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CONTACT:
Cheryl L. Loe
Communications Manager
(212) 807-2415
e-mail: communications@foundationcenter.org
Web: www.foundationcenter.org

Loren Renz
Vice President for Research
(212) 807-3601
e-mail: lr@foundationcenter.org
Web: www.foundationcenter.org


Foundation Center Releases Report on Funding
Climate Post-9/11

Report Assesses Impact of 9/11 Response vs. Economic Downturn

GRANTMAKERS ANTICIPATE STABLE GIVING LEVELS FOR 2002

September 9, 2002. New York City. The Foundation Center has released a new report examining the impact of foundations' and corporations' response to the September 11 tragedy on their overall giving. The report also evaluates the relative impact of the 9/11 response versus the stock market decline and 2001 recession on giving patterns and practices. The report, Assessing the Post-9/11 Funding Environment: Grantmakers' Perspectives, is based on a nationwide survey of 333 foundations and corporate funders—including 240 donors to 9/11-related causes—conducted recently by the Foundation Center.

"In the months following the events of September 11, nonprofits were concerned that the unprecedented response by foundations and corporations would reduce giving for other programs and lead to changes in grantmakers' priorities," commented Loren Renz, the Center's vice president for research and author of the report. "This study tested these assumptions and teased out the relative impact of other factors affecting prospects for giving in 2002."

The report is one component of a multi-year initiative undertaken by the Foundation Center to create a definitive record and tell the story of institutional philanthropy's response in the aftermath of 9/11. The Annie E. Casey Foundation provided the lead grant in support of this initiative.

Copies of Assessing the Post-9/11 Funding Environment can be accessed at no charge from the Foundation Center's Web site at http://foundationcenter.org/research/911 as a downloadable PDF file. Media representatives may request a print copy of the eight-page report by calling 212-807-2475.

Key Findings from the Survey Report

Funders tapped multiple sources for 9/11 giving. More than half (56.7 percent) of the 9/11 donors in the sample made at least a portion of their relief and recovery giving from their annual grants budgets, nearly one-third (31.7 percent) tapped discretionary funds, and 13 percent used existing or newly created employee matching gift funds. Community foundations cited donor-advised funds as one source of support.

Relief and recovery funding did not undercut funding for other programs. Even though grants budgets were the most common source of 9/11 pledges, relief and recovery support did not reduce support for other programs. After contributing to the 9/11 response, only one in six respondents (15.8 percent) reduced their support for other programs; fewer than one in ten (9.2 percent) cut back on the amount of year-end 2001 giving.

Foundations and corporations supported a multi-purpose, long-term approach to crisis response. While a large majority (77.3 percent) of 9/11 funders intended that their donations be used in part for aid to victims and their families, a substantial number also supported recovery and rebuilding efforts (44.2 percent), relief for workers who lost their jobs (34.2 percent), assistance to local nonprofits that were displaced or lost revenue (21.3 percent), disaster preparedness (15.0 percent), and various social and political issues related to the 9/11 attacks (14.6 percent).

Most grantmakers did not shift their giving priorities after 9/11 or start new programs. To the contrary, more than nine out of ten respondents (94.6 percent) indicated no change in programmatic focus. In fact, many who commented said they were more focused on existing program priorities after 9/11 as a result of the worsening economy and the fragile fiscal health of many of their grantees.

Similarly, most grantmakers did not change their grantmaking strategies. Among the modest 9 percent citing changes, some were responding to the needs of nonprofits in the shaky post-9/11 environment, while many others were reacting to the constraints caused by their shrinking endowments. In their comments, grantmakers emphasized that it was the stock market slide—starting well in advance of September 2001—and not the 9/11 crisis that was driving changes in grantmaking practice and clouding prospects for giving.

Despite substantial asset losses, most grantmakers did not reduce year-end 2001 giving. Fewer than one in four respondents (24.3 percent) cut back on fourth quarter giving in response to the accelerated drop in stock values following 9/11. The impact of the market tumble was more pronounced for community and other public foundations, which rely on support from the public.

Compared with 2000, many grantmakers increased their giving in 2001. Among survey respondents, nearly 38 percent increased giving, 31 percent maintained giving levels, while a smaller 28 percent reduced giving. For some funders (especially major corporate donors), the 2001 increases may represent exceptional giving related to 9/11.

Grantmakers overall expect stable giving levels for 2002; future projections are more pessimistic. Despite fears about the sluggish economy and their shrinking endowments, grantmakers overall expect to keep their giving on an even keel through 2002. Although close to 31 percent of respondents expect giving to drop, they are outweighed by a larger 37 percent who expect giving to remain stable and an additional 23 percent who expect it to increase. Regardless of this year's outlook, nearly all respondents were worried about their ability to fund programs adequately in 2003 and beyond.

About the Foundation Center

The Foundation Center's mission is to support and improve institutional philanthropy by promoting public understanding of the field and helping grantseekers succeed. To achieve its mission, it: collects, organizes, and communicates information on U.S. philanthropy; conducts and facilitates research on trends in the field; provides education and training on the grantseeking process; and ensures public access to information and services through its World Wide Web site, print and electronic publications, five library/learning centers, and a national network of cooperating collections. Founded in 1956, the Center is the nation's leading authority on institutional philanthropy and is dedicated to serving grantseekers, grantmakers, researchers, policymakers, the media, and the general public.

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