U.S. Foundation Funding for Nonprofit and Philanthropic Infrastructure

2004-2015

There is a complex ecosystem of organizations working to enable, strengthen, and evolve the work of philanthropy, nonprofits, and civil society around the world. These support organizations, also known as “infrastructure organizations,” provide essential services such as: strategic planning; evaluation, assessment and feedback; board and staff development; data and research; legal services; business modeling; and support for diversity, equity, and inclusion efforts.

With support from the William and Flora Hewlett Foundation, Foundation Center developed a framework to map the composition of and support for this ecosystem of infrastructure organizations so that we can better align and improve efforts to build a better future. This study spans twelve years and analyzes 21,148 infrastructure-related grants made by 881 funders to 511 organizations over that period.

Our Taxonomy

What is the “nonprofit and philanthropic infrastructure”? At present, there is no consensus on how to define which organizations constitute “infrastructure” or precisely what kinds of services constitute “infrastructure support.” This study proposes a classification scheme that will help the field to consistently document the evolution of the nonprofit and philanthropic infrastructure over time. Infrastructure organizations can be grouped into three main categories, based on the types of audiences they serve:

The terms used in this taxonomy arise from the United States context in which there is a palpable distinction made between grantmaking (“philanthropy”) and non-grantmaking (“nonprofit”) organizations. While these categories may be less appropriate for describing the work of infrastructure organizations working in other countries, this research is nonetheless valuable for civil society organizations around the world to better understand how U.S. foundations support nonprofit and philanthropic infrastructure. We hope that this research serves as a springboard for additional iterations and analyses in the future.

PHILANTHROPY-FOCUSED ORGANIZATIONS AND ASSOCIATIONS

Philanthropy-focused organizations and associations provide services primarily in support of the work of foundations and other philanthropic entities.

The study identified 155 organizations and networks that are exclusively or primarily philanthropy-focused. These include:

  • 28 population-focused organizations and associations, such as Asian Americans and Pacific Islanders in Philanthropy, Disability Funders Network, and Women’s Funding Network;
  • 34 issue-focused organizations and associations, such as Environmental Grantmakers Association, Grantmakers in the
    Arts, and Center for Disaster Philanthropy;
  • 40 geography-focused organizations and associations, such as Council of Michigan Foundations, Philanthropy Northwest, and Southeast Council on Foundations; and
  • 53 organizations that support philanthropy in general, such as Council on Foundations, Grantmakers for Effective Organizations,
    and Exponent Philanthropy.

NONPROFIT-FOCUSED ORGANIZATIONS AND ASSOCIATIONS

Nonprofit-focused organizations and associations provide services in support of the work of nonprofit organizations or the nonprofit sector in general.

The study identified 256 organizations that perform support services for nonprofit organizations or for the social sector in general.  These include:

  • 21 information service organizations, such as GuideStar USA, Foundation Center, and Charity Navigator;
  • 86 service providers, such BoardSource, Network for Good, and Taproot Foundation; and
  • 149 associations, such as the Association of Fundraising Professionals, the Georgia Center for Nonprofits, and Independent Sector.

MULTI-SECTOR ORGANIZATIONS

Multi-sector organizations provide services in support of the work of organizations both within and beyond the social sector, such as academia, government, and business.

The study identified 100 organizations that, while not primarily focused on providing support services for the social sector, do provide a significant amount of “infrastructure” support for the field.  These organizations include:

  • 9 public policy or advocacy organizations, such as Center for Rural Strategies, Demos, and Mathematica Policy Research;
  • 9 independent research centers, such as the Urban Institute (which houses the Center on Nonprofits and Philanthropy), the Hudson Institute (publisher of The Index of Global Philanthropy and Remittances), and the Aspen Institute (which houses the Program on Philanthropy and Social Innovation);
  • 34 consulting and advisory organizations, such as FSG, Bridgespan Group, and Synergos Institute; and
  • 48 academic research centers, such as Duke University (which houses the Center for Strategic Philanthropy and Civil Society), Indiana University–Purdue University Indianapolis (which houses the Lilly Family School of Philanthropy), and Grand Valley State University (which houses the Dorothy A. Johnson Center for Philanthropy).

Our Key Findings

(All span 2004-2015 unless otherwise noted.)

Total Giving Across 12 Years

$0

IN SUPPORT OF

0 organizations

U.S. foundations made an average of $162 million in grants per year to support nonprofit and philanthropic infrastructure.

Small Share of Total Giving

Funding for infrastructure accounted for less than 1 percent of total giving by U.S. foundations. The overall share of giving for infrastructure declined from 0.86 percent of total giving in 2004 to 0.59 percent in 2015.

U.S.-focused Funding

The vast majority of infrastructure funding went to U.S.-based organizations, while infrastructure organizations outside of the U.S. received a total of $68.6 million (3.5 percent) from U.S. foundations.

Slow Growth

OVERALL GIVING

66%

INFRASTRUCTURE GIVING

25%

While overall giving by U.S. foundations grew 66 percent from 2004 to 2015, infrastructure-related giving grew just 25 percent.

Adjusted for inflation, infrastructure funding has basically been flat since 2006 (measured in 2015 dollars).

Nonprofit-Focused Organizations Received the Most Funding and Experienced the Most Growth

TOTAL INFRASTRUCTURE FUNDING

$1.94 B

NONPROFIT-FOCUSED ORGANIZATIONS

$845 M (44 %)

PHILANTHROPY-FOCUSED ORGANIZATIONS

$740 M (38 %)

MULTI-SECTOR ORGANIZATIONS

$355 M (18 %)

Nonprofit-focused organizations received an average of $70.4 million per year.
Philanthropy-focused organizations received an average of $61.7 million per year.
Multi-sector organizations received average of $29.6 million per year.

NONPROFIT- FOCUSED ORGANIZATIONS

46%

PHILANTHROPY- FOCUSED ORGANIZATIONS

15%

MULTI-SECTOR ORGANIZATIONS

-2%

Most of the growth in infrastructure funding was due to increased levels of funding for nonprofit-focused organizations, which grew from an average of $61 million per year (2004-06) to $88 million per year (2013-15).

Adjusted for inflation, funding for nonprofit-focused organizations grew by just 20 percent, philanthropy-focused organizations declined by 6 percent, and funding for multi-sector organizations declined by almost 20 percent (measured in 2015 dollars).

Strong Support for Nonprofit Service Organizations

0%

Nonprofit service organizations—that provide management and administrative support to nonprofit organizations and projects—was one of only two infrastructure sub-categories that grew faster than overall foundation giving. Just one other infrastructure subcategory, issue-focused membership associations, increased at a rate that outpaced foundation giving in general during this period (+122 percent).

Adjusted for inflation, funding for nonprofit service organizations grew 48 percent (measured in 2015 dollars).

Higher Than Average General Support

AS A PERCENTAGE OF TOTAL GIVING FOR INFRASTRUCTURE ORGANIZATIONS

AS A PERCENTAGE OF OVERALL FOUDATION GIVING

As a percentage of total giving for infrastructure organizations, general support averaged 27.5 percent between 2004 and 2015. By comparison, general support for foundation giving overall was 18.5 percent.

Number of Funders and Recipients Fluctuated Year to Year

NO. OF FUNDERS
NO. OF RECIPIENTS

While the number of funders supporting infrastructure rose slightly from 424 to 430 from 2011 to 2015, the number of recipients declined from 328 to 287 during the same time period suggesting a narrower distribution of support for this ecosystem.

Support is Concentrated Among the Top Recipients of Infrastructure Funding

The top 10 recipients received 26 percent of all infrastructure funding.

For purposes of this research, all grants (of any kind) were included in the totals for philanthropy-focused and nonprofit-focused infrastructure organizations. In some cases, e.g., Hispanics in Philanthropy, Women’s Funding Network, and others, it is certain that some grants intended for regranting have been included in their totals. This means that the total support indicated for these organizations likely overstates the amount of support they received strictly for “infrastructure” purposes, but we don’t know by how much. It was beyond the scope of this study to attempt to exclude such “pass-through” grants from our analyses, as it would have required detailed grant-by-grant review of thousands of grants. In future iterations of this research we hope to be able to provide more nuanced results.

Foundation Center, Bridgespan Group, Independent Sector, and Council on Foundations each averaged more than $5 million in funding per year.

For more data on the top recipients of infrastructure funding, download the full report.

Giving is Concentrated Among a Relatively Small Group of Funders

The top 10 foundations accounted for 42 percent of all infrastructure funding. Three funders—Ford Foundation, W.K. Kellogg Foundation, and the Bill & Melinda Gates Foundation—accounted for 24 percent of all infrastructure funding over this period. For more data on the top infrastructure funders, download the full report.

Resources from the Field

Civil society organizations (including foundations) are working to make our world a better place, and the infrastructure that supports this work exists to continuously
improve and strengthen their efforts. We hope that this analysis is useful for understanding the funding context within which funders and infrastructure organizations operate, and that it will inform the funding practices surrounding infrastructure organizations going forward.

Looking for further research on how we can build strong support systems for civil society? Check out these resources below.

About the Data

This report analyzes 21,148 infrastructure-related grants made by 881 foundations to 511 organizations based in 30 different countries, totaling $1.94 billion. The data used in this analysis come from Foundation Center’s annual FC 1000 research data set, which includes all grants of $10,000 or more made by 1,000 of the largest U.S. private and community foundations. Giving by these foundations together accounts for more than half of overall U.S. foundation giving each year. In this data set, grant amounts are generally reflected in full in the year the grants were issued, regardless of the grant duration or payment schedule.

This analysis includes all grants made to any exclusively nonprofit or philanthropy-focused infrastructure organization that received at least one grant (of at least $10,000) between 2004 and 2015. In certain cases, some grants intended for regranting may have been included in an organization’s totals (e.g., Hispanics in Philanthropy).

Grants made to organizations not exclusively focused on the social sector are only included in this analysis if they are “infrastructure-related.” To keep the analysis from being cluttered with hundreds of sparsely supported organizations that are not what the field typically thinks of as belonging to the social sector “infrastructure,” any multi-sector infrastructure organizations that did not receive at least $500,000 in funding in the past 10 years (or an average of at least $50,000 per year) have been excluded.

See Appendix A in the report for a full description of the research methodology. If you have further questions about this research, please reach out to us at communications@foundationcenter.org.