NCFP Launches Trends 2020 Report
Giving families have historically turned to each other for advice about family philanthropy. NCFP translated these stories into data by producing the first statistically-significant benchmarking study of national family foundations, Trends 2015. The study’s findings have helped families navigate the sector for the last five years—highlighting what their peers are doing and why.
NCFP is now proud to present the first major follow-up to the original Trends study: Trends 2020 explores emerging trends in the field and compares the findings to those from 2015. Over five years, the family philanthropy field has shifted toward issue-based giving, non-family engagement, and external communication. Notably, 70% of family foundations have been formed in the last 30 years. Interpreting the behavior of newer foundations will be key to understanding the future of family philanthropy.
Here are some of the key findings from Trends 2020:
The amount being given has increased, and money is being managed in different ways.
- Foundations are making fewer grants, but giving out more money overall (indicating larger grants).
- 66% of foundations pay out more than 5% of corpus each year; 13% give 6-8%; 23% give more than 8% or are pass-through foundations.
- More than half provide general operating (69%) or multi-year (61%) support and nearly half provide capacity-building grants (47%).
- Percentage of family foundations offering discretionary grants has decreased since 2015 – from 86% to 64%
- The number of family foundations engaged in mission/impact investing has doubled since 2015.
Family foundation grantmaking is becoming more issue-based.
- 81% of foundations established prior to 1970 are geographically focused.
- In contrast, 82% of foundations founded since 2010 are issue-focused.
Founding donors are involved than ever before.
- 56% have a founder participating in the foundation’s giving.
- This a remarkable shift. In the past, family foundations were formed primarily as part of an estate plan.
Families are engaging their communities more intentionally.
- Two-thirds of family foundation boards include non-family board members.
- The number and percentage of non-family board members as a percentage of family foundation boards has grown significantly over the past five years. In 2015, 23% of respondents reported two or more non-family board members. In 2020, 26% of all family foundations have 3-5 non-family and an additional 10% have six or more non-family.
- Additionally, foundations formed since 2010 are significantly more likely than others to have at least three non-family board members.
- 71% say they use at least one tool or channel to communicate externally.
Families who agree that their foundation’s internal operations and impact are effective share characteristics that may point to what constitutes a particularly effective family foundation:
- More likely to have written governance policies and to dedicate a significant amount of time to governance
- Much less likely to use discretionary grants
- Much more likely to have non-family board members
- Much less likely to report any challenges regarding intergenerational dynamics.
As families wrestle with challenges in their foundations and how best to use their capital to have an impact, Trends 2020 can serve as both a starting point and a roadmap for important family discussions. You can find and download the complete Trends 2020 report.