The results of the Council on Foundations’ latest CF Insights Annual Survey, which tracks community foundation activity in fiscal year 2023, present a mixed picture: The U.S. economy had begun to recover from the worst effects of the COVID-19 pandemic, driving greater returns on invested assets, yet individual giving fell—not only for community foundations but across the broader sector. Yet, as we found in our last CF Insights survey, for fiscal year 2022, community foundations’ grantmaking remained resilient, staying on a long-term growth trajectory during and following periods of economic uncertainty. economic uncertainty.
Our 2023 survey included self-reported data from roughly 200 community foundations and, for the first time, supplementary IRS Form 990 data from Candid on several hundred more community foundations, providing a more complete picture across the field.
Community foundations’ grantmaking exceeded fundraising in fiscal year 2023
For the second straight year, survey results show year-over-year increases in grantmaking by community foundations across all size cohorts, even as fundraising totals continued to decline. Among the 228 community foundations included in both the 2022 and 2023 surveys, the median increase in grantmaking was 10%, despite a median drop of 3% in fundraising. Zooming out to the entire sample of 612 community foundations in the 2023 survey, we see they collectively awarded $18.7 billion in total grant dollars, eclipsing the $16.2 billion in total fundraising. This is the first time since CF Insights began releasing survey data (with fiscal year 2008) that total grantmaking exceeded total fundraising.
To track long-term growth trends in assets, gifts, and grants, we zoom in on 100 of the largest community foundations by asset size, a consistent data set over the last 10 years. We see that collective total gifts to these community foundations fell by 17% in fiscal year 2023 from the previous year, returning to 2020 levels after a field-wide spike in the immediate aftermath of the pandemic. At the same time, these community foundations increased their collective grantmaking by 11%, a double-digit year-over-year increase for the second consecutive year. As with the broader field, the largest community foundations continued to mobilize increased resources into communities.
Donor-advised funds remain a significant driver of fundraising and grantmaking
Much of those resources continued to be mobilized through donor-advised funds (DAFs) in fiscal year 2023. Among the 483 community foundations that provided DAF-related data for 2023, DAFs accounted for 30% of all reported assets and 47% of all fundraising dollars raised.
As CF Insights surveys show every year, DAFs are highly active grantmaking vehicles, awarding 57% of all grant dollars given in 2023. The median community foundation in the sample providing this data maintained a DAF “flow rate” (grant dollars disbursed divided by gift dollars received that year) of 99%, meaning that 99 cents of every dollar raised went to causes and organizations DAF holders sought to support. Nearly half (49%) of the community foundations in the data set reported DAF flow rates of over 100%, meaning that those accounts disbursed more dollars than they brought in as gifts.
The survey also found that DAF account holders tend to disburse their funds at a faster clip than discretionary and other fund types. The median community foundation’s DAFs maintained a median 9% distribution rate (grant dollars as a percentage of assets) in the aggregate, while other fund types held a roughly 6% distribution rate.
Positive investment returns supported field-wide asset growth
Of the community foundations included in the survey for both fiscal years 2023 and 2024, 88% saw year-over-year asset growth due to positive investment returns. With the median community foundation in this data set seeing assets grow by 11%, these positive returns offset the potential effects of declines in fundraising and helped many community foundations maintain high levels of grantmaking.
Looking toward fiscal year 2024
In fiscal year 2024, the major stock indices saw continued overall growth, which may again have resulted in asset growth for community foundations, even if fundraising totals may have continued to fall. It will be interesting to see whether giving to community foundations continued to decline or leveled off, and how community foundations’ grantmaking levels were affected, if at all.
On April 30, I’ll be hosting a webinar to discuss these and other key findings from the CF Insights Annual Survey for fiscal year 2023, where I’ll dig into some of the more detailed business model data only community foundations that self-report are able to provide. Visit the Council’s website to learn more about the CF Insights survey and how you can contribute to our collective knowledge of how community foundations operate when we open our survey to collect fiscal year 2024 data.
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