California Foundations Rebound from Losses, Philanthropic Giving Grows.

But Foundation Capacity and Giving Decline in Los Angeles Region

LOS ANGELES -- Weathering economic downturns earlier this decade, the fortunes of California foundations have rebounded, nearly restoring assets and exceeding giving levels found at high watermark levels in the year 2000, according to a new report by the Center on Philanthropy and Public Policy at the University of Southern California.

The report, California Foundations 2004: Trends and Patterns, finds that California has added more than 2,000 more new foundations since 1999, foundation assets have grown to $77.4 billion, an increase of 13 percent, and California foundations made grants totaling $1.4 billion in 2004, an increase of 40 percent since 1999. (When adjusted for inflation, assets declined by 2 percent and giving increased by 21 percent.)

"While our earlier analysis found the foundation sector suffered declines in the early years of the decade, foundation fortunes have rebounded and giving is beginning to pick up its pace," said James M. Ferris, Director of the Center on Philanthropy and Public Policy at USC. "The foundation sector is strong and vibrant and the prospects for the future are bright."

In addition to measuring the growth of foundations in California, the new report also offers analysis of the structure of the California foundation sector and changing patterns in its capacity and grant making. Key findings include:

* Foundation assets in California remain highly concentrated, with 35 foundations with assets of $250 million or more accounting for 63 percent of foundation assets and 47.5 percent of giving.

* Foundation capacity continues to be concentrated in the Bay Area and the Los Angeles area. Sixty-eight percent of the foundations and 89 percent of foundation assets are located in these regions.

* The reach of foundation giving remains highly concentrated. Grant recipients in the Bay Area and Los Angeles regions received almost 77 percent of the 1.4 billion in 2004 grant dollars.

The report also reveals potentially troubling findings in grantmaking patterns. The state's share of grants from California foundations is declining. In 2004, 64 percent of grants were from California foundations, a decline of 6 percent since 1999. In Los Angeles, the capacity of foundations declined by three percent (from 37% to 34% of foundations), and giving declined by seven percent (from 38% to 31%).

"The regional- and county-level analyses featured in this study provide the perfect complement to the Foundation Center's new California Foundations report, which looks broadly at changes in resources and giving priorities among California foundations since the late 1990s," said Steven Lawrence, director of research at the Foundation Center. "Together these reports provide the most detailed picture available of the state's foundation community."

California Foundations 2004: Trends and Patterns was developed in cooperation with The Foundation Center and funded by The California Endowment, The James Irvine Foundation and The David and Lucile Packard Foundation. A summary of the report is available at www.usc.edu/philanthropy. The report is being release simultaneously with The Foundation Center's California Foundations: An Update on the State's Grantmaking Community.