Education Funding

Philanthropy Update

April 09, 2003 5 min read
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Despite Poor Stock Market Returns, Charitable Giving Found to Keep Pace

Even though the economy was sputtering and investments in the stock market performed poorly, foundations were able to keep their giving rates relatively stable in 2002, according a report released last week.

Foundations’ assets decreased by nearly 4 percent in 2001, the survey found. Still, giving by the nation’s nearly 62,000 grantmaking foundations decreased by a total of only $2 million, to $30.3 billion, in 2002, according to the Foundation Center. The New York City-based organization tracks philanthropic efforts in the United States.

The Foundation Center posts both of the reports: “Foundation Growth and Giving Estimates: 2002 Preview” and “Foundation Giving Trends: Update on Funding Priorities.” (Require Adobe’s Acrobat Reader.)

“Foundations said that for 2002, ‘We are really going to try to hold the line, even though our assets have shrunk,’” said Loren Renz, the vice president for research for the Foundation Center.

While giving remained relatively stable, the 0.07 percent decrease was “the first decline in giving reported since 1983, and followed six consecutive years of double-digit growth in grant dollars,” the report says.

The situation will be worse this year, the center predicts.

“Three straight years of stock market declines, a yearlong recession, a sluggish economy,” and an estimated 10 percent to 12 percent decrease in the value of foundations’ assets will result in a reduction in giving of 1 percent to 10 percent in 2003, the report estimates.

Meanwhile, giving to education increased by 18.9 percent in 2001, to a total of $4.5 billion, according to a report the Foundation Center released in February.

That increase can be attributed to a few large grants, Ms. Renz said.

For example, the William and Flora Hewlett Foundation gave $400 million to Stanford University—the largest grant on record for any purpose—to support the school’s endowment, graduate fellowships, and undergraduate fellowships and programs.

Education received 27 grants worth $10 million or more in 2001, the report says, with the majority of grantmaking dollars going to higher education.

Still, K-12 education received $1.4 billion in grants, a 1.7 percent increase in giving from levels reported in 2000.

The figures in “Foundation Growth and Giving Estimates: 2002 Preview” and “Foundation Giving Trends: Update on Funding Priorities” were based on a representative sample of 1,000 foundations.

Early-College High Schools

The Bill & Melinda Gates Foundation awarded a $9 million grant last week to the Foundation for the California Community Colleges to establish 15 early-college high schools throughout the state.

“The early-college initiative seeks to bring college to the student by creating an accelerated, accessible, supporting environment,” Tom Vander Ark, the executive director of education for the Gates Foundation, said during a conference call announcing the grant.

Early-college high schools are often located on community college campuses, and are designed so that secondary school students can take college-level courses and earn college credits or associate’s degrees while they are completing high school.

Last year, the Gates Foundation awarded eight organizations a total of $40.4 million to create 70 such schools in different parts of the country. (‘Early College’ High Schools Get Funding Boost,” March 27, 2002.)

“This work builds on our prior investment and expands the size of our national effort to create this new pathway to college for disadvantaged and minority students,” Mr. Vander Ark said.

Those are exactly the kinds of students who currently attend community colleges in California, said Thomas J. Nussbaum, the chancellor of the California Community College system.

The California community colleges’ foundation will administer the grant money, which will be awarded to 15 community colleges over five years.

The first early-college high schools in California could open as soon as September 2004, according to Deborah Wilds, a program officer for the Gates Foundation, which is based in Seattle.

Aid for Tulsa Schools

Generous donors in Oklahoma have accomplished in less than four months what they were given a year to do: give $1 million to the Tulsa public schools.

Last fall, the 43,000-student district learned that because of state revenue shortfalls, it would receive less state money and would need to cut $17 million from its $250 million budget.

In November, local philanthropist Henry Zarrow pledged to meet all contributions to the district, dollar for dollar, up to $1 million. But contributions had to be made before Nov. 30, 2003.

On March 25, that challenge was met. “We’re incredibly grateful,” said Rachel Maze, the executive director of the Foundation for Tulsa Schools.

The Zarrow challenge grant rallied the community behind the Tulsa district and spread the word that the schools were financially strapped, Ms. Maze said. “It made a point to the public of just how dire circumstances are.”

Roughly 1,500 corporations, individuals, and groups donated money to the schools, in amounts as small as $1 and as large as $400,000, according to Ms. Maze.

She expects the giving continue, she added, but to slow down now that the grant’s challenge has been met.

Youth Partnership Award

The William T. Grant Foundation has awarded its first Youth Development Prize to the University-Assisted Community School Program in Philadelphia.

Officials of the New York City-based philanthropy say they established the $100,000 award to recognize partnerships that use scientific research in their work to help young people succeed.

The National Academies’ Board on Children, Youth, and Families put together a selection committee and determined the winner. The National Academies is a Washington-based research organization that provides science, engineering, and medical advice to the federal government.

The winning program is a joint effort of the University of Pennsylvania’s center for community partnerships, the western region of the Philadelphia school district, and the West Philadelphia Partnership, which is made up of community organizations.

The program drew on research in its effort to use parent education to reduce children’s exposure to lead paint and in setting up a reading program to address literacy problems in the area’s African-American community.

—Michelle Galley

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