U.S. foundations gave at record levels

SEATTLE – U.S. charitable foundations gave money away to international causes at record levels in 2007, and a new report says their contributions are likely to go up again this year.

The Bill & Melinda Gates Foundation accounted for more than half the increase in foundation giving to international causes between 2002 and 2006, said the report, which is the fourth in a series of historical snapshots since 1990.

The report released Thursday by the New York-based Foundation Center says international giving by U.S. foundations totaled about $5.4 billion in 2007.

International giving by all foundations rose by more than 50 percent between 2002 and 2006, but the Gates Foundation’s increase was closer to 400 percent: from $525.8 million in 2002 to $2 billion in 2006.

Despite being the nation’s largest foundation, the Gates is not the beginning or the end of the story, Foundation Center President Brad Smith said.

“The continued growth of international grant making by U.S. foundations is not just a product of the Gates Foundation,” he said.

Excluding the Seattle-based foundation from the sample, international charity still grew faster than all foundation giving during the period of the study.

International causes benefited from increased funding by new foundations, more international giving by foundations with growing endowments, and foundation response to natural and humanitarian disasters around the world.

The Foundation Center and its study partner, the Washington, D.C.-based Council on Foundations, decided to pull the Gates Foundation dollars out of the equation this time around.

After similar data was gathered in 2002, some dismissed the results and told the two entities that the information they found was entirely due to the Gates Foundation. They wanted to avoid that argument this time around, said Rob Buchanan, managing director of international programs for the Council on Foundations.

For example, the biggest concentration of international giving by U.S. foundations goes to health-related causes – the Gates Foundation’s No. 1 grantmaking priority.

If you pull Gates out of the equation, the top international priority of all other U.S. foundations is global development, followed by the environment and health.

Probably not coincidentally, international development – focusing on subjects like agriculture and community building – is a major new grant area for the Gates Foundation.

“The study will show that it’s not just about the Gates Foundation … but I would be the last person to say Gates is not a huge factor,” Buchanan said.

Foundation support for U.S.-based international programs targeted Sub-Saharan Africa, with support for this region growing from $94.8 million in 2002 to $518.7 million in 2006, mostly because of large health initiatives of the Gates Foundation.

Asked about the economic downturn, only 7 percent of the charitable foundations that responded said they expected to reduce their international support in 2008, while close to half said they expected to increase giving.

The Gates Foundation has said it would continue to increase its giving, but not as fast as it previously thought it would.