Posted on November 5, 2009

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Drop in Foundation Giving May Be Steeper Than Anticipated, Report Finds

A new research advisory from the Foundation Center suggests that foundation giving will decline by more than 10 percent in 2009, a bit closer to the high end of the range estimated by the center earlier this year, and that it will fall further in 2010.

Based on a September follow-up survey of large U.S. foundations, the advisory, Foundations' Year-End Outlook for Giving and the Sector (5 pages, PDF), found that about 70 percent of the nearly 600 respondents said they expect to distribute what they had budgeted for grants earlier this year, while 20 percent said they would give less than the budgeted amount and only 11 percent said they expected to give more. In addition, more than two-thirds of respondents said they had reduced their operating expenses since the beginning of the financial crisis, with just over half reporting that they had frozen or cut salaries and 20 percent saying they had eliminated open staff positions, laid off staff, and/or offered staff buyouts and early retirement packages.

The advisory also found that more than three-quarters of foundations said they expect the field of philanthropy to become more strategic as a result of the crisis, citing possible long-term changes in governance, grantee relations, and investments, while most agreed that the nonprofits that survive the crisis will emerge stronger than before. Still, some funders expressed concern that nonprofits were not using the crisis as an opportunity to review and rethink their activities.

"Foundations will be giving less than they expected at the beginning of the year," said Foundation Center president Bradford K. Smith. "But many are rethinking their grantmaking so that fewer dollars will not necessarily mean less impact."

The advisory is the latest in a series of advisories released as part of the Foundation Center's Focus on the Economic Crisis project, which offers a variety of resources designed to help nonprofits and foundations deal with the challenges of a tough economic environment.

“Decline in 2009 Foundation Giving Steeper Than Anticipated, According to New Foundation Center Survey.” Foundation Center Press Release 11/04/09.

Primary Subject: Philanthropy and Voluntarism
Secondary Subject(s): Economic Crisis
Location(s): National

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