Wisconsin Stateof Philanthropy Report 2009 by DFW

Wisconsin State of Philanthropy Report 2009

table of contents State of Philanthropy . . . . . . . . . . . . . . . . . . . . . . . . .2 Key Findings About Philanthropy in Wisconsin D A Community of Giving . . . . . . . . . . . . . . . . . . . . . .4 onors Forum of Wisconsin is proud to present this Top Ten Foundations premiere report on Wisconsin giving. The Wisconsin Foundation Giving State of Philanthropy Report was based upon data Individual Giving gathered from the Funding Information Center at Marquette Other Grantmaking Types University, as well as the results of a survey of Wisconsin Regional Philanthropy grantmakers conducted by the Donors Forum of Wisconsin. The State of Philanthropy Report includes a detailed look at The Changing Economy . . . . . . . . . . . . . . . . . . . . 14 grantmaking in Wisconsin. The first local publication of its kind, Economic Impact this report not only includes totals for giving in Wisconsin, but Projected Grantmaking Budgets includes a deeper look into how philanthropy in Wisconsin is Impact on the Nonprofit Sector practiced. Where The Dollars Go . . . . . . . . . . . . . . . . . . . . . . 18 Our vision for this research report was to create a dynamic, Types of Support frequently updated knowledge base of current and detailed information on Wisconsin’s foundations. Through this research Program Areas we have created a report that strengthens Wisconsin grantmakers’ Focus on Health abilities to tell their giving stories, highlights the impact of Focus on Education Wisconsin’s grantmaking community, and accurately depicts the scope, diversity, and depth of Wisconsin philanthropy. Insider’s Guide to Foundations . . . . . . . . . . . . . . 22 Inside the Organization Managing Mission Challenges Facing the Philanthropic Sector Philanthropic Successes References and Resources . . . . . . . . . . . . . . . . . . . 28 About the Report

State of PhilanthroPy Key Findings Charitable ContributionS Total giving in Wisconsin has increased each year since 2004, resulting in record- setting total giving amounts in 2006. $3 .51 billion 10 percent $3 .02 billion 12 percent given in Wisconsin increase in total given by individuals in increase in giving by charitable giving Wisconsin individuals in Wisconsin foundation faCtS Wisconsin foundation giving has increased every year since 2002, increasing by an average of 4.7 percent each year. Assets have been increasing even faster, by an average of 5.7 percent each year through 2007. 1,290 $7 .25 billion 7 percent $497 million Wisconsin foundations Wisconsin foundation increase in assets Wisconsin foundation assets grantmaking | Wisconsin State of Philanthropy 2009 2

State of PhilanthroPy About Philanthropy in Wisconsin Total Wisconsin Foundation Assets and Grants Paid By Year Foundation assets and grants have been increasing each year; assets by an average of 5.7 percent and grants by an average of 4.7 percent. Amount show in millions. 8,000 $7,254 $6,241 6,000 $5,549 $5,254 $4,772 4,000 2,000 Assets $387 $395 $454 $479 $497 0 Grants Paid 2003 2004 2005 2006 2007 Source: Foundation Information Center, DFW 2008 T he philanthropic sector in Wisconsin includes diverse vehicles for making all foundations and operating foundations. Since 1978, an increasing proportion of sorts of donations to nonprofit organizations. Individuals, families, charitable giving in the U.S. is carried out through foundations, increasing from 5.5 percent to organizations, charitable funds and corporations work together to provide 11.6 percent of total giving, according to Giving USA. Foundations are unique in that donations of grant dollars, volunteer service, board service, technical assistance andthey have several tax advantages over individual giving, but also have strict reporting in-kind donations of products and services. Among the different types of philan- and payout requirements.. thropic organizations are corporate giving programs, donor advised funds, supporting Wisconsin is home to nearly 1,300 private foundations, a number that has been organizations, federated funds, charitable trusts, and private, community, corporate, steadily increasing since 2000, by an average of 2.3 percent each year. In 2007 there and operating foundations. was a 3.2 percent increase in the number of foundations. Foundation assets and individual GivinG grants have been increasing each year; assets by an average of 5.7 percent per year Individual giving accounts for the vast majority of giving in the U.S. and for more and grants by an average of 4.7 percent per year. than 80 percent of giving in Wisconsin. In 2006, more than 80 percent of charitable In 2007, Wisconsin foundations had combined assets of over $7.25 billion, and broke dollars in Wisconsin came from individuals, totaling over $3 billion. Individuals can their previous record for charitable giving, contributing nearly $500 million to chari- | Wisconsin State of Philanthropy 2009 make donations to organizations simply by making a contribution to an organization table organizations around the globe. they support. Individuals can also participate in fundraisers, pay membership dues The majority of foundations in Wisconsin have less than $1 million in assets. In 2006, to museums, houses of worship or other nonprofits and institutions, or make dona- 65 percent of foundations had less than $1 million in assets and in 2007 that number tions of household goods. Many individuals also donate their time and expertise by dropped slightly to 57 percent. The median asset level for Wisconsin foundations serving as volunteers or on boards of nonprofit organizations. was $685,427 in 2007. foundation GivinG Nearly all foundations grant less than $1 million annually. In 2007, only 8 percent of Over the past several years foundations have been increasing in number and influence foundations gave out more than $1 million in grants, up from 6 percent in 2006. The across the country. Foundations, charitable organizations that make grants to non- median grant amount paid out by Wisconsin foundations in 2007 was $50,000. profit organizations, include private foundations, community foundations, corporate 3

a Community of GivinG Top Ten Foundations T here are many ways to make charitable contributions, and Wisconsin residents use many tools to make donations. Effective philanthropy can take numerous forms, including: private foundations, corporate foundations, and giving programs; community foundations; individual giving; grantmaking public charities; operating foundations. Each of these types of giving are described in detail in this Foundation Assets and Grants by Type, 2008 section. Amounts are shown in millions. Though most of the philanthropic giving in Wisconsin comes from individuals, founda- 6,000 $5,068 tion giving in Wisconsin is significant in scope. More than 85 percent of foundations in Wisconsin are private foundations, and private foundations hold more than two- 4,000 thirds of the foundation assets in the state. However, several of the top givers and asset holders in Wisconsin are corporate and community foundations. 2,000 WiSConSin’S larGeSt foundationS $1,342 $806 Foundation assets are heavily concentrated in the state’s largest foundations. The top $332 Assets $71 $92 ten foundations by assets hold 39 percent of all foundation assets in the state. The top 0 Grants Paid Community Corporate Family & Independent 50 foundations by assets account for over two-thirds of the foundation assets, meaning that the top 4 percent of foundations hold over 66 percent of the foundation assets. Source: Funding Information Center, DFW 2008 Many Wisconsin foundations calculate grantmaking budgets that are not determined solely by their assets, which accounts for some discrepancies between the 10 Wisconsin foundations with the greatest assets and the 10 with the most grantmaking by dollar amount. Some foundations make grants based upon on an average of assets over a period of years. This approach is meant to preserve stability in grantmaking, so that changes in the market or in major gifts (to or from the foundation) do not drastically Aggregate Data for Foundations by Type, 2008 affect year-to-year grantmaking budgets. Number % Assets % Total Giving % (m) (m) Some foundations make grants that are far more than the minimum 5 percent of their assets, sometimes because they are spending down their assets. Other foundations are Private 1,137 88.14 $5,067.55 69.86 $332.34 66.82 pass-through foundations, which have smaller assets, but routinely transfer funds from Corporate 113 8.76 805 11.11 91.74 18.44 other sources into the foundation. These types of budgeting generate discrepancies Community 32 2.48 1,341.57 18.49 71.35 14.35 between the ten largest foundations by assets and by grants. The ten largest founda- Other 1 8 0.62 39.08 0.54 1.95 0.39 tions in Wisconsin by grants paid includes five foundations which are not on the top | Wisconsin State of Philanthropy 2009 ten list by assets: the Argosy Foundation, the Helen Bader Foundation, the Overture Total 1,290 100.00 7,254.10 100.00 $497.38 100.00 Foundation, the Jane Bradley Pettit Foundation, and the Cudahy Foundation. Grants 1 Denotes operating and non-classified foundations paid in 2007 by the ten largest Wisconsin foundations by grants range from $10.4 Source: Foundation Information Center, DFW 2008 million to $39.6 million, with a median of $14.1 million. national foundationS In addition to Wisconsin grantmakers, national grantmakers also play a large role in giving to organizations in Wisconsin. The top ten non-Wisconsin foundations giving in Wisconsin contributed a combined total of over $45 million to Wisconsin nonprofits in 2007, according to Foundation Center. These national funders provide much-needed 4 support to Wisconsin nonprofit organizations.

a Community of GivinG Top Ten Foundations Top Ten Wisconsin Foundations by Assets, 2007 Top Ten Wisconsin Foundations by Total Giving, 2007 The top ten Wisconsin foundations hold 39 percent of all foundation The top ten foundations by total giving together gave nearly $179, which assets. The top 4 percent of foundations in the state hold over 66 accounts for 36 percent of foundation giving in Wisconsin in 2007. The percent of the foundation assets. Amounts are shown in millions. top 5 percent of foundations account for nearly two-thirds of the foundation giving in 2007. Amounts are shown in millions. 1. The Lynde and Harry Bradley Foundation . . . . . . . . $815.0 1. The Lynde and Harry Bradley Foundation . . . . . . . . $39.6 2. Greater Milwaukee Foundation . . . . . . . . . . . . . . . . $574.4 2. Greater Milwaukee Foundation . . . . . . . . . . . . . . . . $28.8 3. Kern Family Foundation, Inc. . . . . . . . . . . . . . . . . . . $385.0 3. Reiman Foundation, Inc. . . . . . . . . . . . . . . . . . . . . . . $20.9 4. Kohler Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . $216.4 4. Argosy Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . $15.9 5. Reiman Foundation, Inc. . . . . . . . . . . . . . . . . . . . . . . $203.3 5. Northwestern Mutual Foundation . . . . . . . . . . . . . . $15.2 6. Northwestern Mutual Foundation . . . . . . . . . . . . . . $164.0 6. Helen Bader Foundation . . . . . . . . . . . . . . . . . . . . . . $12.9 7. Community Foundation for the Fox Valley Region . . $162.2 7. Community Foundation for the Fox Valley Region . . $12.2 8. Madison Community Foundation . . . . . . . . . . . . . . . $155.0 8. Pleasant T. Rowland Foundation . . . . . . . . . . . . . . . $11.5 9. Pleasant T. Rowland Foundation . . . . . . . . . . . . . . . $101.3 9. Kohler Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.5 10. Siebert Lutheran Foundation . . . . . . . . . . . . . . . . . $100.0 10. The Overture Foundation . . . . . . . . . . . . . . . . . . . . $10.4 Source: Funding Information Center, DFW 2008 Source: Funding Information Center, DFW 2008 Top Ten Non-Wisconsin Foundations Giving in Wisconsin, 2007 Top Ten National Foundations by Assets, 2008 The top ten non-Wisconsin foundations contributing in Wisconsin gave The top ten foundations by assets in the U.S. hold over $117 billion in a total of $43 million in 2007. Only two of the top ten non-Wisconsin assets. Wisconsin’s largest foundation, The Lynde and Harry Bradley foundations contributed more than $5 million to Wisconsin foundations Foundation, currently ranks the 83rd largest in the nation. Amounts are in 2007. Amounts are shown in milions. shown in billions. 1. The Grainger Foundation. . . . . . . . . . . . . . . . . . . . . . $14.6 1. Bill and Melinda Gates Foundation . . . . . . . . . . . . . $38.9 2. Robert Wood Johnson Foundation . . . . . . . . . . . . . . $ 7.0 2. J. Paul Getty Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . $11.1 3. Ewing Marion Kauffman Foundation . . . . . . . . . . . . $ 4.0 3. The Ford Foundation . . . . . . . . . . . . . . . . . . . . . . . . . $11.0 | Wisconsin State of Philanthropy 2009 4. Fred C. and Katherine B. Andersen Foundation . . . $ 3.9 4. Robert Wood Johnson Foundation . . . . . . . . . . . . . . $10.7 5. The Kresge Foundation . . . . . . . . . . . . . . . . . . . . . . . $ 2.9 5. The William and Flora Hewlett Foundation . . . . . . . $ 9.3 6. The Joyce Foundation . . . . . . . . . . . . . . . . . . . . . . . . $ 2.7 6. W. K. Kellogg Foundation . . . . . . . . . . . . . . . . . . . . . $ 8.1 7. The Annie E. Casey Foundation . . . . . . . . . . . . . . . . . $ 2.4 7. Lilly Endowment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.7 8. NoVo Foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.2 8. John D. and Catherine T. MacArthur Foundation . . $ 7.1 9. Otto Bremer Foundation . . . . . . . . . . . . . . . . . . . . . . $ 1.9 9. The David and Lucile Packard Foundation. . . . . . . . $ 6.6 10. U.S. Bancorp Foundation . . . . . . . . . . . . . . . . . . . . $ 1.6 10. The Andrew W. Mellon Foundation . . . . . . . . . . . . . $ 6.5 Source: Foundation Center, DFW 2008 Source: Foundation Center 2008 5

a Community of GivinG Foundation Giving: Private Foundations T he vast majority of foundations in Wisconsin are private foundations, which Wisconsin’s Top Ten Private Foundations by Assets, 2007 include family foundations and independent foundations. There is no legal distinction between family and independent foundations, but most people 1. THE LYNDE AND HARRY BRADLEY FOUNDATION $815 consider family foundations to be organizations started by members of a family who either sit on the board of trustees themselves or whose descendents sit on the board of trustees. Independent foundations are generally understood to be foundations with 2. KERN FAMILY FOUNDATION, INC. $385.0 little or no family involvement. Since there is no legal distinction between these types, we refer to both of these types of foundations as private foundations. 3. KOHLER FOUNDATION $216.4 Over the past several years foundations have been increasing in number and influence across the country. Foundations, charitable organizations that make grants to nonprofit 4. REIMAN FOUNDATION, INC. $203.3 organizations, include private foundations, community foundations, corporate foundations and operating foundations. Since 1978, an increasing proportion of giving in 5. PLEASANT T. ROWLAND FOUNDATION $101.3 the U.S. is carried out through foundations, increasing from 5.5 percent to 11.6 percent of total giving, according to Giving USA. Foundations are unique in that they have several tax advantages over individual giving, but also have strict reporting and payout 6. SIEBERT LUTHERAN FOUNDATION, INC. $100.0 requirements. Private foundations can be found in every region of the state, and contribute vital grant 7. HERZFELD FOUNDATION $84.4 funding to the communities they reside in, and across the state, country, and even internationally. Private foundations are instrumental in creating livable communi- 8. PHILLIPS FOUNDATION $83.3 ties through their contributions, and are often the catalysts that help organizations to generate public support for projects and community initiatives. 9. DANIEL M. SOREF CHARITABLE TRUST $79.3 Private philanthropy goes well beyond dollars donated as foundation trustees and staff often lend their expertise to new nonprofits, and help organizations to grow and thrive. 10. JUDD S. ALEXANDER FOUNDATION $75.3 Successful public-private partnerships also rely on input and support from private Amounts are shown in millions foundations. Public-private partnerships have led to new community initiatives and Source: Funding Information Center, DFW 2008 new focused strategic methods to tackle difficult community issues. aSSetS and GivinG Private foundations make up the majority of foundation giving in Wisconsin, accounting for two-thirds of all foundation grants in 2007. Family and independent foundations | Wisconsin State of Philanthropy 2009 also hold 70 percent of the foundation assets in Wisconsin. Though private foundations hold most of the foundation assets, only six of the top ten largest foundations in Wisconsin by assets are private foundations, the other four are corporate and community foundations. Of the 50 largest foundations by assets, 32 are private foundations. The majority of private foundations in Wisconsin are modest in size, with less than $1 million in assets and run either by volunteers out of their homes or are housed in bank trusts and law firms. Nearly two-thirds of private foundations gave less than $100,000 in grants in 2007, and only 5 percent gave more than $1 million that year. More information about the inner workings of private foundations in Wisconsin is 6 discussed in the Insider’s Guide to Foundations.

a Community of GivinG Foundation Giving: Corporate Foundations W isconsin’s vibrant corporate philanthropic sector encompasses a variety of sizes and forms of giving. Corporate giving often goes beyond the support of nonprofits to include civic organizations, community initiatives and special projects that help in the promotion of the community they work and live in. The role of corporate giving is often as initial investor or fundraiser for nonprofits. Their influence is critical in the promotion of awareness of key community needs. tyPeS of CorPorate GivinG Corporate foundations do not represent the entire scope of corporate charitable giving. Just as individuals outnumber and outspend private and family foundations, corporate giving programs outnumber corporate foundations. There are many reasons for this discrepancy. Foundation giving has several advantages, but also has a few extra regulatory hurdles, making it the right choice for many larger corporations, and a less realistic choice for most smaller corporations. Due to these differences, corporate foundations make up only a relatively small proportion of corporate donations. Wisconsin corporate foundations have combined assets of nearly $806 million, and Wisconsin’s Top Ten Corporate Foundations by Assets, 2007 gave out nearly $92 million in grants in 2007. Since the majority of corporations in Wisconsin making charitable contributions do so 1. NORTHWESTERN MUTUAL FOUNDATION $164 through corporate giving programs and therefore are not subject to the same reporting requirements as corporate foundations, it is harder to track and measure their giving. 2. MEAD WITTER FOUNDATION, INC. $72.8 As a result, the true level of grantmaking by corporations is difficult to capture, and is likely much higher than the level indicated by the data in this report. In addition to the monetary contributions made by corporate foundations and giving programs, 3. WINDHOVER FOUNDATION $68.5 corporations often make in-kind gifts of their company’s products or services to the nonprofit organizations they support. Other common in-kind gifts include gifts of 4. OSCAR RENNEBOHM FOUNDATION, INC. $60.2 office furniture and equipment, office and meeting space, loaned executives, graphic design and printing services. 5. JOHNSON CONTROLS FOUNDATION $48.9 emPloyee PartnerShiPS One characteristic that makes corporate foundations unique is in the types of grants 6. LADISH COMPANY FOUNDATION $32.0 they make in partnership with their employees. Corporate foundations are much more | Wisconsin State of Philanthropy 2009 likely to provide challenge or matching grants than community or private foundations, 7. WISCONSIN ENERGY CORP. FOUNDATION $30.4 in part because many corporations provide employee matching gifts. Matching gifts are when a corporation offers to match the giving of their employees, or to match dollars raised by an organization for a specific project, thereby providing an incentive for indi- 8. CORNERSTONE FOUNDATION OF NORTHEASTERN WISCONSIN, INC. $27.4 viduals to make contributions since they know the value of their gift will be increased due to the promise of the corporation to match the donated funds. Corporations 9. ALLIANT ENERGY FOUNDATION, INC. $25.6 promote employee giving in other ways as well, such as making financial contributions that allow their employees to spend time volunteering, and conducting employee 10. WISCONSIN PUBLIC SERVICE FOUNDATION, INC. $22.6 giving campaigns. Amounts are shown in millions Source: Funding Information Center, DFW 2008 7

a Community of GivinG Foundation Giving: Community Foundations W Top Ten States by Number of Community Foundations, 2007 isconsin is home to over 30 community foundations across the state. This strong network of community philanthropy is the cornerstone of Wisconsin’s 1. MICHIGAN 99 charitable giving landscape. Their impact in our state is expansive and vital to many of our communities. It is through their work that we benefit from having substantial endowments in communities as large as Milwaukee and as small as New 2. INDIANA 76 Richmond, Wisconsin. These permanent endowments provide needed philanthropic resources for now and for the future. 3. OHIO 69 national StandardS Wisconsin leads the nation in the number of community foundations achieving U.S. 4. CALIFORNIA 64 National Standards for Community Foundations. Their leadership in the national standards process has led to the development of a robust peer-review process found 5. MISSOURI 50 only among Wisconsin community foundations with the focus on best practices in governance, stewardship, transparency and community leadership. Through adopt- 6. PENNSYLVANIA 37 ing best practices they have embraced a role in developing and using their knowledge, networks, reputation and ability to contribute and leverage resources to drive change for the betterment of their communities. 7. NORTH CAROLINA 32 According to Foundation Center, community foundations are especially prevalent in Midwestern states. The Midwest is home to more than 45 percent of the nation’s com- 8. TEXAS 31 munity foundations, and Wisconsin ranks fifth out of eight Midwest states and ninth nationally in total number of community foundations. 9. WISCONSIN 31 reGional leaderShiP Though community foundation giving is primarily place-based, they offer a wide array 10. FLORIDA 29 of venues for giving from scholarships, field of interest, nonprofit agency and donor Source: Foundation Center 2008 advised funds to supporting organizations, all of which support nonprofit organizations in every area from arts to human services to health and welfare. Nearly every part of Wisconsin is served by community foundations located in more than 22 counties throughout the state. Wisconsin’s community foundations provide a significant amount of grant support for Wisconsin nonprofits. In many areas of Wisconsin, community foundations are the only significant forms of foundation | Wisconsin State of Philanthropy 2009 grantmaking. 8

a Community of GivinG Foundation Giving: Community Foundations aSSetS and GivinG Community foundations are technically classified as public charities, since their support comes from community donations rather than a single family or corporation. However, community foundation tax data is collected by the major foundation data sources. Community foundations’ assets total more than $1.3 billion, and they contributed more than $71 million in grants in 2007. Community foundations are an especially vital source of support outside the southeastern region of the state, where the majority of foundation giving is concentrated. In 2007, community foundations held more than $673 million in assets and made over $35 million in grants in the counties outside southeastern Wisconsin. donor adviSed fundS One of the major activities of community foundations is managing donor advised funds. When donors establish these types of funds, they determine its purpose. Each year, a portion of the fund is used to make charitable grants in accordance with the Wisconsin’s Top Ten Community Foundations by Assets, 2007 donor’s intent. Community foundations typically manage a large number of donor advised funds, and these funds comprise a large proportion of community foundation 1. GREATER MILWAUKEE FOUNDATION $574.4 assets and giving. 2. COMMUNITY FOUNDATION FOR THE FOX VALLEY REGION $162.2 GeoGraPhiC affiliateS Not every community has the infrastructure to develop a free standing community foundation. To ensure communities no matter their size have the opportunity to grow 3. MADISON COMMUNITY FOUNDATION $155.0 and build placed based philanthropy community foundations have created the perfect vehicle geographic affiliates. 4. OSHKOSH AREA COMMUNITY FOUNDATION $72.6 Geographic Affiliates are unique place based giving structures run by committed leaders and donors who share a common passion for the future of the place they call 5. GREATER GREEN BAY COMMUNITY FOUNDATION, INC. $60.2 home. Each geographic affiliate fund is led by a local advisory committee made up of com- 6. DULUTH-SUPERIOR AREA COMMUNITY FOUNDATION $53.2 munity volunteers, who under the guidance of an existing community foundation help identify current and emerging charitable needs in their communities, provide com- | Wisconsin State of Philanthropy 2009 7. RACINE COMMUNITY FOUNDATION, INC. $34.2 munity leadership and are involved in efforts to encourage charitable giving among residents. It is home-grown, hometown philanthropy and it is making a difference 8. LA CROSSE COMMUNITY FOUNDATION $29.5 that is sustainable. 9. COMMUNITY FOUNDATION OF GREATER SOUTH WOOD COUNTY $27.9 10. COMMUNITY FOUNDATION OF NORTH CENTRAL WISCONSIN $27.3 Amounts are shown in millions Source: Funding Information Center, DFW 2008 9

a Community of GivinG Individual Giving I ndividuals are not mandated by law to provide information on their charitable giving, as foundations are required to do. The best source of information on individual giving comes from the IRS Statistics of Income data tables, which is publicly available tax data on charitable contributions and bequests claimed as deductions on income taxes. IRS tax data only includes charitable gifts which are claimed on tax forms as itemized deductions, and therefore do not include all individual charitable giving. It is estimated that between 20 percent and 40 percent of taxpayers itemize their charitable deductions, according to the Forum of Regional Associations of Grantmakers. The latest available data on individual giving is from the 2006 tax year. In 2006, individuals in Wisconsin claimed a total of over $3.02 billion in charitable contributions. Wisconsin was ranked 20th in the country for total contributions by individuals, the same as Wisconsin’s ranking by population. In comparison, California had the highest contributions in 2006, with $24.36 billion, and North Dakota had the lowest with $206 million. Wisconsin ranked 29th for contributions as a percentage of adjusted gross income, at 2.14 percent. Wisconsin’s average charitable contribution claimed per tax return ranked 45th in the nation, at $3,467. Top Ten States by Average Charitable Contributions by Residents Making Over $200,000 in 2006 WiSConSin rankinGS Wisconsin’s high ranking for total contribution (for a state our size), and low aver- 1. WYOMING $74,901 age contribution is a sign of Wisconsin’s unique character. The reason Wisconsin’s average contribution rank is so low is because Wisconsin residents are itemizers—we 2. UTAH $40,480 itemize charitable deductions more often than our neighbors in other states, likely due to Wisconsin’s relatively high state income tax. Evidence of this can be found in the 3. OKLAHOMA $37,629 difference between the average contribution by all individuals in Wisconsin (ranked 45th) and the average contribution by residents making over $200,000. Wisconsin’s average contribution by those making over $200,000 a year is $25,069, and was ranked 4. NEBRASKA $29,037 10th highest in the nation. Wisconsin outranks nearly every other Midwest state (with the exception of Nebraska), and even outpacing California’s average contribution of 5. DISTRICT OF COLUMBIA $28,718 $21,764 by those making over $200,000. Wisconsin residents do not necessarily give less on average than other states; we are merely more likely to itemize small deductions 6. NEW YORK $27,928 than residents of other states. Again, this difference may have to do with Wisconsin’s | Wisconsin State of Philanthropy 2009 income and property tax laws. 7. NEVADA $26,370 Similarly, Wisconsin ranks unusually high in the number of foundations per state, especially when population is taken into account. Wisconsin ranks 9th in the country 8. FLORIDA $25,994 by number of community foundations, despite the fact that Wisconsin has a much lower population than every other state in the top 10. Wisconsin’s high number of 9. TENNESSEE $25,181 foundations and our charitable contributions rankings are influenced by the fact that Wisconsin residents are exacting and precise tax filers. Many Wisconsin residents form foundations even when their asset base is small, in order to capitalize on the tax 10. WISCONSIN $25,069 advantages associated with establishing private foundations. 10 Source: IRS Statistics of Income 2008

a Community of GivinG Snapshots of Philanthropy Other Grantmaking Types G In 2001, the public dialogue surrounding critical rantmaking public charities and operating foundations are unique forms of issues facing Duluth, Minnesota and Superior, philanthropic giving. Some of the most visible grantmakers are grantmaking Wisconsin was so contentious that citizens were public charities, which not only contribute funds, but build public awareness of community issues and vital nonprofit institutions. Operating foundations contribute hesitant to engage in the public debate. In an effort only a small amount of grant dollars to outside programs, but contribute to the public to improve public discourse, the Duluth Superior good themselves through charitable programs and research. Area Community Foundation launched Speak GrantmakinG PubliC CharitieS Your Peace: The Civility Project which encourages Grantmaking public charities are organizations that obtain their assets from various community members of the Duluth/Superior members of the public, rather than a single source, such as a family or business. area to discuss community issues respectfully Sometimes these organizations raise money for a particular institution – such as The and promotes nine simple tools taken from University of Wisconsin Foundation – or other times they raise funds for specific causes, such as poverty, social justice, or a women’s fund. P.M. Forni’s book Choosing Civility. “The Since the IRS does not have a separate classification for public foundations other than nine tools of civility are about urging citizens community foundations, grantmaking public charities can be difficult to identify using to communicate with each other in a more IRS definitions and resources. As a result, tracking the giving of grantmaking public respectful and effective way,” explains Holly charities is very cumbersome when compared with foundation data. C. Sampson, president of the Duluth Superior On Foundation Center’s list of the 50 largest grantmaking public charities, Wisconsin Area Community Foundation. “This isn’t has one organization listed. The University of Wisconsin Foundation is ranked at about censoring people’s opinions but rather number 38, with total giving in 2006 of over $143 million. reminding ourselves of the basic principles oPeratinG foundationS of respect, even when in a heated debate.” Operating foundations are unique in that they conduct themselves very much like The Community Foundation’s influence has nonprofit organizations. Operating foundations are their own type of organization categorized by the IRS. Operating foundations have the primary purpose of conducting been integral in engaging individuals in government research, social welfare, or charitable programs or services in the public interest forums, middle school classrooms, unions, businesses, rather than making grants. These charitable programs are often partially or wholly and church groups to participate in the Speak Your self-sustaining. Operating foundations sometimes make grants to other community Peace campaign. The impact extends beyond the organizations, but these grants are usually small in comparison with the amount used for internal charitable programs. Duluth Superior Area Community Foundation One of Wisconsin’s internationally known operating foundations is The Johnson | Wisconsin State of Philanthropy 2009 - multiple school districts and foundations in Foundation which is dedicated to convening conferences on important issues to soci- Wisconsin and Minnesota, including the Community ety at their Wingspread facility. Foundation of Greater South Wood County, are adopting Speak Your Peace in their communities and materials have been shared with communities throughout the United States and in Russia and Australia. 11

a Community of GivinG Regional Philanthropy Top Ten Counties by Grants Paid Milwaukee $252,727, 819 Dane $46,694,085 Waukesha $45,796,085 Outagamie $17,760,682 Sheboygan $16,946,425 Brown $14,585,441 Racine $11,618,996 Rock $11,027,821 Marathon $8,471,240 Wood $8,451,623 Source: Foundation Information Center, DFW 2008 W isconsin’s five major regions have very different grantmaking trends. For SoutheaStern WiSConSin our study, we defined Wisconsin’s regions according to the map below. Of the more than 600 foundations in Southeastern Wisconsin, there are 37 pri- Population and wealth are not uniformly distributed around the state. vate foundations that contributed over $1 million in grants in 2007, as well as 19 The result of this uneven distribution is that many more foundations are located in Southeastern corporate foundations that contributed over $1 million. Southeastern urban areas, particularly in Milwaukee. Wisconsin is also represented by several community foundations. Greater Milwaukee Foundations in the state of Wisconsin gave a total of over $497 million in 2007 Over Foundation, the largest community foundation in the state, granted over $28.8 million two-thirds of that total came from foundations located in Milwaukee County. Indeed, in 2007. Milwaukee was the only county with foundation grants totaling more than $50 million in 2007. According to the 2000 census, Milwaukee County comprises nearly Distribution of Foundations, Assets and Giving by Region, 2007 Together the southeast and southwest regions represent 78 percent of the assets and 82 percent of total giving in the state. 20 percent of the state’s total population. NUMBER OF FOUNDATIONS BY REGION While Southeastern Wisconsin boasts two-thirds of | Wisconsin State of Philanthropy 2009 the state’s foundation assets and grantmaking, it ac- 52% 12 10 6 53 Southeast counts for just over half of the number of foundations. The other regions of the state clearly are actively in- Southwest volved in philanthropic giving, even if they do not FOUNDATION ASSETS BY REGION have the financial resources to give as much. Northeast 66% 12 10 6 5 1 North Central FOUNDATION GIVING BY REGION Northwest 12 69% 13 9 5 3 1 Other Other denotes foundations that are located outside of the state, but give in Wisconsin. Source: Foundation Information Center, DFW 2008

a Community of GivinG Regional Philanthropy SouthWeStern WiSConSin Thirteen percent of foundation giving comes from foundations located in Southwestern Wisconsin. Southwestern Wisconsin is represented community foundations in every urban area of the region, including Madison, Beloit, LaCrosse, and Janesville. The Madison Community Foundation, the largest in the region, granted over $3.1 million in 2007. Of the more than 200 foundations in Southwestern Wisconsin, there are eight corporate and private foundations that granted over $1 million in 2007. northeaStern WiSConSin The Appleton/Green Bay Area in Northeastern Wisconsin, the third largest metropolitan area, accounts for 9 percent of the grantmaking in the state. A large portion of giving in Northeastern Wisconsin comes from community foundations, including the Community Foundation for the Fox Valley Region ($12.1 million in grants in 2007), the Oshkosh Area Community Foundation ($3.1 million), and the Greater Green Bay Community Foundation ($2.7 million). There are also seven private and corporate foundations in the Northeast region which granted over $1 million in 2007. north Central and northWeSt WiSConSin North Central and Northwest Wisconsin together account for 8 percent of the state’s grantmaking. These regions are represented by very strong community foundations. In North Central Wisconsin, the Community Foundation of Greater South Wood County granted over $3 million in 2007, and the Community Foundation of North Central Wisconsin granted over $2 million in 2007. There are nearly 100 foundations in North Central Wisconsin, and their combined grantmaking totals over $22.5 million. Northwestern Wisconsin is home to more than 50 foundations, which together granted more than $18 million in 2007. Northwestern Wisconsin is represented by community foundations in 5 counties. St. Croix Valley Community Foundation and Duluth Superior Area Community Foundation are the two largest community foundations in the Northwest, contributing $1.5 million and $2.1 million in 2007, respectively. | Wisconsin State of Philanthropy 2009 GeoGraPhy and GivinG A grantmaker’s geographic location does not necessarily determine where it funds. Over $50 million The majority of foundations in Southeastern Wisconsin do not fund only in $10 million to $50 million the Milwaukee area. Thirty percent of the Wisconsin 100 foundations limit their $1 million to $10 million grantmaking to local projects only, but the majority of these grantmakers are $500,000 to $1 million Wisconsin Foundation Giving by County, 2007 community foundations. The vast majority of respondents contribute to projects Source: Foundation Information Center, DFW 2008 throughout Wisconsin, with 40 percent indicating that they fund at the national $100,000 to $500,000 or international level in addition to funding Wisconsin projects. Only 2 percent Under $100,000 of respondents indicate that they do not fund in Wisconsin at all. 13

the ChanGinG eConomy Economic Impact Assets of Wisconsin Foundations by Year The bars for 2008 and 2009 represent projections based upon a total combined asset decrease of 20 percent each year. Amounts are shown in billions. 8 7 6 5 4 $7.25 3 $5.80 $5.25 $5.55 $6.24 2 $4.77 $4.64 1 0 2003 2004 2005 2006 2007 2008 2009 Source: Foundation Information Center, DFW 2009 O ne of the most pressing current issues facing decreases in assets among these foundations are quite a bit philanthropic organizations is the effect of the larger than indicated by the data. economic downturn. How have assets of foundations No correlation exists between losing a large percentage Change in Assets for Wisconsin 100 been affected? How will decreased assets affect future grant of assets and foundation type—community foundations, 1-10 percent decrease payout? How are grantmakers responding? While the future corporate foundations and private foundations have all been is uncertain, grantmakers’ commitment to the nonprofits they affected by asset losses. Similarly, no correlation was found serve is strong, and funders and nonprofits are working to- between the foundations with the largest assets and the largest 4% no 8% de gether to address the effects of the economic downturn. This losses. The group that lost 20 percent or more of their assets cre as section examines how these changes have impacted Wisconsin included foundations with assets less than $1 million to over e foundations’ financial strength as well as their grantmaking $100 million. 37% activities. 21% 1-10 percent decrease Of those reporting a decrease in assets, 75 percent attribute 11-20 percent decrease aSSetS deCline the change to decreased return on investments. The other 25 | Wisconsin State of Philanthropy 2009 The 2008 decline in the stock market has affected the assets of percent of respondents attribute the asset decline to changes Wisconsin’s philanthropists, just as it has affected every sec- within the organization – major gifts, increased grant payout, 30% tor of the economy. In 2008, nearly all (87 percent) of the corporate budgets, decrease in gifts to the foundation, spend- > 20 percent decrease organizations in the Wisconsin 100 experienced a decrease in ing down, etc. assets. At the time the surveys were completed, most of these The figure above represents total foundation assets by year. organizations saw a decrease in assets of less than 20 percent, Since 2000, the average annual change in assets has been a 5.7 while 29 percent of the respondents’ assets decreased by 20 percent increase. The projected decrease is based upon data Source: DFW Wisconsin 100 2008 percent or more. The surveys were collected between August from the Wisconsin 100 survey results. 2008 and December 2008, so it is nearly certain that current 14

the ChanGinG eConomy Projected Grantmaking Budgets H ow will these decreased assets affect grant payout? Foundations calculate their grant payout in many ways, taking into account the IRS’s mandatory 5 percent payout, and the rolling average of assets of the foundation over the past few years. Most foundations’ grantmaking budgets for 2009 are based not on current assets, but on 2008 assets and earlier. Many foundations have indicated that they are Grants Paid by Wisconsin Foundations by Year The chart illustrates a projected 10 percent decrease in grants in adjusting their budgets for 2009. Foundations that used to pay out more than the 5 2008, and a further 30 percent decrease in 2009. Amounts are percent minimum may pay out a smaller percentage in the coming year, to preserve shown in millions. their asset bases. Other foundations may end up giving out far more than 5 percent 500 this year in order to fulfill past pledges, but 2010 may bring significant cutbacks to grantmaking budgets. Most foundations have indicated that 2010’s budgets will be 400 quite a bit leaner than 2009. The chart at right illustrates the grants paid by Wisconsin foundations from 2003 to 300 2007, with projections for 2008 and 2009. The chart illustrates a projected 10 per- $497 cent decrease in grants in 2008, and a further 30 percent decrease in 2009 (based on 200 Wisconsin 100 survey responses). $395 $454 $479 $398 For projected budget changes in 2009, survey respondents are nearly evenly split 100 $388 $318 between projecting a stagnant grantmaking budget for 2009 (44 percent), and a some- what decreased budget (42 percent). More than 10 percent of respondents project a 0 2003 2004 2005 2006 2007 2008 2009 significant decrease in their grantmaking budget, and 4 percent project a moderate Source: Foundation Information Center, DFW 2009 increase. There is no indication in the data that the group that lost the most in assets plans to decrease their grantmaking by a greater margin. The proportion of those significantly decreasing their grantmaking is the same (10 percent) among those who lost 20 percent of their assets or more and among group as a whole. number and Size of GrantS Nearly all surveyed grantmakers who are predicting relatively stable grantmaking in 2009 report that they will be keeping their number of grants and average size of grants about the same in 2009. All of the foundations that indicate they will be significantly decreasing their budgets report that they will be making fewer grants, but they are | Wisconsin State of Philanthropy 2009 evenly split between making fewer grants that are also smaller, and making fewer grants of about the same size. Among those who indicate that 2009’s grantmaking budget will be moderately decreased, each group has a different strategy. Some indicate that they will choose to fund fewer programs but keep their grant sizes about the same. Others report that they will be making the same number of grants, but they will be smaller. Many report that they will be making fewer grants and smaller grants, and a few of the organizations are making fewer grants that are larger in size. 15

the ChanGinG eConomy Projected Grantmaking Budgets Funders, Nonprofits Respond faCtorS affeCtinG GrantS to Economic Downturn Certain factors seem to have an effect on projected grant payout for 2009. The largest foundations surveyed (those with over $100 million in assets) appear to be the most When the economic recession hit in 2008, stable, with half reporting a moderate decrease in their grantmaking budget and half the Donors Forum of Wisconsin convened reporting relatively stagnant grantmaking budgets. Foundations in the $30 to $100 its membership to discuss how grantmakers million asset group have the smallest proportion reporting stable grantmaking in were being affected by the economic crisis and 2009. One reason the group may be decreasing their grantmaking is that mid-sized the broader implications for the social sector. foundations may have higher administrative expenses (especially for staff) than their Based on the outcome of these meetings, DFW small-sized counterparts. They also have less of an asset cushion than their larger counterparts to pay for staff salaries and benefits when assets decrease. designed and facilitated a series of listening sessions in March 2009 for funders and service As is indicated above, staff size may have an effect on projected grantmaking budgets providers to share strategies and concerns for the foundations studied. The majority of respondents (69 percent) do not foresee regarding how to ensure that resources and any change in administrative expenses next year, indicating that few organizations are anticipating staff cuts in 2009. The remaining 31 percent are equally split between services are available to meet community needs. foundations predicting they will spend more on administration next year, and founda- The listening sessions provided an opportunity tions predicting they will spend less. Two respondents report hiring freezes in 2009, for grantmakers to hear directly from nonprofits and only one foundation reports plans to hire staff this year. on how the economy is affecting their services, Intuition tells us that those organizations that have more staff members may have and to assess the impact on the financial crisis tighter budget constraints than those without staff. This situation, however, is not on local organizations. Direct communication always the case. With staff size, as with assets, the mid-sized foundations appear to be between funders and nonprofits is helping affected the most. None of the foundations with more than five staff project significantly grantmakers to respond strategically in order to decreased grant budgets. The foundations with a single staff person and those with 2-5 paid staff members have the largest proportions projecting a significant decrease most effectively assist their grantees. in their grantmaking budgets. In all, over 115 organizations participated in inCreaSed GrantmakinG these conversations. The themes emerging from Organizations projecting moderately increased grantmaking budgets are in the 2-5 these discussions provide perspective on how staff level group as well, but all of the organizations projecting increases qualified those foundations and nonprofits are responding to projections. One of the organizations is accelerating its spend-down efforts, and another the current economic downturn. states that if economic conditions worsen they will be revisiting their budget plans. The final organization projecting an increase explains that this increase is the result of | Wisconsin State of Philanthropy 2009 multi-year pledges, and will be followed by a decrease in grant funding in 2010. GrantS and GeoGraPhy Controlling for geographic location, survey respondents in Southeast Wisconsin are predicting less of a decrease in grant funding. Southeastern Wisconsin is the largest grantmaking region of the state, providing more than two-thirds of the dollars granted by Wisconsin foundations. Only 2 percent of the foundations in the Southeast predict that they will have significantly decreased grant budgets in 2009, compared to 11 percent predicting a significant decrease across the state as a whole. 16

the ChanGinG eConomy Key Themes from Impact on the Nonprofit Sector Discussions on the Economy imPaCt on the nonProfit SeCtor How will these decreased grantmaking budgets affect the nonprofit organizations Grantmakers are that philanthropists serve? The National Center for Charitable Statistics reports that approximately 23 percent of nonprofit organizations revenue comes from private …Adjusting grantmaking strategies contributions each year , and that the largest proportion of nonprofit revenue comes in response to steep decline in assets from fees for services and goods. The proportion changes drastically depending on …Continuing commitment to grantmaking the type of nonprofit organization, however. For example, arts and culture organiza- priorities while being responsive to critical tions receive an average of 41 percent of their revenue from private contributions, community and basic needs and environmental organizations receive nearly half of their revenue from private …Promoting collaboration contributions. by encouraging and facilitating nonprofit Approximately half of the surveyed foundations in the Wisconsin 100 report that alliances and mergers to increase efficiencies grant requests remained approximately the same in 2008, while 40 percent report in addition to working collaboratively with that the volume of requests increased in 2008. Forty-one percent of respondents other funders state that they received more requests for general operating support in 2008, and 30 …Communicating percent report that they received more requests for emergency support (i.e. cover- with existing grantees to exchange ing budget shortfalls). Combining these factors with the significant proportion of information and stay updated on how best organizations decreasing their grantmaking, it is anticipated that the competition to support them for grant funding will increase dramatically in the coming year, and that the entire nonprofit sector can expect their contributions from foundations to decrease fairly …Supporting nonprofit performance through significantly in 2009 and 2010. flexible dollars and non-financial resources Nonprofits are Proportion of Wisconsin 100 Reporting Changes in …Managing rising demand Grant Requests for services amid diminishing resources 50% …Focusing on core mission and maintaining quality of service 40% …Building partnerships 30% for cost savings and enhanced impact 41% | Wisconsin State of Philanthropy 2009 …Strengthening relationships 20% by involving board members, donors 33% 31% 30% 10% 26% and staff in scenario planning and strategic decision making 4% 0% …Thinking outside the box cy s tin g ests ng es en ilia r t Up a qu g ar to problem solve and creatively er ha er am t .O p Re C Em Un f eS address financial challenges n ger No e or Ge L ar or N ew M e M e/ or or M M Source: DFW Wisconsin 100 2008 17

Where the dollarS Go Types of Support Snapshots of Philanthropy F oundations are able to focus their beneficial, in that it can be stabilizing A pair of family-owned companies in giving in a number of ways that to organizations and can increase the Northeast Wisconsin formed a giving reflect both the needs of nonprof- capacity of nonprofits, making an partnership to help people struggling to its and the interests of the foundation impact on each and every program the itself. Grantmaking can be designated organization administers. secure basic life needs such as food, housing for a particular type of support includ- and health care. The Basic Needs Giving other tyPeS of SuPPort ing program, general operating, capital Less than one-half of foundations Partnership, a joint initiative of the U.S. Oil support, scholarships, challenge/match- surveyed provide capital support, multi- Open Fund for Basic Needs and the J. J. Keller ing grants, and technical assistance. year, scholarships, challenge/matching Foundations may also choose to direct Foundation Inc, provides support to prevent grants, technical assistance, or program their grantmaking by defining specific people in episodic crisis from becoming people related investments. The smallest foun- program areas they support, such as so- dations (by assets) are the least likely to in chronic need. The partnership evolved out cial services or arts and culture. provide these less traditional types of of the U.S. Oil Open, an annual golf outing ProGram & General oPeratinG SuPPort support, which indicates that the vast which started in 1986. U.S. Oil Co., Inc. fully Program support is the most popular majority of the foundations in Wisconsin funds the event expenses, ensuring that every type of grantmaking by the surveyed exclusively provide general operating dollar contributed by sponsors and golfers goes organizations; 91 percent of the survey and program support. Nearly half of the respondents provided grant support for organizations surveyed fund research, directly into endowed funds within the Fox nonprofit programs. General operat- planning or evaluation grants at least Valley, Oshkosh, and Green Bay community ing support for nonprofit organizations sometimes, but very few respondents foundations. Each community foundation is the second most common type, with fund these types of grants regularly. supports initiatives that take a long-term view 72 percent indicating they provide this The least common type of grantmaking “Our focus is on type of grant. Grantmakers for Effective is the program related investment (PRI). in helping people prevent and move out of Organizations defines general operating PRIs are low-interest or no-interest loans collaboration among poverty and encourage collaborative solutions support as grants in support of a nonprofit to nonprofit or for-profit organizations supported jointly by the non-profit, public and organization’s mission rather than specific which advance the mission of the founda- funders and nonprofits to private sectors. J. J. Keller Foundation matches projects or programs. tion. Only 6 percent of the foundations make a measurable impact surveyed provide PRIs. This reluctance the grant-making budget in each of these More and more, Wisconsin grantmakers to provide PRIs is likely due in part to the on the community we care funds, doubling the grant dollars available are seeing the benefits of providing extensive legal reporting requirements for basic needs programs. “When you have general operating support in addition for these types of loans compared with about,” | Wisconsin State of Philanthropy 2009 to grants that are restricted to particular grants. Additionally, many foundations collaboration between organizations that projects. Many funders tend to shy prefer to use their principle to achieve — Sarah Schmidt, are trying to accomplish the same goal, you away from this type of funding, as it is Schmidt Family/U.S. Oil Co. Inc. can make it twice as effective with twice the the highest rate of return so that there is difficult to track results when funding more money available for grantmaking. funding,” notes Mary Harp-Jirschele, executive is not tied to particular programs, and PRIs do not achieve a high rate of return sometimes donors feel less satisfaction director of the J. J. Keller Foundation. In by their very definition, however, these when their grant dollars are being types of investments allow foundations to 2008 the golf outing was supported by nearly used for items like rent, salaries maximize their potential positive impact 600 businesses, foundations and individuals and utility bills. However, general by using their assets to help advance their raising over $1.2 million. 18 operating support is widely viewed as missions.

Where the dollarS Go Program Areas E ducation, social services, art and health represent the top four funding priorities for U.S. foundations. Wisconsin foundations’ major focuses are similar to these national priorities. In 2007, arts and culture was the top program area in Wisconsin, due to a major gift to the Discovery World Museum. 2006 represents a more typical year for Wisconsin with education as the largest program area, followed Foundation Areas of Giving in Wisconsin and the United States by social & human services, and then arts and culture. The education area continues to receive the most support from Wisconsin and the U.S. Wisconsin giving is very comparable to the U.S. foundation trends. The majority of foundations surveyed use their grantmaking capacity to fund five or Wisconsin, 2006 National, 2007 more distinct programs areas. Community foundations tend to fund the most program areas, with more than 80 percent funding five or more. Private foundations are the .5% .5% most likely to conduct very focused grantmaking, with the largest proportion funding only one, two, or three types of programs. 14% 13% The number of program areas a foundation funds varies according to its asset level. All 20% 15% of the survey respondents with assets over $100 million fund five or more program 6% 9% areas. The proportion of foundations with under $5 million in assets funding five or 11% more areas is closer to 50 percent. Foundations with a larger asset base are in a better 10% 8% position to diversify their giving, while smaller foundations tend to be more impactful in their grantmaking when they are more focused. .5% 6% 12% Education is the most common focus area for Wisconsin foundations. More than three- 35% 3% 32% fourths of respondents cite education as a program focus area, and this proportion is 4% consistent among private, community, and corporate foundations, as well as for each asset level, from less than $1 million to over $100 million. An in-depth exploration of education funding is included on page 21. Arts & Culture International Economic Development Religion Social and human services and health also represent very common funding areas Education Social & Human Services for Wisconsin foundations. The program areas that are least commonly supported Environment Sports & Recreation by the survey respondents are economic development, religion, sports & recreation, Health and disaster relief, which are each funded by about a quarter of the respondents, and Source: FoundationSearch.com 2009 international grantmaking, which is funded by only 9 percent of respondents. Disaster relief, funded by only 26 percent of foundations overall, is heavily funded by corporate foundations, with 75 percent making these types of grants. Community | Wisconsin State of Philanthropy 2009 foundations are the most likely to support less common program areas such as sports and recreation and environment. 19

Where the dollarS Go Focus on Health A bout one out of every four foundation grant dollars in the US goes toward health, according to Giving USA. In Wisconsin, about 62 percent of surveyed foundations fund health at some level. The health area is most heavily supported by private and community foundations, with 60 percent and 77 percent making grants in health respectively. Corporate foundations and giving programs support health slightly less often, with 42 percent making grants in the health area. In each asset group, from less than $1 million to more than $100 million, at least half of the surveyed grantmakers report making grants in the health funding area. Within health, the largest area generating support from the survey respondents is children- and youth-related health grantmaking, with 36 percent of respondents supporting this area at some level. Other common areas are medical research, mental health, and substance abuse. The areas with the least investment include health policy, health workforce, quality of care, and oral health. Though several of the least popular areas are poverty-related, the most common primary focus area among the survey respondents is access to health care. Nearly one in four grantmakers in Wisconsin make grants toward access to health care, and it is the primary focus area of nearly 20 percent of respondents. Most funders supporting health make grants toward programs and projects, with many also providing general operating support for health-related organizations. Non-traditional Wisconsin 100 Primary Focus Areas within Health funding to health organizations, including PRIs, technical assistance, and health scholarships, are not widely supported through grants by foundations in Wisconsin. 2% 2% 2% 2% Access to Care 19% 4% 19% Children & Youth 15% 4% Disease Related 11% 4% Medical Research 11% Public Health 9% Aging 8% 7% 15% Mental Health 7% | Wisconsin State of Philanthropy 2009 Health Promotion 4% Reproductive Health 4% 8% Substance Abuse 4% Health Literacy 2% 9% 11% Medical Eduation 2% Quality of Care 2% 11% Racial/Ethnic Disparities 2% Source: DFW Wisconsin 100 2008 20

Where the dollarS Go Snapshots of Philanthropy Focus on Education W In 1959, Robert and Patricia Kern founded Generac ithin education, Wisconsin’s grantmakers focus on a variety of projects. Power Systems, one of the world’s largest independent As a group, they do not favor one level of education over the others; early manufacturers of complete engine-driven generator childhood, primary, secondary, and higher education are all equally cited as grantmakers’ primary focus area. systems. After selling the business, Scholarship funding is a major education giving area, with 56 percent of education they established the Kern Family grantmakers funding scholarships and 16 percent reporting that scholarships are their Foundation to invest in the future primary giving area within education. In addition to those citing scholarships as their through values, education and primary education focus, there are a significant number of foundations in Wisconsin innovation. One of the Kern Family that only fund scholarships. There are over 150 scholarship foundations in Wisconsin, and together these foundations provided more than $7 million in scholarship dollars Foundation’s signature programs in 2007. has become support for Project K-12 education is a frequently supported area of education. Over two-thirds of the Lead the Way (PLTW), a highly foundations studied supported K-12 education, with primary or secondary education regarded academically-rich, project- as the central focus area of more than a quarter of the respondents. Higher education based introduction to the skills needed for careers in is also a common focus, with 43 percent of respondents making grants toward higher engineering and technology. Project Lead the Way is education and 16 percent reporting higher education as their primary focus. Although only 10 percent of respondents report that early childhood is their primary focus area, truly a statewide initiative in Wisconsin, involving over half of all the grantmakers surveyed indicate that they make grants in early child- government agencies in education, workforce hood education at some level. development and commerce, two- and four-year college and university systems, the business sector, the “To keep our economy philanthropic sector and middle and high schools. globally competitive and In Wisconsin, the Kern Foundation’s investment of maintain our standard WI 100 Primary Focus Areas within Education more than $4 million has been supplemented with over $3.2 million in public and private funding, of living, it is critical to 10% 14% expanding the PLTW program to schools throughout have our students consider the state. The Greater Milwaukee Foundation, engineering and technical 16% Early Childhood 10% Harley-Davidson Foundation, and Rockwell Higher 16% fields as career choices,” | Wisconsin State of Philanthropy 2009 Automation are among Project Lead the Way’s 14% Primary 14% private funding investment partners. The success of Secondary 14% — Robert Kern, Scholarships 16% this public-private partnership was recognized in Kern Family Foundation benefactor. Other Focus Area 14% 2007 by the Public Policy Forum. Milwaukee Public No Primary Focus 14% 14% Schools, a partnering district, was the recipient of the 16% “private-public cooperation” innovation award for the district’s adoption of PLTW. 14% Source: DFW Wisconsin 100 2008 21

inSider’S Guide to foundationS Inside the Organization Wisconsin 100 Expected Change in Administrative Expenses 8% increase 16% decrease 68% no change Source: DFW Wisconsin 100 2008 F oundations vary widely in their organizational structure, staff size, investment administrative expenses likely reflects the standard operations of most foundations practices, administrative expenses, and overall grantmaking process. Many continued year after year. larger foundations are highly visible in their respective communities while many The foundations who are predicting changes in their administrative expenses, the smaller foundations have a limited public presence. The limited visibility of many vast majority are community foundations. Only 16 percent of private foundations and funders can cause confusion about reality of foundations’ day-to-day operations. 9 percent of corporate foundations predict a change in administrative expenses in In order to provide an “insider’s” look at these issues, this section examines the 2009, as opposed to 75 percent of community foundations. Community foundations organizational structure of Wisconsin foundations. are about equally divided between increasing and decreasing their administrative adminiStrative exPenSeS expenses next year, with 35 percent increasing and 40 percent decreasing. Foundations’ administrative expenses have been a source of scrutiny in recent years. Community foundations’ administrative expenses may be more volatile due to the Administrative expenses are considered to be charitable-use dollars that the founda- unique roles they play in their communities. For example, many community foun- tion uses to help them achieve their mission. These expenses cover meetings with dations are involved in community research and convening activities that are less grantees, gatherings with community leaders, board meetings to approve grants, and common among private and corporate foundations. Additionally, operating expenses | Wisconsin State of Philanthropy 2009 other expenses necessary to thoughtfully, strategically, and successfully make grants can be more difficult to obtain for community foundations, with budgets that are to the communities which foundations serve. largely determined by their donors, and that may not have adequate access to unre- The vast majority of Wisconsin 100 foundations (68 percent) predict no change in stricted funds that can be used for operations. their administrative expenses for 2009. Changes in administrative expenses often Paid Staff reflect changes in the staffing levels or work of the foundation. A new initiative may One of the largest components of administrative expenses is staff salaries and benefits. cause an increase in administrative expenses, for example making a program-related Of the organizations surveyed, the majority (65 percent) have at least one staff person. investment for the first time will cause higher legal and or accounting fees to make This level of staffing is consistent with Donors Forum of Wisconsin members, but is the loan. The addition or subtraction of a staff member, or a change in employee not representative of the majority of foundations in the state. benefits will cause a change in administrative expenses as well. The stagnant level of 22

inSider’S Guide to foundationS Inside the Organization Private foundations make up 86 percent of the foundations in the state, over half of which have less than $1 million in assets and tend not to have paid staff. Fifty percent of the private foundations with assets over $1 million in the Wisconsin 100 survey also Number of Paid Staff by Asset Level, 2008 have no staff. Extrapolating from this data, it is estimated that more than two-thirds Assets in millions of the state’s foundations do not have any paid staff. 100% 3% 4% Foundations with no paid staff operate in a number of ways. Many are led by family 90% 20% members, others are volunteer-led, and some are led by bankers and lawyers, who may 80% 28% not be listed as staff but instead are listed as trustees, officers, directors, consultants, or 70% 44% listed under legal fees. Mostly, foundations with no staff are administrated by volunteer 60% 19% 40% family members. 5+ Staff 50% 100% The type of foundation dramatically affects staffing levels. Ninety-five percent of the 40% 16% 2-5 Staff community foundations in Wisconsin have at least one paid staff member. Half of 30% Single Staff private foundations surveyed have no paid staff at all, and all of the surveyed private 50% 27% No Staff 20% foundations with less than $1 million in assets have no staff. Twenty-five percent of 36% corporate foundations have no paid staff, but even these organizations have staff paid 10% 13% by their parent companies—the funds simply come out of the corporation rather than 0% the foundation budget. Corporate foundations maintain the largest staffs overall; half <$1 to $5 $5 to $30 $30 to $100 Over $100 Source: DFW Wisconsin 100 2008 of corporate foundations and giving programs surveyed are staffed by 2-5 employees. Assets in Millions In addition to paid staff, some foundations choose to compensate their trustees. Of the 20 percent of respondents that compensate trustees, nearly half have no paid staff, indicating that the trustees are probably performing many of the functions of paid staff at other organizations. Another 25 percent are foundations with five or more staff persons and over $100 million in assets, which suggests that these trustees are required to oversee and approve a very large number of grants each year. offiCe SPaCe Another portion of administrative expenses for foundations is office space. The majority (75 percent) of the respondents have a private office for their foundation, which again is representative for Donors Forum members, but not necessarily representative for foundations across the state. The surveyed organizations housed in bank trusts and law | Wisconsin State of Philanthropy 2009 firms are nearly all private foundations. Sixteen percent of the surveyed private foundations are housed in bank trusts or law firms, and 23 percent of private foundations had no office at all. Extrapolating from this data, the majority of Wisconsin foundations are housed in bank trusts or law firms, or has no office at all. 23

inSider’S Guide to foundationS Managing Mission unSoliCited ProPoSalS Most of the foundations surveyed were open to accepting unsolicited proposals (65 percent). Most community foundations accept them, with only 19 percent indicating Wisconsin 100 Participating in Mission-Related Investing that they do not accept unsolicited proposals. The proportion of organizations that will not accept unsolicited proposals is a little bit higher for private foundations, at 43 14% percent. 12% It seems likely that foundations with no staff or foundations with less than $5 million in assets would be less apt to accept unsolicited proposals, since they would likely lack 10% the staff capacity to evaluate them, and would lack the financial capacity to fund them. 8% However, small and non-staffed organizations are actually nearly as likely to accept unsolicited proposals. Seventy-two percent of organizations surveyed with under $5 13% 6% million in assets still accepted unsolicited proposals. Additionally, nearly half of the 4% 7% 7% 6% foundations without offices accept unsolicited proposals, and more than half of those 4% with no staff accept unsolicited proposals. 2% 0% Why would foundations with such limited capacity be so open to receiving proposals 4% from any nonprofit that wanted to apply? The answer is simple. Foundations that give 0% Al l nt Is os cy it al out the most in grants are well-known—they are often well-publicized companies e PR li a ap stm tfo oc C and large foundations with a significant presence in the media. These groups receive ve Por Adv re n er u a tremendous amount of unsolicited proposals each year. Organizations that are eas- yI en nt nit re ho ld lV e ily accessible (i.e. those with a web presence), receive a huge volume of unsolicited u Sc e ia mm ar oc proposals as well. On the other hand, small foundations run out of the houses of Co Sh S families tend to be much less well-known, and therefore receive fewer proposals in Source: DFW Wisconsin 100 2008 general, and particularly fewer unsolicited proposals. miSSion-related inveStinG Mission-related investing is the practice of investing assets to achieve both social and financial returns. Also called social investing, or sometimes socially-responsible investing, this practice can include many different types of investment strategies, from investing in socially-responsible companies, to social venture capital, community investing, or even simply screening investment portfolios with an eye toward mission. | Wisconsin State of Philanthropy 2009 Only 13 percent of surveyed foundations participate in any sort of mission-related investing. Among organizations in Wisconsin there seems to be very little interest in delving into the mission-related work that foundation endowments can do. Only 6 percent of those in Wisconsin screen their investment portfolios with an eye toward mission, and only 7 percent participate in community investment or program related investments. None of the surveyed organizations participated in any social venture capital. 24

inSider’S Guide to foundationS Snapshots of Philanthropy Managing Mission The nonprofit sector is facing what experts call an Why are so few Wisconsin foundations applying their endowment assets toward their unprecedented workforce crisis with organizations mission? There are several reasons. Firstly, it is untraditional. Mission-related investing in Wisconsin and across the country struggling to is still a new concept to most grantmakers. Additionally, program related investments and other forms of mission-related investing require a great deal of time, energy, and recruit and retain talented staff. To sometimes legal scrutiny, which can be both costly and difficult. Many foundations cultivate new sources of talent and feel as one Wisconsin 100 respondent does, who comments that “the aim is to maxi- leadership, since 2003 the Theodore mize the amount to be given.” Several other foundations indicate that they have been W. Batterman Family Foundation has considering or discussing mission-related investing, but that they have not yet taken any action. This trend is only slightly different across the country—very few founda- been providing scholarship dollars for tions and other philanthropic organizations participate in mission-related investing, college students to complete summer though the trend is growing. internships at nonprofit organizations neW initiativeS in Rock and Jefferson counties. “The Only 1 percent of foundations surveyed are considering hiring staff in 2009. Nearly Batterman Foundation’s success paved half of the surveyed organizations indicated they would take on some new initiative the way for the participation of nonprofits and other in 2009. Nineteen percent of organizations are conducting strategic planning in 2009, funders including Siebert Lutheran Foundation, and 28 percent plan to evaluate foundation effectiveness. Seventeen percent will be starting a new initiative. Fund drives are not common this year, with only 7 percent Northwestern Mutual Foundation, and George & overall indicating they are considering a major fund drive, which includes less than Julie Mosher,” said David C. Wolfson of Wisconsin one-fifth of community foundations in the state. Foundation for Independent Colleges which manages Only a few foundations indicated they would be changing their program focus, and the College-to-Work Nonprofit Internship Program. most of those were corporate foundations and giving programs. Overall, one-third of Philanthropic dollars directed towards the program corporate foundations and giving programs surveyed planned to change their program focus in 2009, while only 2 percent of private foundations and 9 percent of community benefit a variety of groups: students through hands- foundations indicated they may make a change. According to Wisconsin 100 survey on experience at community based organizations; comments, it is likely that those changing focus will begin to focus more on basic needs nonprofits gain from the work of capable interns; “To ensure that the agencies in 2009 than they did in 2008. and, the quality of private college education is have the capacity to enriched. These interns could become the future leaders of Wisconsin’s nonprofit arena, reducing provide a meaningful | Wisconsin State of Philanthropy 2009 the sector’s projected workforce shortfall and experience for the student, strengthening communities through their leadership. we target nonprofits that are grantees of the Foundation,” — Carmen Witt, Former Batterman Family Foundation Executive Director 25

inSide the orGanization Challenges Facing the Philanthropic Sector “ There are so many worthy causes and not enough money to go around — there needs When asked to identify the biggest issue facing the philanthropic sector, nearly all of the surveyed foundations cite the current economic crisis. “There are so many to be more cooperation among worthy causes and not enough money to go around,” one grantmaker states. “There agencies to work together to ” needs to be more cooperation among agencies to work together to make the dollars stretch more.” The most often cited frustration among the surveyed grantmakers is simply not having enough money to accomplish their goals. “Grant requests are always greater than make the dollars stretch more available resources,” one respondent observes. Another explains that she is frustrated by “so many worthy causes, and not enough money for everyone.” -Wisconsin 100 Respondent While not having enough funds available to make grants to all the worthwhile nonprofit organizations is the most common frustration cited by respondents, seeing funds misspent is a close second. Respondents are frustrated when they see inefficien- cies, duplication of services, and unsuccessful projects. Two respondents remark that they are frustrated by “repeated investments that don’t seem to advance the work of the entity,” and “grantees’ failure to use funds as intended.” Grantmakers acknowledge, however, that their own limitations can create obstacles | Wisconsin State of Philanthropy 2009 for the nonprofits they fund. One grantmaker explains that it is hard to find “good evaluation tools without drowning the applicants in paperwork.” The biggest issue facing another grantmaker is the need to acknowledge “that organizations we support may experience being dropped by other funders, putting additional pressure on our level of funding.” “Private philanthropy, while growing, is facing the realities of picking up where government is vacating,” one respondent says. “That being the case, it is hard work to make significant quality of life improvement.” 26

inSider’S Guide to foundationS Addressing the Impact of Philanthropic Successes the Economic Crisis When asked to identify their greatest philanthropic successes, funders identify a myriad of improvements that have resulted from their work in philanthropy. Grantmakers were Amid the current economic uncertainty, Wisconsin’s proud of large capital grants which have had a tremendous impact, as well as small philanthropic and nonprofit communities are seed grants for pilot programs that ended up making a being impactful. “Big bang for working together to navigate new territory and small bucks!” remarked a proud grantmaker. prepare for the future by: Many grantmakers were most proud of the relationships they have built with their grantees—helping them to submit stellar grant proposals, helping grantees to Reaching out collaborate, making grants to improve grantees’ programs, and serving as an incuba- tor of grassroots groups yet to establish a track record. Fostering open and honest dialogue on the realities of the economic downturn in order to stay informed of Funders were also proud of their relationships with other grantmakers—from community foundations happy with their success through their Donor Advised Funds, key developments and respond strategically. to supporting their philanthropic colleagues within their giving areas. One family foundation trustee was proud of the success he had in “successfully passing on the Scenario planning practice of philanthropy to future generations of the family.” Involving nonprofit staff, the board and major donors in the forecasting and planning process “ to sustain and prioritize mission- critical programs and activities. Calling upon leadership We are successfully Executive directors are looking to their boards to provide leadership and asking them to help in a variety of ways to sustain and strengthen passing on the practice of philanthropy to future ” the organization. Increasing innovations and efficiencies Seizing opportunities to adapt to the changing times generations of the family | Wisconsin State of Philanthropy 2009 and explore new means to reduce operating expenses and more effectively serve clients and the community. -Family Foundation Trustee Advocating for the social sector Funders, nonprofit executives and board members are speaking up to educate stakeholders, including policymakers and local media, about the importance and contributions of the charitable sector to the state’s local economies and quality of life. 27

referenCeS and reSourCeS About the Report DFW Board of Directors about the WiSConSin 100 survey data is not representative of this group of founda- • Eileen Connolly-Keesler, Oshkosh Area The Wisconsin 100 survey was designed to provide a tions. Efforts have been made throughout the report to Community Foundation snapshot of the giving trends through surveying a pur- indicate where this representation of very small founda- • Curt Detjen, Community Foundation poseful sample of Wisconsin foundations. The Donors tions is lacking. for the Fox Valley Region, Inc. Forum chose to study foundations only since unlike individuals or corporate giving programs, foundations about the donorS forum of WiSConSin • Scott Gelzer, The Faye McBeath Foundation are required to submit the IRS Form 990-PF each year, The Donors Forum of Wisconsin (DFW) is a professional • Cecelia Gore, Jane Bradley Pettit Foundation and their giving trends can be studied on a large scale membership association of foundations, corporate giv- (total assets, total giving, etc.). However, if one would ing programs, and other grantmaking organizations. Its • Lynn Heimbruch,Northwestern Mutual like to know more detailed information, or anything that mission is to support and promote effective philanthro- Foundation may not concern the IRS but would concern grantees or py. DFW represents over 130 members organizations • Ed Hinshaw, Richard & Ethel Herzfeld other grantmakers, the Form 990-PF is inadequate. The who contribute over $185 million, which accounts for Foundation Wisconsin 100 survey was designed to create a dynamic over 47 percent of all grants distributed in Wisconsin. • Jody Lueck, Mercy Works Foundation knowledge base of current and detailed information on They also represent over $2 billion in assets, which ac- Wisconsin foundations. counts for over 45 percent of all foundations assets in • Jim Marks, Greater Milwaukee Foundation the state. • Mary Anne Martiny, Harley-Davidson Foundations in Wisconsin range in assets from under $1 million to over $100 million. The majority of foun- For over 30 years DFW has been Wisconsin’s resource Foundation dations in Wisconsin are very small—57 percent have for philanthropy and is focused on four key areas: • Robin Mayrl, Helen Bader Foundation under $1 million in assets. For the Wisconsin 100 survey, community leadership, networking, knowledge and professional development. • Sally Merrell, von Briesen & Roper, s.c. the Donors Forum chose to primarily study foundations with assets of over $1 million, in order to examine DFW is one of over 30 staffed regional associations of • Anne Summers, Brico Fund, LLC the trends affecting the largest foundations in the state, grantmakers operating in cities, states and multi-state • Casandra Tate Mahoney, Tate Family and to gather information from a greater proportion of regions across the U.S. It is a member of the Forum Foundation Wisconsin’s assets with a limited sample size. In total, of Regional Associations of Grantmakers, the national survey respondents account for nearly 45 percent of the • Karen Wilken, Kern Family Foundation organization that connects the regional associations and total assets of foundations in the state. promotes philanthropy. The Wisconsin 100 survey was based upon a survey about the fundinG information Center DFW Staff conducted annually by the Ohio Grantmakers Forum. DFW’s survey was distributed to approximately 300 Marquette University’s Funding Information Center is • Deborah Fugenschuh, President foundations, with 107 responding. Controlling for asset one of over 300 national cooperating collections of the • Samantha Dennis, Director of Communications size, random selection was employed to select approxi- Foundation Center in New York City. The Center has | Wisconsin State of Philanthropy 2009 and Member Relations mately two-thirds of the foundations that received the participated as a cooperating collection since 1973. • Rosemary Lillich, Director of Programming survey. The remaining third were made up of Donors Since its establishment in 1956, the Foundation Center and Special Initiatives Forum members. The respondents skewed heavily to- has been the primary source of factual information on ward DFW members, with 25 percent of the respondents private foundations and philanthropy in the United • Emmy Hall, Manager of Research and being nonmembers . As the sample was not completely States. The Foundation Center, along with its coop- Administration randomized, we are reluctant to extrapolate our findings erating collections, is designed to provide current • Connie Van Wagenen, Accountant to be representative of all foundations in the state. information for the fund-seeking public and those doing research on private foundations, philanthropy, nonprofit • Molly Szymanski, Research Intern Since the survey was not distributed to a large proportion of foundations with assets under $1 million, the organization and management, volunteerism, fundrais- 28 ing, grantmaking, and letter and proposal writing.

This report was graciously underwritten by For additional copies of this report, please contact DFW. Donors Forum of Wisconsin 759 N. Milwaukee Street, Suite 515 Milwaukee, Wisconsin 53202 P. 414-270-1978 F. 414-270-1979 dfwonline.org

Wisconsin Stateof Philanthropy Report 2009 by DFW

by litlelady9

Accessibility

Categories

Upload Details

Usage Rights

2 Embeds 3

Statistics

Wisconsin Stateof Philanthropy Report 2009 by DFW Presentation Transcript

http://www.linkedin.com	2
http://www.slideshare.net	1