Foundations Decrease Giving in 2012
In the annual study of foundations by the Chronicle of Philanthropy the results show that most U.S. foundations will decrease or flat-line their giving in 2012.
Many foundations are blaming the instability of the stock market for negatively impacting their endowments. The study shows that about $1 in $4 of foundation assets have been lost to ’08 crisis. The recovery of these assets will take approximately 3 years longer is the prediction at Commonfund, a firm which administers foundation endowments.
Each year the Chronicle studies the largest foundations in the United States. This year the total foundations analyzed was 174 with 107 completing the periodical’s questionnaire and information regarding the remaining 67 obtained through the 990 forms filed to the Internal Revenue Service.
The survey in 2010 had offered hope to grant seekers of increased giving, but of the 40 big foundations which told the newspaper they would increase their grant making in 2011, only 25 organizations actually increased their giving in 2011 from 2010. Similarly 34 grant makers predicted their giving would remain consistent but 10 of those actually decreased their giving in 2011.
Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, explains “We’ll see individual giving rebound quicker than we’ll see foundation giving rebound. Foundation giving is behind individual giving by 12 to 36 months in terms of rebounding.”
The results are a devastating blow to grant-seekers who are themselves trying to compensate for lost contributions from the 2008 economic crisis. The message needing consideration in this study is that the grant market is more competitive than ever, meaning only the strongest grant strategies will produce fruit. Presenting sloppy or generic applications or having organizational issues will doom a ministry’s opportunity to develop a funding relationship with foundations which are more narrowly focusing their giving.
Grant seekers need to be at the top of their game in this tough market, articulating to funding sources what makes their work significant and demonstrating their capabilities through metrics which show positive changes. Foundations want more than rhetoric and jargon; they want results and they want to see their funding becoming effective in their targeted funding interests. Nonprofits need to communicate how their efforts will make positive strides toward a foundation’s mission.