Foundation assets have soared to an all-time high as grant makers face pressure to increase payout rates and staunch the bleeding from federal funding cuts.
FoundationMark, which analyzes foundation investments, estimates that assets stand at $1.68 trillion, topping the $1.62 trillion recorded at the end of 2024. That’s also 15 percent higher than the $1.46 trillion in endowments at the close of 2023.
The stock market’s strong run over the past two years has helped push grant maker assets to this new level. The result will be increased giving in 2025, says FoundationMark CEO John Seitz, even if foundations do nothing more than meet the legally mandated 5 percent payout.
“It’s good news,” Seitz adds. “The past 36 months have been pretty good.”
During this strong market, foundations have recorded solid, if not spectacular, gains. In 2024, they notched double-digit growth in their investments for the second year in a row, according to a new report from Commonfund and the Council on Foundations. Last year, private foundations’ investment returns climbed 10.3 percent from 2023. Community foundations saw an 11 percent return.
Both those numbers lagged market performance — a frequent occurrence cited by critics of foundation asset management. The S&P 500 Index, for instance, was up 25 percent in 2024, more than double the foundation returns.
“It’s good that they got 10 percent, but they definitely underperformed,” Seitz says. Even conservative stock portfolios with 40 percent invested in bonds netted gains of about 15 percent, he added.
But the positive returns follow pandemic volatility that included a steep falloff in 2022. They signal a welcome stabilization, according to the report. It did not directly address the challenges facing the nonprofit sector this year in the face of federal cuts and economic uncertainty. But the “strong results … may serve as a buffer” in the event of future funding issues, noted council president Kathleen Enright and Commonfund Institute executive director George Suttles.
The new data arrives as funders big and small are promising to increase their endowment draw to boost grant making this year in light of federal cuts and other challenges. Among them: the Freedom Together Foundation, which is doubling its payout to 10 percent of assets; the Weissberg Foundation (10 percent); and the John D. and Catherine T. MacArthur Foundation (6 percent).
A coalition of philanthropy-service organizations, including Grantmakers for Effective Organizations, the National Center for Family Philanthropy, and the Trust-Based Philanthropy Project, is calling on funders to increase their grant-making budgets for the next four years. Among other things, it urges donors to consider increasing giving at the same rates as their endowments are growing, whether that’s 10 percent or more.
“Whatever your current payout rate is, consider how you can increase it, even temporarily,” the groups write in an online petition.
