New York Times:  Tax Laws Popularize the Small Foundation, by Geraldine Fabrikant:

The number of smaller foundations and other charities… has exploded recently. According to the Urban Institute’s National Center for Charitable Statistics, there were 76,849 private foundations — of all sizes — at the end of 2005, the latest year for which data is available. That represents a 49% increase over the number in 1995.
Still, the amount of money in most private foundations is often minuscule. In fact, at the end of 2005, 67% of all private foundations had assets of less than $1 million and 27% had assets of $1 million to $10 million.

Timothy Walter, chief executive of the Association of Small Foundations, with 3,100 members, said the acceleration in the formation of foundations is directly linked to the increasing wealth in the stock market as well as an “awareness that a private foundation gives you flexibility in when and how you give away money.”

Changes in the tax laws in the 1990s have also played a role. Thomas E. Chomicz, a lawyer who specializes in charitable organizations at Quarles & Brady in Chicago, said that the law now allows donors to deduct the fair market value of public stock transferred to a private foundation rather than just deducting the cost of the stock.