Grantmaking Foundations — Business Survival Rate
An estimated 71% of grantmaking foundations businesses survive their first 5 years, based on U.S. Census Bureau Business Dynamics Statistics. The annual business closure rate is 6.6%.
Is Grantmaking Foundations a Good Business to Start?
With a 71% five-year survival rate, grantmaking foundations has an above-average survival rate compared to the national average of roughly 50%. This makes it a relatively safe industry to enter — businesses here tend to find stable demand and sustainable economics.
The annual exit rate of 6.6% is lower than many sectors, suggesting that once established, these businesses have staying power. That said, lower failure rates often correlate with higher barriers to entry or established competition.
Entry vs. Exit Rates
Annual rate of new businesses opening versus existing businesses closing.
Net positive: more businesses opening than closing (+2.0 pp spread).
Job Creation & Destruction
The industry is adding jobs faster than losing them — a positive sign for both workers and new business owners looking to hire. Total employment: 218,140 workers across 18,884 firms.
Want to know how much grantmaking foundations businesses actually make?
See full revenue benchmarks for Grantmaking Foundations →Frequently Asked Questions
- What percentage of grantmaking foundations businesses fail?
- Approximately 29% of grantmaking foundations businesses fail within their first 5 years. The annual closure rate is 6.6%, with 1,009 firms closing permanently in 2023.
- Is the grantmaking foundations industry growing or shrinking?
- The grantmaking foundations industry is currently growing with a net job creation rate of +5.3% per year. New businesses are entering at 8.6% while 6.6% close annually.
Source: U.S. Census Bureau, Business Dynamics Statistics (2023). Survival rate estimated from annual exit rates.