September 4, 2014 From the President

Canadian Foundations: Seeing Patterns in the Evidence

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One of the most frequently asked questions we hear at PFC is: “what do we know about Canadian foundations?” How many are there? How much do they give every year? Who do they give to? These are data questions, of course. Underlying them is not only an interest in knowing who and what and where are Canadian foundations, but also why do they give and, ultimately, what difference do they make? It is impossible to answer the second set of questions without having solid answers to the first set. Over the past ten years, PFC has provided some answers to the “who” and” what” and “where”, using data supplied to us annually by our own members. But now, at last, we have a comprehensive report on the 150 largest Canadian grantmaking foundations prepared for us by the research staff at Imagine Canada and released publicly on September 4th. With this, we can begin to answer at least some of these basic questions with detailed evidence.

What does this evidence tell us?

Imagine and PFC built our report on the basis of data provided by the Canada Revenue Agency and carefully checked by the team at Imagine Grant Connect. We chose to take a long look back at data from the decade spanning 2002 to 2012, for both assets and gifts or grants made by Canadian grantmaking foundations. And we decided to focus on the largest 160 grantmaking foundations (including the ten largest community foundations) because this group collectively holds over half the total value of assets and the total value of grants made by all grantmaking foundations. What do we mean by grantmaking foundations? We mean foundations that maintain active ongoing grantmaking programs and make discretionary grants to unrelated charities. This includes most family, independent and community foundations but excludes fundraising arms for charities, donor-advised funds or operating charities, among others. We chose this definition so that we could focus specifically on the major private and public foundations that many charities think of first when they are seeking a foundation grant.

Among the key trends that we found:

  • Grantmaking foundations are growing steadily and fast in Canada: from 1994 to 2014, the number of private foundations increased by 76% and the number of public foundations by 69%
  • Assets are growing too, despite the slowdown caused by the financial crisis of 2008: from 2002 to 2012, the total value of assets of the largest 150 grantmaking foundations more than doubled in constant dollars, from $8.8 billion in 2002 to $18.7 billion in 2012.
  • Similarly, giving by the largest group of foundations increased by 73% in constant dollars, from $558 million in 2004 to $966 million in 2012.
  • The largest foundations tend to give at home: more than 78% of the value of their grants went to charities within their home regions
  • The largest foundations give in every area of the charitable community; in 2012, education and research was the leading funding area, followed by social services and health.

Our joint report provides a good baseline of information for the size and activity of the largest grantmakers. We now have evidence for the view that grantmaking foundations are playing an increasingly important role in funding the charitable sector in Canada, particularly in Ontario where the largest population base is found. But clearly there is much more for us to understand. What does the pattern of grantmaking within a funding area look like? For example, in Education and Research, which attracts so much of the granting activity, where are the dollars being invested and what are the outcomes? In terms of geography, are we seeing trends in the creation of more foundations in the West as more wealth is created in this region? Are grantmaking foundations distributing their grants across large and small charities? How are grantmaking foundations distributing their grants among program delivery, capacity building and capital projects?

These are all questions that we hope to answer in future research projects, combining data and qualitative evidence. Updating and expanding our evidence base annually will finally provide the answers to our questions about what, who, where and most importantly why grantmaking foundations are making a big difference in Canadian communities.

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