2 percent in 2004. The national percentages of itemizers were 29.4 percent in 2003 and 30.4 percent in 2004.
Minnesota ranked 17th in the percentage of adjusted gross income given to charity in 2004, an improvement from 2002 and 2003, when the state ranked 20th.
Total Foundation and Corporate Giving
Following a dip in foundation and corporate giving in 2002 due to the recession following the 9/11 terrorist attacks, total grants paid rose in 2003 and 2004, and foundation assets also continued to increase through 2004. The number of grantmakers steadily increased from 1,227 in 2001 to 1,341 in 2004.
A more detailed analysis of trends and patterns by the top 110 grantmakers in the state, the Giving in Minnesota sample, is discussed in the subsequent sections of this report.
Minnesota Grantmakers
In 2004, there were a total of 1,341 active grantmakers — 1,150 private foundations, 111 corporate foundations and giving programs, and 80 community and public foundations. In 2004, 45 new grantmakers were included, compared to 19 additions in 2003. There was a large increase in new foundations between 1999 and 2001, and more gradual increases in the number of grantmakers since 2001.
Private foundations have disproportionately increased in numbers compared to corporate and community foundations, including 35 additions in 2004. Community foundations increased by six to 80 in 2004, with the inclusion of Luverne Area Community Foundation, the Minnesota Center for Philanthropy and other community foundations that had been inactive in the prior year. Corporate grantmakers have continued to see gradual yet consistent increases in their numbers.
Total Grants Paid
Minnesota grantmaking grew to over $1 billion in 2004 for the first time. Minnesota’s 1,341 active grantmakers gave a total of $1.072 billion in 2004, up about 12 percent (8.6 percent in inflation-adjusted dollars) from $958 million in 2003. The 2003 figure was up 7 percent (5.2 percent in inflation-adjusted dollars) after a decline 2002.
The drop in state grantmaking in 2002 resulted from the economic recession following the 9/11 terrorist attacks and represented the first dip in 20 years of the Council’s reporting on giving trends. A gradually improving economy in 2003 and 2004 helped lift foundation and corporate giving. The increase in grantmaking is attributable to growth in the value of endowed assets, as well as improved corporate profits, the source of most corporate grants. A number of community foundations experienced a higher level of grants due, in part, to an increase in gifts from donors.
The increase in grants paid surpassed the prediction made by foundations in the Council’s survey reported in the 2004 Outlook Report, in which most foundations expected less than a 5-percent increase in their giving, compared to the 12-percent actual increase.
Grants Paid by Grantmaker Size and Type
Continuing a long-term trend, a small number of Minnesota grantmakers awarded the vast majority of grants paid in 2004. Just 2.5 percent of Minnesota grantmakers, or 33 foundations and corporate giving programs, gave 69 percent of total grants paid in Minnesota in 2004, or $739.2 million.
Another long-standing trend underscores that a relatively small group of grantmakers by type make a large percentage of grants. Of the 1,341 Minnesota grantmakers in 2004, the 111 corporate foundations and giving programs, or 8 percent of the total, awarded 42 percent of grants. Private foundations, which represented 86 percent of the total number, or 1,150 grantmakers, made just 46 percent of total grants; the majority of these grantmakers are small family foundations making $50,000 or less in grants. Community/public foundations, with 80 grantmakers (6 percent), awarded 12 percent of total grants in 2004.
Over four years, 2001 to 2004, corporate grantmaking showed a strong upward trend, with private grantmaking rebounding to the high-level mark of 2001 and community/public grantmaking on a less dynamic growth trend.
Private foundation grantmaking increased 11.4 percent to $493 million, still below the highest level of $522 million in 2001. Private foundations set grant levels through the year based on an average of past asset investment performance typically over one to three years; thus, these foundations have been slower to recover from the recessionary downturn that was reported in grantmaking in 2002.
Corporate grantmakers, which rely on profits to set grant levels, have showed improvements year by year as the economy has improved since the recessions. Corporate grantmaking reached a high of $448 million in 2004, up 12.9 percent from 2003.
Community/public foundations showed strong gains of 9.9 percent in 2003 but flat growth (.03 percent) in 2004. Community foundation giving grew from $115 million in 2001 to $130 million in both 2003 and 2004.
Foundation Assets
Foundation assets increased to $15 billion in 2004 from $13.5 billion in 2003, a 9-percent increase, compared to the 16-percent increase in the prior year. As described by the Council in the Giving in Minnesota Report, 2005 Edition, and 2004 Outlook Report, the increase in assets (though decrease in percentage of change) is an indication that foundations were experiencing better investment returns in the recovering stock market.
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Giving in Minnesota
2006 Edition
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Table of Contents
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Index
Section I:
Introduction
Section II:
Key Findings
Section III:
Minnesota Giving Overview
Section IV:
Sample Trends
Section V:
Methodology
Section VI:
Appendices
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About This Report
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Giving in Minnesota, an annual research report produced by the Minnesota Council on Foundations since 1984, provides a comprehensive analysis of the trends and patterns of giving by organized philanthropy in the state.
This report provides an overview of giving by Minnesota foundations and corporations domestically and internationally, as well as giving by individual Minnesotans. The report also provides an in-depth analysis of the Giving in Minnesota sample of the largest Minnesota foundations and corporations by subject area, geographic area, intended beneficiary and support type.
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