Boston Foundation Sets New Record for Grants in 2004

Boston –The Boston Foundation distributed $56,613,611 to nonprofit organizations in 2004, surpassing last year’s grants by more than $8 million and exceeding all previous records for grants made to nonprofit groups in Greater Boston and around the country. Donations to the Foundation, at $49,665,464, were the third highest in the Foundation’s history.

Paul S. Grogan, President and CEO of the Boston Foundation, affirmed the Foundation’s commitment to providing strong funding and reliable support to the nonprofit community, especially at a time when many are suffering from diminished support from state and federal programs.

"We’re sending a strong message to the community that the Boston Foundation, now in its 90th year, will continue to honor the original intent of our founders to create a permanent fund for the benefit of the community we serve, the Greater Boston region," said Grogan. "Today, the Foundation remains a force for positive social change, making grants that support fresh ideas, encourage innovation, and meet social needs. Best of all, with assets that now stand at $675 million, we’re able to reinforce our support to the nonprofit community through a range of ‘beyond grantmaking’ activities, such as generating fresh research, and holding forums where the challenges and opportunities facing us are vigorously debated and solutions are forged."

The Foundation also had a very strong year of fundraising in 2004, bringing in $49,665,464 in new gifts, compared to $44.1 million in the previous year. Sixty new charitable funds were established at the Foundation, compared to 41 the year before, with the size of the new funds ranging from $10,000 to nearly $5 million.

"We feel that the dramatic increase in the donations coming into the Boston Foundation is a strong endorsement of our increased emphasis on high-impact philanthropy," said Grogan. "As one of New England’s largest grantmakers, we are working in close partnership with our donors to focus resources on the region’s most critical challenges. It’s gratifying to see so many donors coming to us who want to play an active role in their charitable giving, supporting programs in affordable housing, education reform and job training, as well as promoting public safety, nurturing the arts, and increasing voter participation. These activities enrich the lives of all the members of our community."

The fastest growing fund segment at the Foundation – which holds more than 750 separate charitable funds – is donor advised funds, established by individuals who wish to be actively involved in the grantmaking process. This year, donor advised funds accounted for $40,591,780 of the total gifts to the Foundation. These funds operate like personal or family foundations, and donor-advisors to these funds may recommend grants to qualified nonprofit programs and organizations anywhere in the U.S. or overseas. Boston Foundation donors with Advised Funds, for example, contributed more than $200,000 for tsunami relief efforts following the recent earthquake.

A number of first-time donors cite the Foundation’s capacity to accept complicated gifts as a factor in their decision to establish funds at the Boston Foundation. "We received a gift of Florida real estate valued at $3.2 million from a donor who wanted to make one gift transaction and support multiple charities," said Ruben Orduña, Vice President for Development. "We’re also seeing more gifts of restricted securities, which is a signal that the ‘Venture Capital/Entrepreneur’ world is showing promising signs of life. That’s a positive trend for the entire community." Orduña said that the overall performance of the stock market was a factor in generating more gifts of appreciated securities.

Grogan credits the Foundation’s strong partnerships with its donors for making this year "innovative, fun, prosperous, just, sustainable, and above all, alive. We are very grateful to our co-partners in our work – our donors – who are more active and engaged than ever." At the same time, he pointed out, enormous problems remain, such as a continued high level of poverty, the housing crisis, and the shortage of skilled labor on many sectors of the community.

Another area of tremendous growth is the Foundation’s Civic Leadership Fund, which received a record-breaking $483,336 this year. Launched in 2002, when it generated $98,875, the Civic Leadership Fund is a pool of resources used to support the ‘beyond grantmaking’ activities of the Foundation, such as commissioning fresh research about Boston’s most serious challenges, encouraging cross-sector partnerships and task forces, and convening diverse groups of people to discuss compelling issues and create action agendas for social change. "The increased visibility of the Foundation in the community has been a key to securing support for this purpose," Orduña noted. "More and more people are aware of the Foundation’s civic leadership, and they obviously approve of that work, indicated by the tremendous success we’ve had meeting our goals for the Fund." Richard DeWolfe, Co-Chair of the Fund and Foundation board member, has set the goal for next year at $600,000.

Donations to the Foundation’s discretionary funds, which are the primary funds that nonprofit organizations may apply for in their grant search, increased by $2,015,229 this year. The largest discretionary fund the Foundation holds is the Community Fund, an unrestricted fund that focuses its grantmaking in the Greater Boston area. Donors to this fund can create a named endowed fund within the Community Fund, essentially hiring a staff of experts to maximize the impact of their gifts, or they can support their favorite concerns by establishing field of interest funds, in areas such as education or health care.

Designated funds, which received gifts of $7,058,455 this year, are set up to support specific nonprofit organizations in perpetuity. These funds support some of Boston’s most important institutions, such as the New England Aquarium, Rosie’s Place, and the United Way. All grants are approved by the Foundation’s Board of Directors.

Planned giving, which includes bequests, charitable remainder and lead trusts, gift annuities and other vehicles, saw a tremendous amount of activity, with $9.4 million in gifts this year, versus $2.5 million in 2003. Increased outreach to the professional advisor community has also helped to position the Foundation as the region’s philanthropic partner for many individuals and families.

A number of inquiries also came in from private foundations interested in establishing a relationship with the Boston Foundation, with proposals ranging from mergers to grantmaking partnerships around areas of mutual interest. "By merging, private foundations can virtually eliminate their expenses and administrative tasks," said Orduña. "It’s interesting to note that all of the inquiries were made by successor generations, which is a strong indication that the much-anticipated transfer of wealth to the baby boom generation is beginning."

Total Foundation grant expenditures for the year are determined by a spending rule, which requires an annual amount of money to be set aside for grant outlays. The current rate is 5% of the Foundation’s net investment assets, as measured by the average value of those assets over a sixteen-quarter period ending the prior December 31st. The Foundation itself is currently functioning on an operating budget that is smaller than the Foundation had four years ago as further evidence of its commitment to putting more dollars into the community.

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The Boston Foundation, one of the nation’s oldest and largest community foundations, has an endowment of almost $675 million, made grants of $51 million to nonprofit organizations, and received gifts of $41 million last year. The Boston Foundation is made up of 750 separate charitable funds, which have been established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a civic leader, convener, and sponsor of special initiatives designed to build community. For more information about the Boston Foundation and its grant making, visit www.tbf.org , or call 617-338-1700.