Professor Mehrling's study said giving could actually rise to 8 percent, a 60 percent increase, without reducing the value of foundation assets.

Based on historic growth patterns and major gifts announced since then, foundation assets should now total more than $400 billion.

From 1995 to 1999, foundation assets nearly doubled, to $449.6 billion from $226.7 billion, the report said.

Largely as a result of the bull market in stocks, foundation assets have soared in recent years.

Contributions from foundations accounted for much of the increase, reflecting huge growth in foundation assets over the last four years.

Even though foundation assets have shrunk somewhat because of weakness in the stock market and the economy, the giving continues apace.

"I would expect that the West's foundation assets will continue to grow faster than other regions, reflecting the nation's overall shift in population and assets."

From 1997 to 2003 the foundation assets have increased from $22 million to $235 million.

But the decline in foundation assets may herald widespread trouble.

Longtime friend Bernard Madoff managed foundation assets listed at over $1 billion.