Foundations and endowment funds: resilient and innovative in the face of the health crisis
The Fondation de France has published the 2021 Annual Philanthropy Barometer conducted by the Philanthropy Observatory. Whilst the Covid-19 pandemic has turned our entire society upside down, this edition highlights the buoyancy of the foundations and endowment funds sector, which currently comprises 4,700 active organisations. This year’s report focuses on the impact the crisis has had on foundations. With innovation and agility, they have swiftly implemented targeted measures to support the most affected communities.
The vitality of the philanthropy sector remains undiminished
In 2020, the foundations sector continued to grow at a steady pace (+5% year-on-year). The number of active foundations and endowment funds increased by 239. In total, there are 2,700 active foundations and nearly 1,950 active endowment funds.
Foundations, which held €29.5 billion in assets in 2019, committed €11.6 billion to the public good in 2019.
The assets held by endowment funds, meanwhile, were valued at between €1.6 and €2.1billion, and their resources at between €260 and €310 million in 2019. Their annual expenditure amounted to between €240 and €320 million.
Most foundations and endowment funds showing active resilience in the face of the crisis
In 2020, a quarter of them expanded their activities, particularly organisations managing hospitals and care homes. However, around two in five had to scale back their activities, with 28% of them even having to suspend them altogether.
The foundations and endowment funds surveyed were more likely to have seen an increase in their expenditure (+34%) than in their resources (+23%), due to the rise in the amounts committed to carrying out their public-interest initiatives. And this trend is set to continue, with nearly a third of foundations and endowment funds having already planned, beyond 2020, to increase their expenditure in response to the crisis.
One thing is clear: 85% of foundations and endowment funds maintained the grants they had planned to pay to their beneficiaries. This is a strong sign of the support they were determined to provide to charities during this period.
“Despite the crisis, the growth in the number and activities of foundations and endowment funds demonstrates the exceptional and unwavering commitment of the philanthropic sector to addressing the health and social emergencies we are facing; in such a turbulent context, philanthropic engagement has demonstrated not only its relevance, but also its capacity for innovation and adaptation to priority needs. Having responded to the emergency, these funds and foundations are already working to refocus their strategies to adapt to the challenges of the post-Covid world.”
Axelle Davezac, , Chief Executive of the Fondation de France
Foundations and endowment funds adapting to new challenges
The sector has demonstrated its adaptability, with foundations successfully innovating by developing new initiatives, particularly those aimed at children and young people. Next come people facing financial hardship, older people, families, and people who are ill or have a disability. Social welfare remains the priority area of intervention.
Almost all those that have launched new initiatives or partnerships plan to continue them beyond the crisis. For example, the Primonial Group Foundation and the BNP Paribas Foundation, both fostered by the Fondation de France, will continue, respectively, to support young people experiencing psychological distress and to assist charities working on behalf of the most vulnerable.
Finally, four in ten foundations plan to undertake a strategic review based on the lessons learnt from their work during the health crisis. One example, the Autonomia Foundation, has revised its strategy for supporting isolated and dependent people who have lost access to care.
The sector is thus demonstrating its ability to refocus in the face of new challenges.