How Foundations Cope with the Economic Crisis
Earlier this month, we commented on an article that describes how private foundations serve as a source of funds for research, particularly family foundations that focus on specific diseases. Last week, a study released by the
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The good news is the vast majority of foundations (8 in 10) intend to maintain their programs, albeit at lower levels. The study shows that despite the cutbacks, foundations are taking bold--and some might say risky--steps to keep their programs going. Nearly 4 in 10 foundations (39%) expect to dip into their endowments for grantmaking; in a typical year foundations use the investment income from those endowments to fund their grants, preserving or increasing their endowments. A few foundations expect to make up some of the shortfall through new gifts from donors (17%), and by dipping into discretionary funds (13%) or reserve funds (9%).
Coping with the crisis means finding ways of achieving their missions in ways other than handing out money. About a third (32%) of the respondents, and nearly half (44%) of the larger foundations, say they had made changes in their operations to enable them to weather the current storm. One of those strategies is a shift to non-grant activity. More than half (54%) of the respondents say they are engaging in more non-grant projects as a result of the economic crisis, such as partnerships and collaborations, and advocacy.
Another survival strategy, as one would expect, is cutting costs. Nearly 1 in 10 foundations say they cut staff and other administrative expenses.