Despite Asset Gains, Most Grant Makers Will Keep Purse Strings Tight in 2010 (Washington D.C.: Chronicle of Philanthropy)

The assets of most of the nation’s big foundations grew modestly last year, a welcome sign of recovery after the nation’s financial collapse eroded the wealth of most philanthropies by as much as a third, a new Chronicle survey finds.

But despite the gains, foundation officials remain wary about the future, and most plan either to decrease giving or to keep it flat in 2010.

Foundation assets rose a median 7.4 percent at the 80 large private grant makers that provided data to The Chronicle, meaning half the assets grew by more and half declined, were flat, or grew by smaller percentages.

Total assets for the foundations in the survey increased from $146.6-billion to $153.8-billion.

While the 80 foundations are a small number of the estimated 75,000 grant makers in the United States, they represent 20 percent of the foundation world’s wealth and are indicators of major trends in giving.

The positive investment performance was a welcome contrast from 2008 but will probably not translate immediately into larger grant-making budgets.

One reason: Foundations often develop their giving plans based on previous years’ earnings, so it will take some time for their donations to recover from the 2008 stock-market debacle.

Of the foundations that provided estimates about giving in their 2010 fiscal year, 25 said donations would decline. Twenty-seven said they would give about the same as in 2009, while 21 reported that giving would increase.

The findings are similar to other surveys. For example, a February poll of 45 foundations by the Colorado Association of Funders showed that 17 grant makers plan to decrease their giving, 16 expect to keep it flat, and the rest will increase it.

Caution Ahead

For the foundation world, the key word for 2010 is caution.

“Given the long shadow of this recession, I don’t think it would be prudent to be banking on stability or that slow growth,” said Sterling K. Speirn, chief executive of the W.K. Kellogg Foundation, where assets have been on a wild ride the past two years.

At the end of August 2008, they were above $8-billion, tumbled to below $6-billion in 2009, and today hover around $7.5-billion. With such ups and downs, the Battle Creek, Mich., fund will keep its grant making fairly steady this year.

The assets of the Daniels Fund, in Denver, rose by about 12 percent, but the foundation expects to keep its grants budget roughly the same as last year and make fewer multiyear commitments due to the economic uncertainty, said its chief executive, Linda Childears.

Despite the tough times, some foundations are increasing their giving.

The Ford Family Foundation, for example, plans to increase its charitable efforts this year, thanks to a $100-million bequest it received in 2008 from one of its co-founders, Hallie E. Ford. Ms. Ford died in 2007 at the age of 102.

Last year the Roseburg, Ore., organization suspended some of its grant-making programs and hired consultants to craft a long-term plan for how to use the windfall.

The grant maker, which awards money in Oregon and Northern California, has sharpened its focus, says Norman J. Smith, the organization’s president. For instance, while it has a history of helping young people, it will now concentrate its giving on projects that teach values to youngsters, like the Boy Scouts.

“We were nervous about the markets, but we think we will be more effective with our philanthropic dollars,” he said about the review.

Continued at Chronice of Philanthropy...

Source: Chronicle of Philanthropy, March 21, 2010

Author: Noelle Barton and Ian Wilhelm