[March 6, 2009] In a dismal economy, grantmakers in the Washington region are making adjustments to keep critical funds flowing into the community.
The just-released “How is the Economy Affecting Philanthropy in Our Region?” (.pdf) is based on a February ’09 survey of Washington Regional Association of Grantmakers members. The vast majority of respondents (86%) experienced a decrease in assets in 2008, but fully half are finding ways to maintain or increase their grants budgets in 2009. 16% said their budgets would be slightly larger. 32% of respondents said their grants budget would remain about the same.
In responding to growing demand and shrinking resources, funders have made significant operational adjustments. More than half of respondents have reduced their own foundation or corporate giving operating budgets. More than a third have frozen hiring, while nearly the same percentage have frozen salaries.
Many foundations calculate annual giving budgets as a percentage of the value of assets in the previous year. With the value of their endowments having fallen, half of respondents reported that their giving would decrease in 2009. It is important to note that when assets decline drastically, a foundation can increase its payout rate substantially and still decrease its overall giving. As one respondent noted, “a foundation that has lost 40% of its value can give 8% instead of 5% and it will still be less money in grantmaking than it was a year ago.
“57% of survey respondents are increasing funding for grantee general operating support. Grants with increased flexibility may help nonprofits facing leaner budgets to be more creative and more responsive to changing needs… [more]