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Private Sector Contributions to Faith-Based Social Service: The Policies and Giving Patterns of Private Foundations

Category: Public and Private Funding

Document Type: Report

Recently there has been a renewed interest in the role of faith-based organizations (FBOs) in the provision of social services. While a considerable amount of attention has been focused on efforts to financially support FBOs with public funds, relatively less attention has been given to the prospect of private sector funding. Private foundations may serve as an important source of financial support as FBOs seek to diversify their funding streams and provide sustained relief to address unmet human needs. This report examines how private and community foundations support the social services provided by FBOs and also explores the policies that guide these funding decisions.

Using data from the Foundation Center we developed a sample of 2,740 private independent foundations and 230 community foundations with total annual giving of $1,000,000 or more. Approximately 12 percent of these large private foundations indicated an expressed interest in funding both social services and religiously affiliated organizations. The report continues by examining the grants issued by the 50 largest "faith-friendly" foundations. The analysis was based on a composite year consisting of data from 1999 and 2000, the latest years for which full grant data were available. Some $68.8 million dollars were provided by these private foundations to support faith-based social services. This represents nearly 3 percent of the approximately $2.5 billion in total annual philanthropic giving distributed by these 50 foundations. Each foundation made an average of 17 grants to faith-based providers during the year, with the average award totaling $75,462. Additional analyses classified grants according to the social service areas that were supported.

The report also analyzed the published restrictions by foundations that would exclude grants to FBOs. The analysis found that most foundations do not have general restrictions that would exclude religiously affiliated social service providers. Among those foundations that had published limitations on religious grantees, the most common restrictions limited the funding of sectarian or expressly religious activity. The analysis also found that the largest community foundations were more restrictive in their policies relative to the largest private independent foundations. The report concludes with some suggestions for future research in light of these findings.

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Publisher: The Roundtable on Religion and Social Welfare Policy

Publication Date: 06/22/2003

Number of Pages: 26