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Decline in 2009 Foundation Giving Steeper Than Anticipated

November 10, 2009

Foundation giving will likely decline by more than 10 percent in 2009, reports the Foundation Center. Foundation giving will also decline further in 2010, it predicts.

U.S. foundation giving was not expected to rise in 2009, given an estimated 22 percent drop in foundation assets in 2008. Earlier this year, the Foundation Center estimated that 2009 giving by the nation's more than 75,000 grantmaking foundations would "decrease in the range of the high single digits to low double digits," or roughly 8 to 13 percent. It now appears likely that the decline will be on the steeper end of that range, the report explains.

Among respondents to the September 2009 survey who established a grants budget at the start of the year, the vast majority (70 percent) expect to distribute roughly what they budgeted earlier this year. However, one in five funders (20 percent) expect to give less than the budgeted amount; only about 11 percent anticipate giving more.

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."

The report can be downloaded at no charge from the Gain Knowledge area of the Center's web site.

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