While estimates of total philanthropic spending provide a rough method of comparing philanthropic giving by different components of society, this Appendix examines the distribution of foundation and USG spending, consistent with the aims of this study. Distributions are examined both geographically and across six programmatic sectors within health and social services: development, education, environment, health, human services, and relief. Identifying areas where foundations and USG currently focus their resources establishes a context for analyzing foundation-USG interactions. Specifically, given ASPE’s interests, MPR used available data to answer the following research questions:
1. What is the level of foundation and USG funding on international health and social service initiatives? What types of problems does it address and in what geographic regions?
2. What is the level of foundation and USG funding on domestic health and social service initiatives? What types of problems does it address?
This Appendix describes data sources used to address these questions and includes a few caveats about interpreting the spending estimates (Section A). We then describe foundation spending (Section B), followed by USG spending (Section C). In both sections, reflecting the overall study’s emphasis on international initiatives, international spending is examined first, beginning with spending by sector and then spending by international geographic region. Domestic spending is presented by sector only. Spending patterns across sectors and regions are then addressed in Section D, followed in Section E by a brief summary.
A. Data
No single source provides comprehensive and relevant data on domestic and international spending for foundations and USG. Therefore, three different sources were used to estimate funding levels (Table A.1). Data from the Foundation Center were used to estimate both international and domestic spending by U.S.-based foundations. Data from the Organization for Economic Cooperation and Development (OECD) and from the Federal Assistance Award Data System (FAADS) were used to estimate international USG spending and domestic USG spending, respectively.[2]
| International | Domestic | |
|---|---|---|
| Foundations | Foundation Center Grants Database | Foundation Center Grants Database |
| USG | Official Development Aid (ODA) data, compiled by OECD’s Development Assistance Committee (DAC) | Federal Assistance Award Data System (FAADS) |
For domestic and international spending, data were broken into six domains or sectors: (1) development,[3] (2) education, (3) environment, (4) health, (5) human services, and (6) relief. Funding outside of these domains was excluded from the estimates. Funding levels are presented for several recent years: 2002, 2004, and 2006—the most recent year for which data are available. For international funding, data were also broken out by geographic region, using the World Bank’s regional grouping.
Through literature searches and conversations with experts, we identified each of these sources as containing the most comprehensive and relevant information about USG and foundation philanthropic spending. Although these data represent the best publicly available information to characterize foundation and USG philanthropic spending, several limitations are important to note:
- The Foundation Center data include all grants of more than $10,000 made by the 800 largest foundations (as measured by annual giving) and a few hundred smaller foundations. The Foundation Center estimates that these grants represent roughly half of all foundation spending each year. The distribution of large grants by the largest foundations reported here may differ somewhat from that of smaller grants and foundations.
- A small but unknown fraction of the grants listed in the Foundation Center grants database are classified by the recipient organization’s sector and geographic location rather than the sector and location of the actual programming funded by the grant. Hence there is some misclassification of foundation spending.
- Whereas Foundation Center international spending data include spending in all countries outside the United States, OECD data include only USG international spending on developing countries. To maximize comparability, we have included only spending in developing countries for the presentation of foundation regional spending (MPR obtained spending data for foundations at the country level). Thus the regional presentation of spending is consistent for both USG and foundations. However, for foundation total international spending and spending by sector, we have included spending in all countries because some spending classified as occurring in developed countries actually aims to benefit developing countries (such as grants to the World Health Organization [WHO] for research on tropical diseases).
Thus, differences between foundation, USG international, and USG domestic spending reported in this memo reflect (1) differences in actual spending and (2) differences in how each data source collects information, defines and categorizes spending, and reports the information. This conflation between actual and reported spending means that although our data sources are the best available, the estimates we present imprecisely answer the research questions posed above. Despite this limitation, we are confident that the data and approaches we have used provide useful (and heretofore unavailable) contextual information.
B. Foundation Funding
The Foundation Center grants database contains all grants greater than $10,000[4] that were made by a sample of more than 1,000 independent foundations, corporate foundations, operating foundations with substantial grant-making programs, and community foundations.[5] All of the 800 largest foundations (based on annual giving) are included in the sample, as are the 10–15 largest foundations in each state and other foundations that report their spending to the FC.
Most foundation spending occurs in the domestic arena (Table B.1).[6] In 2006, 75 percent of total foundation philanthropic spending was domestic. However, the share of foundation funding devoted to the international sphere almost doubled from 2002 to 2006. This growth was due to declines in real domestic spending over the period as well as to increases in real international spending.[7]
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Category | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| International (all countries) | 1,685.9 | 13 | 2,487.6 | 21 | 3,413.8 | 25 |
| Domestic | 11,070.7 | 87 | 9,493.8 | 79 | 10,382.6 | 75 |
| Total[8] | 12,756.6 | 11,981.4 | 13,796.4 | |||
Across sectors, the largest share of international foundation spending was devoted to health, ranging from 46 percent in 2002 to a high of 63 percent in 2004 (Table B.2). Real spending on health grew by 130 percent from 2002 to 2006 (percentage not shown).
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Sector | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| Development | 420.2 | 25 | 425.9 | 17 | 798.4 | 23 |
| Education | 190.6 | 11 | 174.4 | 7 | 245.2 | 7 |
| Environment | 173.5 | 10 | 178.9 | 7 | 286.1 | 8 |
| Health | 779.7 | 46 | 1,558.1 | 63 | 1,796.4 | 53 |
| Human Services | 97.4 | 6 | 96.9 | 4 | 150.7 | 4 |
| Relief | 24.4 | 1 | 53.2 | 2 | 136.9 | 4 |
| Total | 1,685.9 | 2,487.6 | 3,413.8 | |||
Domestically, however, spending devoted to health represented only a quarter or less of foundation philanthropic spending, with education representing the largest domestic sector (Table B.3). Total real domestic spending fell by six percent from 2002 to 2006 (percentage not shown), and spending fell in all sectors except health. In contrast, spending on all international sectors increased, often substantially; development spending almost doubled between 2002 and 2006, and spending on relief more than quintupled (albeit from a low base).
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Sector | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| Development | 1,218.6 | 11 | 1,232.7 | 13 | 1,107.9 | 11 |
| Education | 4,526.5 | 41 | 3,703.1 | 39 | 4,060.9 | 39 |
| Environment | 692.5 | 6 | 550.6 | 6 | 637.4 | 6 |
| Health | 2,492.5 | 23 | 2,195.1 | 23 | 2,598.1 | 25 |
| Human Services | 1,960.4 | 18 | 1,744.9 | 18 | 1,868.5 | 18 |
| Relief | 180.3 | 2 | 67.4 | 1 | 109.8 | 1 |
| Total | 11,070.7 | 9,493.8 | 10,382.6 | |||
Foundation international spending in the developing world was heavily concentrated in sub-Saharan Africa in 2006—nearly half of all spending was in this region (Table B.4). This represents a very substantial increase—in total dollars and share of spending—from 2002. In that year, spending in sub-Saharan Africa constituted 29 percent of all spending in the developing world, slightly less than the share of spending directed to Latin America and the Caribbean (30 percent). There was a significant overall increase in international spending in developing countries (46 percent, not shown) from 2002 to 2006.
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Region | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| East Asia and the Pacific | 106.9 | 17 | 99.0 | 17 | 129.5 | 14 |
| Eastern Europe and Central Asia | 52.4 | 8 | 46.6 | 8 | 15.9 | 2 |
| Latin America and Caribbean | 195.7 | 30 | 112.0 | 19 | 163.6 | 17 |
| Middle East and North Africa | 17.7 | 3 | 15.6 | 3 | 42.4 | 4 |
| South Asia | 83.4 | 13 | 123.7 | 21 | 121.6 | 13 |
| Sub-Saharan Africa | 188.3 | 29 | 199.7 | 34 | 470.1 | 50 |
| Total | 644.4 | 596.6 | 943.1 | |||
C. USG Funding
Data on USG philanthropic spending were obtained from two different sources. For international spending in developing countries, OECD data were used. Specifically, the OECD.Stat data warehouse reports Official Development Assistance (ODA) to all low- and middle-income countries as measured by per capita Gross National Income. ODA is reported by sector and recipient country. Dollar flows include grants, commodities, services, and certain capital transactions. The most comprehensive source of USG domestic philanthropic spending is the FAADS, compiled by the U.S. Census Bureau. FAADS data are also closest in content to foundation spending as reported by the Foundation Center and to this study’s operational definition of philanthropic spending.[9] FAADS is a central repository of data on USG financial assistance provided by grants, loans, insurance, and transfer payments. We used OECD sectors and FAADS codes to classify USG spending into our six sectors.
Compared to foundation spending, USG philanthropic spending was even more weighted toward the domestic sphere (Table C.1). International spending represented just 1.5 percent of all USG philanthropic spending in 2002. However, the amount of international spending doubled by 2004 and, due to this increase and to a decline in domestic spending, represented 3.5 percent of all USG philanthropic spending in that year.
| 2002[10] | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Category | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| International | 11,854.4 | 2 | 23,946.5 | 4 | 23,157.9 | 3 |
| Domestic | 769,835.4 | 99 | 654,481.5 | 97 | 696,916.9 | 97 |
| Total | 781,689.8 | 678,428.0 | 720,074.8 | |||
Development spending received the largest share of ODA from 2002 to 2006, ranging from roughly half to two-thirds of total USG international philanthropic spending (Table C.2). Health spending followed at just under 20 percent in 2002 and 2006 but less—12 percent—in 2004. Development spending nearly tripled from 2002 to 2004, coinciding with USG reconstruction work in Iraq.
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Sector | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| Development | 5,647.6 | 48 |
15,507.2 | 65 | 11,140.2 | 48 |
| Education | 317.3 | 3 |
652.1 | 3 | 477.1 | 2 |
| Environment | 424.8 | 4 |
1,287.1 | 5 | 1,057.3 | 5 |
| Health | 2,201.1 | 19 |
2,879.8 | 12 | 4,189.6 | 18 |
| Human Services | 2,013.1 | 17 |
1,811.5 | 8 | 1,449.5 | 6 |
| Relief | 599.0 | 5 |
1,566.7 | 7 | 2,776.8 | 12 |
| Multisector | 651.5 | 5 |
242.2 | 1 | 2,067.5 | 9 |
| Total | 11,854.4 | 23,946.5 | 23,157.9 | |||
The largest amount of all USG philanthropic spending was directed toward domestic human services, at nearly $280 billion in 2006 (Table C.3).[11] Development spending represented nearly a third of USG domestic spending in all three years.
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Sector | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| Development | 251,465.1 | 33 | 200,004.1 | 31 | 222,759.7 | 32 |
| Education | 98,601.3 | 13 | 90,739.0 | 14 | 108,521.3 | 16 |
| Environment | 6,622.1 | 1 | 7,709.7 | 1 | 23,141.3 | 3 |
| Health | 54,480.0 | 7 | 42,935.0 | 7 | 41,783.1 | 6 |
| Human Services | 356,104.2 | 46 | 310,621.8 | 48 | 279,355.4 | 40 |
| Relief | 2,562.7 | 0 | 2,471.9 | 0 | 21,356.1 | 3 |
| Total | 769,835.4 | 654,481.5 | 696,916.9 | |||
In 2006, countries in the Middle East and North Africa region received the largest share of USG ODA (Table C.4). The regional distribution of ODA changed substantially toward this region from 2002 to 2004, in large part due to a significant increase in ODA to Iraq. Spending in sub-Saharan Africa was roughly equivalent to spending in the Middle East and North Africa in 2006 (32 percent compared to 33 percent, respectively).
| 2002 | 2004 | 2006 | ||||
|---|---|---|---|---|---|---|
| Region | Amount | % of Total | Amount | % of Total | Amount | % of Total |
| East Asia and the Pacific | 872.0 | 10 | 577.9 | 4 | 725.1 | 4 |
| Eastern Europe and Central Asia | 1,664.3 | 19 | 1,090.8 | 8 | 1,171.0 | 7 |
| Latin America and Caribbean | 1,332.3 | 15 | 1,911.8 | 15 | 1,921.1 | 11 |
| Middle East and North Africa | 1,627.4 | 18 | 4,698.0 | 36 | 5,711.1 | 33 |
| South Asia | 747.6 | 8 | 1,067.7 | 8 | 2,165.9 | 13 |
| Sub-Saharan Africa | 2,658.4 | 30 | 3,738.7 | 29 | 5,602.4 | 32 |
| Total[12] | 8,902.0 | 13,084.9 | 17,296.6 | |||
D. Foundation and USG Funding Priorities and Trends Compared
U.S.-based foundations and USG together provided $734 billion in philanthropic funding in 2006, at home and across the globe. To paint a clearer picture of the differences and similarities in their philanthropic agendas and priorities, we provide in this section bar charts showing the distribution of their spending across sectors and geographic regions, using the information presented in tabular form in sections B and C.
Internationally, both foundation and USG spending reflect strong priorities for health and development efforts.
As measured by the share of funding in 2006 devoted to each sector, foundations give health top priority (53 percent of spending, figure D.1), but they also focus strongly on development (23 percent). In 2006 the majority of foundation international spending on health was directed to public health (38 percent), followed by AIDS research (11 percent) and reproductive health care facilities (10 percent) (not shown).
Like foundations, USG also focused spending on health and development, although the relative order is reversed. USG devoted 48 percent of its international philanthropic spending to development and 18 percent to health (Figure D.2). Spending on relief was also important for USG, representing 12 percent of all international funding in 2006.
FIGURE D.1
DISTRIBUTION OF FOUNDATION INTERNATIONAL SPENDING BY SECTOR IN 2006
FIGURE D.2:
DISTRIBUTION OF USG INTERNATIONAL SPENDING BY SECTOR IN 2006
(IN MILLIONS 2006 $)
Sub-Saharan Africa and the Middle East receive the bulk of foundation and USG philanthropic funding, respectively.
Foundation international spending is most heavily concentrated in sub-Saharan Africa, with half of this spending focused on that region and less than five percent on the Middle East and North Africa (Figure D.3).
The USG’s engagement in the Middle East is reflected by the relatively high allocation of philanthropic spending to the Middle East and North Africa region (33 percent; Figure D.4). At 32 percent, however, USG spending in sub-Saharan Africa is roughly equivalent to spending in the Middle East and North Africa.
FIGURE D.3
DISTRIBUTION OF FOUNDATION INTERNATIONAL SPENDING BY GEOGRAPHIC REGION IN
2006 (IN MILLIONS 2006 $).
FIGURE D.4:
DISTRIBUTION OF USG INTERNATIONAL SPENDING BY GEOGRAPHIC REGION IN 2006 (IN
MILLIONS 2006$)
Priorities in domestic philanthropy differ between foundations and USG.
In 2006, foundations focused spending within the United States on education and health (Figure D.5). Together these sectors made up 64 percent of their domestic spending. In contrast, USG domestic philanthropy was heavily concentrated on human services and development (Figure D.6). Combined, these two sectors took up 72 percent of USG spending.
FIGURE D.5:
DISTRIBUTION OF FOUNDATION DOMESTIC SPENDING BY SECTOR IN 2006 (IN MILLIONS
2006 $)
FIGURE D.6:
DISTRIBUTION OF USG DOMESTIC SPENDING BY SECTOR IN FY 2006 (IN MILLIONS 2006
$)
E. Conclusions
Identifying spending patterns and trends provides insight into foundation and USG decision making by revealing where they choose to spend their limited funds. Internationally, foundations, or at least a few large foundations, have determined that the health sector and sub-Saharan Africa present the greatest opportunities for impact. USG shares these priorities, although, of course, national security considerations and political necessities have also shaped USG spending. Domestically, foundations favor the education sector, particularly spending in higher education. In contrast, almost three-fourths of USG spending occurs in human services and development.
Just as geopolitical events have significantly altered the pattern of USG international spending, overall trends in foundation spending hint at the impact of a few large foundations. Mostly due to the falling stock market and consequent drops in foundation endowments, overall foundation spending decreased from 2002 to 2004 (Table B.1), continuing a drop from 2000. Yet the decline is not evident in the international data because of the very large contribution to international spending by the Bill & Melinda Gates Foundation. Without the Gates Foundation, international giving would have decreased by four percent from 2002 to 2004 (Foundation Center Report on International Giving, 2006). The outsized impact by Gates and a few other large, often new foundations (such as Hewlett and Google) provides new opportunities for foundation-USG interaction.