What are grant foundation predictions for 2020? This is a question that every organization who wants private foundation money should be asking. What does the crystal ball look like for foundation grants in 2020?
The difficult part about foundation grants is that all of the data we have on foundation giving is often 18 to 24 months old. Foundations file their IRS Form 990 that outlines their contributions months after the end of their fiscal year. That is then the primary document we have for research for a whole additional year. It is very hard to predict what a foundation might give with data that is up to two years old. A lot can change in two years!
“Crystal ball” of foundation funding predictions is actually a window into the past year’s stock market returns. Why? Because foundation philanthropic giving is based on the foundation’s prior year investment returns. The amount that foundations are required to give by the IRS do have some complexities. Generally, however, foundations must spend 5% of their returns on “charitable purposes”. Because of this, we can use the previous year’s stock market returns to predict, in general, if national giving from foundations will be up or down for the year.
Here’s a look at both the Dow Jones and S&P returns per year and year closing price for the recent past.
The market in 2018 was down. While we won’t have data on foundation philanthropic giving for 2019 for many more months, it did feel like foundations tightened the philanthropic belt in 2019. They tightened their eligibility requirements. They required more intensive applications. They released fewer funding opportunities or gave awards to fewer organizations for those funding opportunities.
Fortunately, 2019 had strong stock market returns. Based on this, foundation predictions for 2020 are that this will be a good year. This is the year to take advantage and submit more applications!