On a personal note...while the current state of the economy can certainly be stressful for all who work in nonprofits, I'd like to encourage you. The beauty of adding a few years to your life is that it gives you perspective. In the late 1970's and early 1980's there was a terrible recession that matched what it is we are experiencing today. I remember record unemployment, businesses going under, nonprofits struggling. It won't always be this way, things do go through cycles. Your challenge is to retain optimism and to do the best you can with what you have. I hope the articles we provide here give you good information and tools to meet the challenges before you! Bunnie
2010 Foundation Growth and Giving Estimates
A Report of the Foundation Center by
Overview, Page 1
"The worst economic crisis since the Great Depression resulted in the biggest reduction in U.S. foundation giving on record. In 2009, the nation’s more than 75,000 grantmaking foundations cut their giving by an estimated 8.4 percent, or $3.9 billion, to $42.9 billion. Since the Foundation Center began tracking foundation giving in 1975, current-dollar giving had declined in only three
years—1983, 2002, and 2003—and in each year by less than 1 percent.
Despite its unprecedented severity, the reduction in 2009 foundation giving could have been worse. According to a 2009 Foundation Center survey, roughly four out of five foundations indicated that they determine their grants budgets based primarily on their assets, with half of these funders basing their calculations on their prior year’s assets (see Foundations Address the Impact of the Economic Crisis at foundationcenter.org). Given the 17.2 percent drop in foundation assets recorded in 2008—a $117.3 billion loss—a larger reduction in giving would not have been surprising.
Several factors helped to moderate the overall decline in foundation giving. Among foundations that base their grants budgets on their asset values, more than one-quarter do so using an average of their asset values over the prior two-to-five years. During less volatile economic periods, this practice allows grantmakers to maintain more stable levels of giving. In the current period, it enabled foundations to average in the asset growth in years prior to 2008, which lessened the amount by which they had to reduce their giving in 2009."
Community Foundations, Page 7
"Historically, community foundations have tended to fare relatively better in both more and less prosperous times from having a broad pool of individual donors. Decreased giving by some donors would tend to be balanced out by increased contributions from others. Community foundations also experienced a more modest reduction in their assets in 2008 (-12.5 percent) relative to independent foundations (-19.2 percent). Nonetheless, as institutions that must raise funds, community foundations may have been particularly hard hit by the economic panic that led individuals to pull back drastically on their personal consumption and charitable contributions."
Community foundations may also face restrictions on giving through their donor-advised funds, specifically with funds stipulating that their current value cannot drop below the value of the donors’ original contributions. Especially for donor funds established in recent years, their values may not return to the level of the donors’ original contributions until the market regains all of its 2008 losses, which could take a number of years.
Despite reductions in giving, community foundations have been leaders in responding to needs generated by the economic crisis. According to a Foundation Center survey conducted at the height of the crisis in early 2009, 35 percent of community foundation respondents were engaging in special initiatives to help their communities cope with repercussions from the economic downturn, such as rising unemployment and homelessness. By comparison, about 14 percent of overall foundation respondents reported providing exceptional support related to the crisis (see Foundations Address the Impact of the Economic Crisis at foundationcenter.org). To date the Foundation Center has tracked nearly $60 million in grants and program-related investments from community foundations that specifically addressed the economic crisis (see foundationcenter.org/focus/economy)."
Read the full report at 2010 Foundation Growth and Giving Estimates (The Foundation Center)
Hello Bunnie, great blog you've started here!
ReplyDeleteHelping the less fortunate has always been close to my heart. I'm a proponent in helping NPOs in ways that are innovative and I think this will be a good place for me to interact with like-minded folk like yourself.
I will "follow" your blog so I can keep abreast. I recently started a blog to help NPOs raise funds with zero cost to the NPO and its members. You can feel free to check it out and see how it can be a huge benefit.
I look forward to learning more about you and what you do.