Health giving patterns of philanthropic foundations.

Abstract

The nine years from 1975 through 1983 were years of pressure, concern, and exploration for philanthropic foundations. Changes in the economy, the tax laws, and the federal government’s spending priorities had a major impact on foundation giving. Steady increases in the inflation rate during the 1970s reduced the real value of foundation grant dollars. At the same time, the depressed stock and bond markets reduced the value of foundation assets from which those grant dollars were drawn. The ability of foundations to recover was greatly hindered by the tax code, which at the time required foundations to pay out in grants virtually all of the earnings on their assets. During the early 1980s, the inflation rate gradually fell, the stock market recovered, and, beginning in 1982, the tax law was changed enough to stop the drain on foundation assets. Alongside these improvements, however, came new demands for foundation funds. Foundations responded to this increased demand in different ways. Some reduced their giving in order to rebuild their assets. Others, though frustrated by the impossibility of filling all gaps left by federal funding reductions, felt challenged to fund more efficient and effective programs, in human as well as in material terms. The fluctuation in dollars given is shown in Exhibit 1. Some of the biggest givers in 1980 were not among the biggest funders three years later. This essay highlights patterns in foundation giving in health. It is based on data from samples of foundations in each of three years–1975, 1980, and 1983. The samples ranged from 304 foundations in 1975 to 528 in 1983, and involved a review of over 7,000 grants each year. Foundations were classified each year as large, medium, small, or very small, based on their total giving in real dollars (adjusted for inflation). Interpretation of these data is influenced by information on foundations’