Maximizing the Value of Philanthropic Efforts through Planned Partnerships between the U.S. Government and Private Foundations. 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.

 


Endnotes

[1] Giving USA estimates 2006 individual giving using adjusted data from five sources: data on itemized charitable deductions from the Internal Revenue Service (IRS), survey data on giving by individuals that do not itemize their deductions, information from large disaster relief organizations, press reports of large donations, and estimates of individual charitable bequests. Given the limitations that result from sampling and estimating changes over time, Giving USA numbers should be viewed as approximate. As the foundation and USG spending estimates in this Appendix only include health and social services spending, MPR sought to isolate individual giving in those areas. This was done by subtracting estimated individual giving to religion ($96 billion), arts & culture ($8 billion), and foundations ($30 billion) from total individual giving.
[2] The United States Agency for International Development Greenbook also presents information on USG philanthropic spending. However, the OECD Official Development Aid (ODA) data are more appropriate for the study because they classify spending by purpose, enabling a classification by sector. As the Greenbook website reports, The only authoritative source for U.S. government assistance by purpose is the OECD Development Assistance Committee (DAC) Development Database on Aid from DAC Members. http://qesdb.usaid.gov/gbk/faq.html [accessed October 12, 2008].
[3] For foundations, development spending includes spending on community development, economic development, agricultural development, civil society development, and so on. For USG, development includes spending on government and civil society, social infrastructure and services, and economic infrastructure, including transportation, agriculture, forestry and fishing, industry, mining, and so on.
[4] The FC grants database does include some grants with awards between $1,000 and $10,000. Typically these are grants that the FC has identified through a project or grants that are attached to a grants list filed electronically by the largest foundations.
[5] Roughly three-quarters of the foundations in the sample are independent foundations. The database does not include spending by public charities. Unlike foundations, public charities typically raise funds from multiple sources (including foundations), often provide services, and may receive revenues for services provided. Some well-known public charities include the Clinton Foundation and the Ashoka Foundation.

[6] All presented foundation and USG spending is programmatic and excludes operational spending.

[7] All dollar amounts presented in this memo have been adjusted for inflation using the most widely used measure of inflation, the Consumer Price Index for All Urban Consumers (CPI-U).
[8] These amounts only include grants in the Foundation Center grants database.
[9] Ideally, each federal assistance program would be analyzed to determine the appropriate sector. We used a more efficient classification method that incorporated 176 functional subcategories determined by USG agencies. Two MPR researchers independently examined each subcategory and determined the most appropriate sector. Some codes were in multiple functional subcategories; these codes were individually evaluated and assigned to the most appropriate sector.
[10] This is the calendar year for international spending and the USG fiscal year for domestic spending.
[11] We excluded from the analysis three major entitlement programs: Social Security, Medicare, and Medicaid. These programs do not fit well within the rubric of initiatives. If included, these entitlements combined would approximately double total USG domestic philanthropic spending. Human services and health would then represent 47 and 33 percent of domestic spending, respectively, and development would constitute 12 percent of total USG domestic philanthropic spending in 2006.
[12] This total is smaller than the overall total for USG international spending because some spending (roughly $5.7 billion) is not identified by recipient country (unspecified bilateral or not reported).

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