Decline in 2009 Foundation Giving Steeper Than Anticipated

Continued Reductions Expected in 2010

Foundation giving will likely decline by more than 10 percent in 2009, closer to the higher end of the 8 to 13 percent range estimated by the Foundation Center earlier this year. According to September 2009 survey findings released today in Foundations’ Year-end Outlook for Giving and the Sector, foundation giving will also decline further in 2010, as previously predicted by the Center.

Despite reduced resources, more than three-quarters of the close to 600 respondents to the new survey expect that the field of philanthropy will become more strategic as a result of having weathered the crisis. The focus of long-term changes range from governance to grantee relations to investments.

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

Most grantmakers believe that the economic crisis will actually strengthen the nonprofit sector. Some recommend that nonprofits pursue more creative fundraising strategies and less traditional sources of support, such as revenue-generating activities; develop concrete sustainability plans; and collaborate more. However, some funders expressed concern that nonprofits were not using the recession as an opportunity to review and rethink their activities.

“Our survey found that many foundations have made difficult strategic choices as a result of the economic crisis, including reducing staff,” said Steven Lawrence, senior director of research at the Foundation Center and author of the advisory. “They expect that their grantees will be similarly committed to restructuring their operations to reflect the new reality.”

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 challenging 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 $427 million to date.