Private Foundation Payout Ratio, Aggregate (U.S., Annual)

## What this measures

Total qualifying distributions divided by total net value of noncharitable-use assets (Form 990-PF Part XI, line 5), over non-operating private foundations that reported a positive value. A tax year is the year a return's tax period begins; it is published once the IRS has posted the two following years of returns. E-filing became required for tax years from 2020, so the series starts there. Tax year 2021 is left out: the IRS's 2022 e-file release holds about two-thirds of the returns its own index lists, so roughly 30% of 2021 returns are missing from the public data. A year is published only when at least 97% of the returns the IRS index lists for it were read.

## Why it matters

Non-operating foundations must distribute about 5% of their investment assets a year. The aggregate ratio shows whether the sector as a whole gives near the floor or above it.

## How to read it

The series starts in tax year 2020 at 8.5%. The latest reading, for tax year 2024, is 8.0%. The high is 8.6% (tax year 2023) and the low 8.0% (tax year 2024).

## What it does not say

Large foundations dominate the aggregate. Money one foundation grants to another counts in both foundations' distributions, and foundations that pass through gifts they receive each year (many corporate foundations, and the Gates Foundation, funded by its trust) distribute many times their assets, so the aggregate reads above what foundations pay out of their own endowments; the median barely moves. Carry-overs from earlier years and a year to correct shortfalls mean a foundation below 5% in one year is not out of compliance.

## Source

IRS Form 990 series e-file returns (Form 990-PF), tax years 2020 on, read and totalled by Palanor; one return per foundation per tax year, the latest filed. U.S. Government work, public domain. Source: Internal Revenue Service.