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Recession affects charitable giving in Minnesota

The Minnesota Council on Foundations (MCF) recently released its “Giving in Minnesota, 2011 Edition” research report, a comprehensive analysis of charitable giving in the state. The report demonstrated that giving by individuals, foundations, and corporate giving programs totaled $4.9 billion for the 2009 research year, a decrease of 9.3 percent from 2008.

Individual giving in Minnesota declined 11.3 percent from 2008 to 2009, to $3.6 billion. The majority of the state’s charitable giving — 72 percent in 2009 — came from individuals. Foundation and corporate grantmaking accounted for 28 percent — or $1.37 billion — in 2009, a decrease of 3.6 percent from 2008.

“People were hit hard by the 2008-2009 recession, so it’s understandable that giving by individuals was down most significantly,” says Bill King, MCF president. “Foundations and corporate givers made a strong effort to hold the line, and their grantmaking only dropped by a few percentage points.”

Individual giving in Minnesota declined 11.3 percent from 2008 to 2009, to $3.6 billion.

The 2009 research year, the most recent time period for which complete data are available, includes financial information from foundations and corporate giving programs with fiscal years ending between June 1, 2009, and May 31, 2010.

In recovery

Minnesota foundation assets increased six percent to $18.33 billion in 2009 from $17.3 billion in 2008. But, the asset decline of 10.7 percent from 2007 to 2008 — the largest single-year decline since 1995 — remained a factor in 2009’s decrease in giving.

“The increase in foundation assets is good news, but it will take time and a more stable economy before giving levels catch up,” says King. “Foundations typically base grantmaking on a one- to three-year average of past asset performance, so 2008’s decrease may continue to have a negative impact for another year or so.”

Corporate foundations and giving programs, which comprise just nine percent of the 1,470 grantmakers in the state, accounted for 46 percent of all grant dollars in 2009. Private foundations, the vast majority (85 percent) of Minnesota’s grantmakers, gave 42 percent of the grant dollars paid. The smallest portion of the state’s grantmakers, community/ public foundations, accounted for 12 percent of the total grant dollars.

The challenge for charitable organizations

As in previous years, the three subject areas receiving the largest shares of Minnesota’s grant dollars were education, human services, and public affairs/society benefit, at 26 percent, 23 percent, and 18 percent, respectively. In 2009, education displaced human services as the subject category receiving the largest share. Education has captured the largest share of Minnesota’s grant dollars in all but three years — 2001, 2005 and 2008 — since MCF began conducting “Giving in Minnesota” studies in 1976.

The subject area information is based on an analysis of grants of $2,000 or more made by a sample of 100 of Minnesota’s top grantmakers, These grants represent about two thirds of the state’s philanthropic giving for the year.

Overall, grantmaking by the sample declined four percent from 2008 to 2009. Giving to six of eight subject areas decreased. Funding for the public affairs/society benefit category grew, while grant dollars for education remained flat.

Based on available data, just over half of the sample’s grants could be coded to a specific beneficiary group. Of those, the largest share of dollars — 22.2 percent — went to organizations that serve children and youth, which is similar to past years.

MCF conducts the “Giving in Minnesota” research annually to examine long-term trends in charitable giving. For the “Giving in Minnesota, 2011 Edition” summary and complete report, see www.mcf.org/research/giving.

The Minnesota Council on Foundations, a regional association of grantmakers, works actively to strengthen and expand philanthropy. MCF members represent three-quarters of all grantmaking in the state, awarding more than $900 million to nonprofits annually. Members include family and private independent foundations, community and other public foundations, and corporate foundations and giving programs. For more information, visit www.mcf.org.

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