According to a new research advisory from the Foundation Center, nearly two-thirds of foundations expect to reduce the number or the size of grants they award in 2009.
Based on a recent survey of more than 1,200 U.S. foundations, the advisory, Foundations Address the Impact of the Economic Crisis (6 pages, PDF), found that more than half of respondents are reacting to the economic crisis by engaging in more non-grantmaking activities, with two-thirds of those foundations planning to pursue collaborations and partnerships in 2009 and about a third indicating they will initiate more convenings. At least 20 percent of funders said they expect to engage in more foundation staff-led activities, provide more technical assistance, offer more bridge/emergency financing, or engage in more advocacy.
Funded in part by the Wallace Foundation, the report also found that organizations seeking new sources of support and recently established entities will be especially challenged in securing foundation funding. Approximately 40 percent of foundations said they expect to draw at least in part on their endowments to fund grants this year, while roughly 14 percent either have made or plan to make exceptional grants or launch special initiatives in response to the economic crisis, largely by reallocating existing grants budgets. In addition, nearly a third of respondents made operational changes as a result of the 2000-02 economic downturn that they believe prepared them to face the current downturn.
"Foundations can do so much more than simply make grants," said Foundation Center president Bradford K. Smith. "The important thing is for them to remain true to their values and causes and to stand by their nonprofit partners."
The advisory is the latest in a series released as part of the Foundation Center's Focus on the Economic Crisis project, which offers a variety of resources to help nonprofits and foundations deal with the challenges of the unstable economy.