Close to Two-thirds of Foundations Expect to Reduce Their Grants in 2009
Funders Will Rely More on Non-grantmaking Activities to Achieve Goals, According to New Foundation Center Research Advisory
The Foundation Center
Senior Director of Research
The Foundation Center
New York, NY -- April 20, 2009. Close to two-thirds of foundations responding to a new Foundation Center survey expect to reduce the number and/or the size of grants they award in 2009. According to Foundations Address the Impact of the Economic Crisis, organizations seeking new sources of support and recently established entities will be especially challenged in securing foundation funding. The report is based on 2009 survey responses of more than 1,200 U.S. foundations.
In addition, the new survey finds that over half of respondents are reacting to the economic crisis by engaging in more non-grantmaking activities. Fully two-thirds of these funders plan to seek out more collaborations and partnerships in 2009, while roughly one-third indicate that they will be initiating more convenings. At least one out of five respondents expects to engage in more foundation staff-led activities, provide more technical assistance, offer more bridge/emergency financing, or engage in more advocacy.
"Foundations can do so much more than simply make grants," said Bradford K. Smith, president of the Foundation Center. "The important thing is for them to remain true to their values and causes and to stand by their nonprofit partners."
Other key findings from the new advisory include:
- Foundations will draw upon various resources to fund their 2009 giving -- close to two out of five respondents expect to draw at least in part on their endowments to fund grants.
- About 14 percent of respondents either have made or plan to make exceptional grants or launch special initiatives in response to the economic crisis, largely by reallocating existing grants budgets.
- Nearly one-third of respondents made operational changes as a result of the 2000-02 economic downturn that they believe better prepared them to face the current downturn, such as changes in investment strategies or reducing operating expenses.
"Foundations are not rolling over in the face of adversity," said Steven Lawrence, the Center's senior director of research and author of the advisory. "The new survey shows foundations being creative, strategic, and willing to dig deep to ensure that their agendas move forward while this crisis persists."
This Foundation Center research advisory is the latest in a series that explores the impact of the economic downturn on the nonprofit sector. The advisories and the online chart "In Their Own Words: 2009 Foundation Giving Forecast" are available at the Center's "Focus on the Economic Crisis" web page, which offers a variety of resources to help nonprofits and foundations deal with the challenges of the unstable economy. Also available there is the Center's interactive map that displays the most recent data available on U.S. foundation support for the crisis, totaling more than $175 million to date.
About the Survey
In January 2009, the Foundation Center mailed its annual "Foundation Giving Forecast Survey" to approximately 5,000 large and mid-size U.S. independent, corporate, and community foundations. The survey included questions on foundations' giving and assets in 2008, the outlook for giving in 2009 and 2010, and how foundations are responding to the economic downturn. A total of 1,243 foundations provided usable responses.
The report can be downloaded at no charge from the Gain Knowledge area of the Center's web site.
This study was made possible in part by support from The Wallace Foundation.
The Foundation Center's Research Institute is funded in part by The Wallace Foundation, which supports and shares effective ideas and practices to help institutions expand learning and enrichment opportunities. To learn more, visit the Knowledge Center at www.wallacefoundation.org.
About the Foundation Center
Established in 1956 and today supported by close to 600 foundations, the Foundation Center is the nation's leading authority on philanthropy, connecting nonprofits and the grantmakers supporting them to tools they can use and information they can trust. The Center maintains the most comprehensive database on U.S. grantmakers and their grants -- a robust, accessible knowledge bank for the sector. It also operates research, education, and training programs designed to advance knowledge of philanthropy at every level. Thousands of people visit the Center's web site each day and are served in its five regional library/learning centers and its network of more than 400 funding information centers located in public libraries, community foundations, and educational institutions in every U.S. state and beyond. For more information, please visit foundationcenter.org or call (212) 620-4230.