August 9, 2017

Grantmaking Capacity of New Mexico Foundations in Comparison to Other Southwestern States

Every state has a unique philanthropic story that is intertwined with the different populations and resources it houses. These differences should be recognized when assessing philanthropic progress for each state. This article takes a closer look at New Mexico’s philanthropic story, specifically the grantmaking from our local foundations, and compares its progress with six other southwest states. In a recent report, “The 2016 Giving Study,” Philanthropy Southwest sheds light on philanthropic trends within a seven-state region, including New Mexico, Arkansas, Arizona, Colorado, Nevada, Oklahoma, and Texas over the course of a four-year period (2011-2014). The study looked at grantmaking by active foundations (independent, community, and healthcare conversion) headquartered within each state and gathered data on all of their grants and contributions above $1,000. Importantly, grants include those awarded within the state and outside its borders. Results show positive recent philanthropic growth for New Mexico and shows New Mexico with leading percent increases in giving when compared with the other seven states.

This study inspired us to dig deeper to uncover more specific details around New Mexico’s philanthropic story and to review New Mexico’s road to recovery since the 2007-2009 economic downturn that occurred in the U.S. (For more background, previous articles that The Grant Plant has published around this topic are listed in a note at the end of this article).

Before we wade into data, let’s first consider some basic differing characteristics that may impact the philanthropic landscape of the southwest states that are assessed. This does not include every state assessed but illustrates key dynamics in the philanthropic backdrop of a specific state.

  • New Mexico has the lowest population of the seven states (2,083,024 in 2014, as compared to Nevada, the second lowest at 2,833,013) and is the only state in the southwest listed on Foundation Center within the bottom 10 in the nation in terms of foundation giving.
  • Texas has the largest population of the seven states (26,944,751 in 2014, as compared to Arizona, the second closest, at 6,719,993) and is the only state in the southwest listed on Foundation Center within the top 10 in the nation in terms of foundation giving.

 

Broad statewide statistics

Philanthropy Southwest’s Giving Study reports that New Mexico had the highest percent increase in giving from 2011-2014 (37.2%) when compared to the other six southwest states. To further unpack this revelation, we looked at philanthropic trends using Foundation Center data, which includes 2007 data and includes information for all U.S. foundations (independent, corporate, community, and operating) that reported giving in their most recent fiscal years. Foundation Center gathers data through surveys of the nation’s largest foundations, foundation websites and other public reporting, and from IRS information returns. Calculations from this data confirmed a notable increase in total foundation giving for New Mexico during the 2011-2014 timeframe.

But how has New Mexico giving fared since its giving peak prior to the economic downturn? Would New Mexico still lead the seven states in foundation giving increases if that timeframe was accounted for?

To try and gauge philanthropic progress since the economic downturn that began impacting most foundations in 2008, we assessed the change in foundation giving from 2007-2014. This seven-year time period shows that annual foundation giving in New Mexico still increased, but at a much lower percentage: state giving in 2014 was only 2.2% higher than that of 2007—while the seven-state Giving Study region as a whole enjoyed an increase of 23.1%.

Those results indicate that New Mexico is just now passing its pre-economic downturn giving levels and show that New Mexico is the state with the lowest percent increase from 2007-2014 when compared to the other six southwest states. Tables 1 and 2 below show giving levels per state and the percent change in giving over the 2011-2014 and 2007-2014 timeframes.

Table 1. Total dollars granted by state, as reported by the Giving Study and Foundation Center.

Chart 1: Percent increase in Foundation Giving from 2011-2014 and 2007-2014.

 

Per Capita Giving Considerations

One way to further compare grantmaking levels and trends in states is to account for each state’s population by calculating giving per capita. Foundation Center data was used to calculate foundation giving per capita for the seven southwest study states. New Mexico lags its neighbors in per capita grants made by local foundations. As shown below, 2014 private foundation giving was $45.09 for every state resident in New Mexico versus much higher per capita grant funds for other states. Arkansas, which serves a relatively small population and is home to a relatively low number of Foundations, was at the other end of the spectrum, giving $235.61 for every state resident; but, worth noting, is that one of Arkansas’ foundations is Walmart Foundation, a notable national funder that likely impacts Arkansas statistics.

Chart 2. Private and Community Foundation Grant Spending per State Resident, 2014.

Looking at changes over time, foundation giving per capita in New Mexico decreased 3.4% over the 2007-2014 time period. This indicates that per capita giving was slightly higher in New Mexico before the economic downturn. When compared to the other six southwest states, New Mexico has the worst change in percent for grantmaking per capita from 2007-2014 (and is the only state to show a decrease in change in per capita giving over the 2007-2014 timeframe). Table 2 (below) shows giving levels per state and the percent change in per capita giving over both timeframes.

Note: Importantly, Foundation Center data only measures the total giving for foundations, regardless of whether funds were invested in state, out of state, or even out of the country. As such, per capita calculations should not be considered a reflection of local foundation investment within home states, but rather a reflection of general foundation grantmaking power in relation to state population. This could be a case-in-point for Arkansas; as mentioned, the Walmart Foundation is located there, and it largely invests outside its home state.

Table 2. Total dollars granted per capita in the seven southwest states (Foundation Center data).

Per Foundation Giving Considerations

A third way to examine philanthropic giving is to account for the number of foundations within each state and calculate the ratio of giving per foundation. Foundation Center data was used to determine this information for the seven southwest study states.

New Mexico and Arizona have the most modest giving with annual grant averages under $400,000 per foundation each year. Looking across time, New Mexico had one of the highest percentage increases in giving per foundation comparing 2011 and 2014 (increasing 38.1%), but that steep climb didn’t offset the prior recession decline, leaving New Mexico with the worst percent change for the longer period comparing 2007 to 2014 (decreasing 4.5%). New Mexico giving per foundation is still below the pre-recession levels. Table 3 below shows per foundation giving per state and the percent change in per foundation giving over both timeframes.

Table 3. Total dollars granted per foundation in the seven southwest states (Foundation Center Data).

A Closer Look at New Mexico Data

The data presented above shows that New Mexico experienced positive philanthropic progress between 2011-2014; however, total dollars granted, per capita giving, and per foundation giving remain depressed compared to pre-recession levels. New Mexico is just now beginning to recover. Consider the following, drawing from all of the charts:

  • From 2011-2014, New Mexico experienced a 38.1% increase in giving per foundation and a 41.7% increase in total foundation giving.
  • From 2007-2014, New Mexico experienced a 4.5% decrease in giving per foundation, a 3.4% decrease in dollars granted per capita, and only a 2.2% increase in total foundation giving.

This data suggests that there were some big decreases in New Mexico foundation giving that occurred between 2007-2011. To refine our understanding, we pulled Foundation Center data for each year from 2007-2014 along with foundation assets (which reveal the base upon which foundations release funds for grantmaking). We also calculated the ratio of grantmaking to assets to see how much foundations were giving in grants in relation to their holdings. Table 4 below shows giving data from 2007-2014, revealing that New Mexico foundation giving decreased from 2008-2010 (with a shocking drop of about $18,600,000 from 2009-2010), started to increase in 2011, but did not reach the pre-economic downturn giving level until 2014. Giving was at its lowest point in 2010. While New Mexico foundation assets decreased in 2008 and 2009, and started to increase in 2010, they did not reach the pre-economic downturn asset level until 2013.

Our local foundations dug deep during the worst years, tapping the highest proportion of assets to make grants during 2007-2009. Private foundations are federally required to meet or exceed an annual payout requirement (i.e., making grants) of 5% of the average market value of its net investment assets. But we see New Mexico’s grants-to-asset ratio climb to 7.2% in 2009, when foundation assets were at their lowest – truly an admirable investment from our area foundations to help the nonprofit sector during lean times.

Table 4. New Mexico foundation data from 2007-2014 (Foundation Center data).

Conclusions

Why do the 2011-2014 numbers show New Mexico in a positive light in comparison to other southwest states? The answer is relatively simple: New Mexico philanthropy grew significantly in 2012 as it began to come out of the recession. This growth (from 2011-2014) is better characterized as a recovery to pre-recession numbers, rather than New Mexico reaching a higher philanthropic capacity. New Mexico foundations are slowly climbing back from the impact of the economic downturn, re-building their foundation’s assets, and increasing giving levels to near those of pre-recession levels of investment in the Land of Enchantment. But New Mexico still lags behind its southwestern neighbors, experiencing the slowest philanthropic recovery (among the six other southwest states that were reviewed) since the economic downturn that began impacting foundations in 2008. Our state has the lowest per capita giving and per foundation giving among the seven southwest study states, which adds perspective to the struggles that our state encounters in meeting significant needs with philanthropic support.

The good news is that the philanthropic landscape in New Mexico is finally reaching a point of recovery and growth and we at The Grant Plant, in partnership with The Grants Collective, are ready to channel and boost this positive progress. We are passionate about helping nonprofit organizations connect with the resources they need to improve the social, economic, and education outlook in New Mexico. We will continue to help build nonprofit capacity through offering grantseeking services, professional development opportunities, shared resources, and other access to expertise.

 

Contact: Wendy McCoy, Resource Development Officer wendy@thegrantplantnm.com

Note: The Grant Plant has explored New Mexico’s philanthropic trends since the economic downturn in a series of articles that have been published in the past, including:

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