Steven Lawrence, senior director of research at the Foundation Center, explains in an October 2008 research advisory that the Center still expects foundation giving to grow ahead of inflation in 2008.
Foundation assets grew faster than inflation between 2003 and 2007, which enabled grant makers to replenish their endowments after the downturn of the early 2000s, Lawrence explains. For foundations that determine their annual grants budgets based on a rolling average of their asset values, this growth should help to mediate the impact of possible asset losses in 2008 on their giving in 2009. Some foundations will also benefit from new gifts and bequests, and the sector as a whole will benefit from the continued establishment of new and sometimes quite large foundations.
What does this mean for 2009? Should the stock market recover some of its losses by year's end, the various factors cited above may help overall foundation giving to remain roughly unchanged next year. This would be the best-case scenario, Lawrence explains. “However, if the market fails to rebound from its current low or sinks further, the asset losses may be so pronounced and touch so many foundations that an overall decrease in funding becomes inevitable.”
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