Charitable Giving in Minnesota Drops as Recession Continues

Source: Minnesota Council on Foundations 10/10/2011

(Oct. 10, 2011) ― The Minnesota Council on Foundations (MCF) today released its Giving in Minnesota, 2011 Edition research report, the most comprehensive analysis of charitable giving in the state. The report shows giving by individuals, foundations and corporate giving programs totaled $4.9 billion for the 2009 research year, a decrease of 9.3 percent from 2008.

Individual giving in Minnesota declined 11.3 percent from 2008 to 2009, to $3.6 billion. The majority of the state’s charitable giving – 72 percent in 2009 – comes from individuals. Foundation and corporate grantmaking accounted for 28 percent – or $1.37 billion – in 2009, a decrease of 3.6 percent from 2008.

“People were hit hard by the 2008-2009 recession, so it’s understandable that giving by individuals was down most significantly,” says Bill King, MCF president. “Foundations and corporate givers made a strong effort to hold the line, and their grantmaking only dropped by a few percentage points.”

The 2009 research year, the most recent time period for which complete data are available, includes financial information from foundations and corporate giving programs with fiscal years ending between June 1, 2009, and May 31, 2010.

Foundation Assets Begin to Rebound

Minnesota foundation assets increased 6 percent to $18.33 billion in 2009 from $17.30 billion in 2008. But, the asset decline of 10.7 percent from 2007 to 2008 – the largest single-year decline since 1995 – remained a factor in 2009’s decrease in giving.

“The increase in foundation assets is good news, but it will take time and a more stable economy before giving levels catch up,” says King. “Foundations typically base grantmaking on a one- to three-year average of past asset performance, so 2008’s decrease may continue to have a negative impact for another year or so.”

Corporate foundations and giving programs, which comprise just 9 percent of the 1,470 grantmakers in the state, accounted for 46 percent of all grant dollars in 2009. Private foundations, the vast majority (85 percent) of Minnesota’s grantmakers, gave 42 percent of the grant dollars paid. The smallest portion of the state’s grantmakers, community/public foundations, accounted for 12 percent of the total grant dollars.

Education and Human Services Receive Largest Shares

As in previous years, the three subject areas receiving the largest shares of Minnesota’s grant dollars were education, human services, and public affairs/society benefit, at 26 percent, 23 percent, and 18 percent, respectively. In 2009, education displaced human services as the subject category receiving the largest share. Education has captured the largest share of Minnesota’s grant dollars in all but three years – 2001, 2005 and 2008 – since MCF began conducting Giving in Minnesota studies in 1976.

The subject area information is based on an analysis of grants of $2,000 or more made by a sample of 100 of Minnesota’s top grantmakers, These grants represent about two thirds of the state’s philanthropic giving for the year.

Overall, grantmaking by the sample declined 4 percent from 2008 to 2009. Giving to six of eight subject areas decreased. Funding for the public affairs/society benefit category grew, while grant dollars for education remained flat.

Giving to Minnesota Drops Under Fifty Percent

The 2009 research year marks the first period, since MCF began conducting Giving in Minnesota studies in 1976, during which less than half (48 percent) of the dollars given by Minnesota grantmakers went to organizations and programs serving Minnesota. The Twin Cities metropolitan area received 30 percent of the total grant dollars, Greater Minnesota received 10 percent, and Minnesota statewide received 8 percent. Organizations serving other states, the country and other parts of the world received 52 percent of grant dollars. In 2008, percentages were reversed, with 52 percent of dollars staying in Minnesota and 48 percent going elsewhere.

“In general, more corporate grantmakers’ dollars go out of state, as multi-nationals typically distribute their funding between Minnesota, where they are headquartered, and other regions of the world where they have facilities and do business,” explains King. “Also in 2009, several private foundations made larger than usual gifts to out-of-state organizations.”

Based on available data, just over half of the sample’s grants could be coded to a specific beneficiary group. Of those, the largest share of dollars – 22.2 percent – went to organizations that serve children and youth, which is similar to past years.

MCF conducts the Giving in Minnesota research annually to examine long-term trends in charitable giving. For the Giving in Minnesota, 2011 Edition summary and complete report, see www.mcf.org/research/giving.

About the Minnesota Council on Foundations

The Minnesota Council on Foundations (MCF), a regional association of grantmakers, works actively to strengthen and expand philanthropy. MCF members represent three-quarters of all grantmaking in the state, awarding more than $900 million to nonprofits annually. Members include family and private independent foundations, community and other public foundations, and corporate foundations and giving programs. For more information, visit www.mcf.org.