New Report: Philanthropic Capital for Communities
Posted by Federal Reserve Bank of Philadelphia on May 10, 2022
Community foundations and United Way affiliates are important sources of local philanthropic capital. Raising funds and generally distributing grants in a defined geographic place, they can represent the largest grantmaking institutions in a region. Yet as critical as these institutions are in supporting the work of nonprofits and addressing community needs, extensive data on their grantmaking activity have been lacking. In a new report, coauthors from the Federal Reserve Banks of Philadelphia and Atlanta, Indiana University Purdue University Indianapolis, and Ohio State University analyze grant-level data from a sample of 1,650 community foundations and United Ways representing over $20 billion in grants made between 2012 and 2016. Notable findings include:
- A substantial share of the grant dollars disbursed by United Ways supported human services organizations (62 percent), whereas community foundations distributed their funds more evenly across organizations working in education (24 percent), human services (20 percent), the arts (13 percent), and health (12 percent).
- The vast majority of grant funding was directed to organizations located in the same community as the grantmaking institution both for United Ways (91 percent) and, to a lesser extent, community foundations (71 percent).
- The typical grantmaking institution directed over one-third (35.4 percent) of its grant volume toward local organizations involved in community and economic development. The median value for United Ways (55.4 percent) was more than three times that for community foundations (16.3 percent).
Because they often play a variety of roles in their communities, the true impact of United Ways and community foundations is difficult to measure. This report examines a large sample of these institutions to quantify the important role they play as a source of philanthropic capital. We hope the grantmaking patterns documented in this report can inform conversations about place-based philanthropy and provide solid ground for future research.
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