Large Nonoperating Private Foundations Panel Study, 1985-1997 - Statistical Data Included

Statistics of Income Bulletin, Summer, 2001 by Melissa Whitten

Each year, private foundations contribute billions of dollars to various charitable activities. The financial assistance provided by these organizations supports programs dedicated to education, health and human services, environmental preservation, arts and culture, and many other areas. Through this assistance, private foundations make a significant contribution to the nonprofit sector. While many small foundations donate large percentages of their annual revenue to charitable giving, the major economic impact of private foundations is attributable to the relatively small number of organizations that hold the largest amounts of assets and pay out the greatest amount of charitable dollars. The largest 100 foundations alone, though they make up less than 1 percent of the total number of private foundations, generally report approximately one-third of the charitable contributions paid and the fair market value assets held by foundations. Between 1985 and 1997, asset holdings for the largest 100 nonoperating private foundations included in the panel and operating throughout that period more than tripled, rising from $37.6 billion to $120.6 billion. Charitable contributions, gifts, and grants also increased considerably, rising from $1.5 billion for 1985 to $4.5 billion for 1997 [1].

Panel Study Methodology

The statistics presented in this article are based on a panel constructed from sample data collected from Form 990-PF, Return of Private Foundation (or Section 4947(a)(1) Charitable Trust Treated as a Private Foundation), the annual information return filed by private foundations and charitable trusts. Data were assembled for domestic nonoperating private foundations appearing in the Statistics of Income (SOI) samples for Reporting Years 1985-1997 [2]. The panel was comprised of the largest 100 nonoperating foundations, as determined by the size of Reporting Year 1997 fair market value of total assets that met the criterion of being present in all of the annual SOI samples used for this study. Twenty-two of the largest foundations, based on the 1997 fair market value of total assets, did not meet this criterion and were, therefore, eliminated from the final panel. Operating foundations, which conduct their own charitable activities and are not legally required to make financial distributions, as well as private foundations organized abroad and nonexempt charitable trusts required to file Form 990-PF were not included in the panel. Unless otherwise noted, the aggregate figures herein were calculated based on data obtained from only those large asset-size organizations meeting all of the criteria to be included in the final panel [3]. Selected statistics for these organizations, in inflation-adjusted constant dollars, are shown in Figure A [4].

Figure A

Large Nonoperating Private Foundations Panel: Selected Financial
Items, 1985-1997, in Constant Dollars

[Money amounts are in million of dollars]

                          Assets

                                Net non-      Total net
Reporting year     Total     charitable-use   investment
                               assets(1)        income

                    (1)           (2)            (3)

1985              51,047.4      44,949.9        5,511.2
1986              57,375.1      53,453.8        6,339.0
1987              55,448.0      56,314.2        5,960.7
1988              61,076.1      56,205.1        5,206.6
1989              65,962.3      61,043.3        5,428.2
1990              66,704.1      62,143.5        5,910.3
1991              74,994.3      66,975.9        5,366.9
1992              73,278.3      69,471.3        6,007.8
1993              73,944.2      69,550.0        5,887.3
1994              75,097.1      69,928.6        5,407.1
1995              88,412.7      78,563.2        7,136.5
1996             103,344.9      89,280.5        9,066.7
1997             118,292.0     103,708.1       10,105.4

                           Expenses

                             Charitable purposes

                                     Contributions,
Reporting year    Total     Total      gifts, and
                                        grants(2)

                   (4)       (5)          (6)

1985             2,765.9   2,277.9      2,087.5
1986             3,045.8   2,499.3      2,292.0
1987             3,210.7   2,691.6      2,458.1
1988             3,418.6   2,859.2      2,599.2
1989             3,528.6   2,951.4      2,669.8
1990             3,648.8   3,147.6      2,841.0
1991             3,941.1   3,419.0      3,069.0
1992             4,196.1   3,653.8      3,289.3
1993             4,158.5   3,715.4      3,330.3
1994             4,334.7   3,810.2      3,404.7
1995             4,674.6   3,971.4      3,542.8
1996             5,509.7   4,696.3      4,230.9
1997             5,775.1   4,924.5      4,439.3

(1) These data are based on fair market value assets as calculated
monthly and may differ from the end-of-year fair market value assets
reported elsewhere on Form 990-PF.

(2) These data are based on the amount of contributions, gifts, and
grants that foundations actually disbursed for charitable purposes
using the cash receipt and disbursement method of accounting.