This past fall, the National Center for Family Philanthropy (NCFP) released Trends 2020, their signature research report on trends in family foundation governance, management and grantmaking. Founded in 1997, NCFP is the only nonprofit resource dedicated exclusively to families who give and those that work with them. Trends 2020 is their second national benchmark survey of family foundations and includes the responses of more than 500 family foundation leaders from across the United States. Here are some highlights:

According to NCFP, family foundations (e.g., a private foundation that actively involves the donor and members of the donor’s family) are estimated to represent more than 60% of the approximately 90,000 grantmaking foundations in the country. In fact, there are more family foundations in the U.S. than all other forms combined. Approximately 75% of all family foundations have less than $10 million in assets, and more than 70% of all foundations were created in the last 30 years.

Grant-Making Focus and Process:
Most family foundations focus their grant-making either on a specific geographic region and/or on one or more issue areas or populations. Almost two-thirds incorporate a geographic or place-based focus, and more than 50% focus their giving on one or more specific issues. Older and larger family foundations tend to focus their giving geographically, while the vast majority (82%) of newer family foundations (those formed in 2010 or later) focus their giving on issues.

The top three issue areas of focus for family foundations were:

38%

Education, college
access and literacy

27%

Poverty, hunger
and homelessness

25%

Social services,
family services

For newer foundations, the top issue areas were:

64%

Poverty, hunger and
homelessness

41%

Economic opportunity/inclusion, jobs,
workforce, employment, job training

The most common types of grants were:

69%

General operating support

61%

Multi-year

47%

Capacity-building

Roughly three-fourths of family foundations have guidelines in place related to the program areas they support. About half have set guidelines for creating change in the areas they support. Two-thirds require grantees to submit signed applications and half or more require grantees to:

60%

Submit a descriptive report
of activities undertaken
with grant money

59%

Report on
outcomes

50%

Sign a formal
grant agreement
with the foundation

Payout Rate: Private foundations are required to distribute 5% of their corpus on an annual basis. The majority (55%) of family foundations surveyed reported giving more than the 5% minimum. Roughly one-fourth (24%) contributed 6.1% to 10% annually.

Founder Involvement, Intent and Perspectives: More than half (56%) reported that their founder remains actively involved. When foundations with an involved founder were asked to identify the ways the founder’s involvement offers “considerable benefit,” their top responses were:

69%

Can share their
values and interests

65%

Have connections in the
community that benefit our work

59%

Plan on making additional
donations to the foundation
in the future

59%

Share the joy of philanthropy
with younger family members

Most family foundations have a clear understanding of their founder’s intent and say that they adhere very closely to that intent.

Finally, foundation boards that self-report as being “very effective” spend more time on governance, planning and strategy development, and spend less time learningabout issue areas, next generation engagement and external/community relations.

If you are interested in learning more, we encourage you to review the full report on NCFP’s website (www.ncfp.org). Because Westwood Wealth Management shares NCFP’s belief that family participation enriches philanthropy and that philanthropy strengthens families, Westwood is a proud sponsor of NCFP.

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