Education & Workforce Development and Philanthropy

Education causes attract state foundations' support: Rate of giving outpaces national average 2-to-1

September 29, 2008

Nearly half the money Indiana foundations gave away in 2005 went to educational organizations-more than twice the rate of such giving nationally, according to a new study from Indiana University's Center on Philanthropy.

All told, the state's independent, corporate and community foundations awarded $450 million in grants to support education, 47 percent of the $965 million total. Nationally, about 23 percent of foundation giving goes to education.

"My intuition tells me ... foundations are making education a priority as the state tries to fight the brain drain and build the labor force of the future," said Patrick M. Rooney, interim director at the locally based Center on Philanthropy. "It shows some wisdom on [their part] to say, 'We're going to invest in our future and make this a better place to live.'"

Among the most ardent education supporters: Indianapolis' own Lilly Endowment Inc., which gave $21.4 million to education in 2005, and Lumina Foundation for Education, which handed out more than $32.6 million to such causes.

As the name implies, education is part of Lumina's mission. Formed with proceeds from the 2000 sale of student-loan guarantor USA Group, the foundation controls resources worth more than $1.3 billion.

Education also is one of Lilly Endowment's three priorities, along with religion and community development. The endowment, which gave away $427.5 million in 2005, is among the nation's wealthiest foundations with $7.3 billion in assets.

But many other Indiana foundations also joined in the education chorus-to the tune of $396.1 million.

"To some extent, it is a reflection of the need," said local fund-raising consultant David Sternberg. "And if foundations are able to focus on education in ways that individuals cannot, then individual giving could center on other things, like human services."

In fact, individual donors collectively contribute much more to charity than foundations and corporations combined. Center researchers are still crunching more recent numbers, but their Indiana Gives 2004 report estimated that individuals represent about 77 percent of all charitable giving in the state; foundations made up about 14 percent.

But foundations' flood of support for education in 2005 slowed the flow elsewhere. In Indiana's case, it came at the expense of health causes, which got just 8 percent of foundations' grant money compared with 23 percent nationally.

Will foundations ramp up giving to health causes as a result? Not necessarily. Executives aren't likely to make funding decisions without more data, said Indiana Grantmakers Alliance CEO Marissa Manlove.

"It is just part of the equation," she said.

Although foundations occasionally reassess their priorities, "things don't move quickly," said Beth Casselman, executive director of the locally based Clowes Fund.

Indianapolis-based IGA paid $25,000 to sponsor the new study, which also broke down foundation giving in eight Indiana regions. It found central Indiana's three regions have less than half of the state's foundations, but give away more than 80 percent of all grant money-again due in large part to Lilly Endowment.

The endowment's influence is obvious in another finding, too: the disproportionate impact of community foundations. In five of the regions studied, community foundations were responsible for 20 percent or more of all foundation giving, nearly twice the national average.

Each of Indiana's 92 counties is served by a community foundation or an affiliated fund, most the result of Lilly Endowment's $423 million Giving Indiana Funds for Tomorrow initiative, launched in 1990.

"We provided a mix of incentives to get them going," said endowment spokeswoman Gretchen Wolfram. "And they're really doing great work out there."

Because of their local focus, community foundations can respond to needs as they arise without appealing to far-off funders.

"If they weren't out there, an awful lot of these [needs] conversations wouldn't be happening," said Fishers-based not-forprofit adviser Bryan Orander.
Source: XMLAr00500.xml
ADVERTISEMENT

Recent Articles by Andrea Muirragui

Comments powered by Disqus