Grantmaking by U.S. foundations has big short-term and long-term impacts on the economy, a new report says.
Foundation grants totaling $37.85 million in 2010 generated nearly 500,000 jobs immediately, a total that grew to nearly 1 million within a year and to at least 8.8 million over the long-term, says the report by The Philanthropic Collaborative.
Those grants also generated nearly $970 billion in goods and services, and contributed over $570 billion to the U.S. gross domestic product, based on long-term return on investment and economic multipliers, says the report, Economic Impacts of 2010 Foundation Grantmaking on the U.S. Economy.
“Foundation investments set off a cascade of benefits in our communities over the course of decades,” Steven Peterson, clinical assistant professor of economics at the University of Idaho and lead author of the report, says in a statement.
Foundation giving to the arts, culture and humanities alone, for example, created 73,771 direct jobs and contributed $2.58 billion in gross domestic product, the report says.
When economic multipliers are applied to those grants, it says, that support generated 127,382 jobs and added $6.97 billion to gross domestic product.
And total foundation grants in 2010, including multiplier effects, contributed $13 billion in total federal, state and local taxes, the report says.
“Philanthropy is tightly woven into the fabric of American society,” it says. “The economic benefits of grant programs can be felt for decades.”
Foundations support nearly nine million jobs in the U.S., and the nonprofit sector overall employs over $13.5 million people, or roughly 10 percent of the workforce, the report says.
Nonprofits pay nearly $670 billion a year in wages and benefits, and employ more people than the finance, insurance and real estate sectors combined, it says.
Case studies of eight community-level initiatives, the report says, document long-term economic benefits from reduced costs of juvenile crime, health care and social services; greater employment opportunities for the disabled and homeless; revitalized urban areas; and advanced longevity and quality of life from medical cures and treatments derived from scientific research.
Other outcomes, it says, include improved worker education and productivity, and a thriving environment for business.
“As complex private enterprises,” the report says, “foundations and the charitable organizations they support are — and continue to be — vital components of the U.S. economy, rather than just an afterthought or a gap-filler.”
– Todd Cohen