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As economic crisis deepens, private foundations step into the breach

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•The GE Foundation, General Electric’s philanthropic arm, donated $10.5 million to United Way of America, the largest single commitment for shelter assistance and homeless services so far.

“The typical way a foundation responds [during an economic downturn] is by trying to hold giving as stable as possible, but some have made exceptional commitments,” says Steve Lawrence, senior research director at the Foundation Center, in New York.

The center is monitoring daily the philanthropic community’s response to the crisis on an interactive website (foundationcenter.org/focus/economy).

The future remains cloudy for foundations themselves. A survey by the Chronicle of Philanthropy released last month found that many had lost almost one-third of their assets. Of the 73 grantmakers that provided data for 2009, 39 foundations plan to decrease their contributions this year, 22 say their grantmaking will stay about the same, and 12 plan an increase. Some are cutting back on travel, conferences, and staffing.

Overall giving will probably be down in 2009, says Dr. Lawrence, and there could be an even bigger negative impact in 2010. Large foundations determine grant budgets based on a rolling average of asset values over a three to five year period.

“While 2008 was a bad year, 2007 was good, but we may run out of good years,” Lawrence explains. “It depends on how the market fares.”

Community foundations have clearly taken the lead in responding to needs for human services in their local areas.

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