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Economic Crisis Update: The Foundation and Nonprofit Response

July 27, 2009

Econ_crisis Many of you dialed in to last week's Turning Crisis Into Opportunity teleconference featuring Bradford Smith, president of the Foundation Center, and Bob Ottenhoff, president and CEO of GuideStar. Moderated by Katherina Rosqueta of the Center for High Impact Philanthropy, the almost hour-long discussion ranged widely over topics related to the economic downturn and its impact on foundations and nonprofits. Some of the highlights:

The true impact of the crisis has not yet been felt by either sector. Smith provided historical perspective, noting that philanthropy had grown enormously over the last decade. "Philanthropy was a train hurtling down the tracks," he said, "and then someone hit the brakes." According to Foundation Center projections, foundation giving in 2009 will decline by 9 percent to 13 percent and is likely to stay at those levels in 2010. For his part, Ottenhoff expressed surprise that, according to a recent GuideStar survey, fully two-thirds of respondents said they had increased or kept their budgets flat this year, while only a third had actually cut their budgets.

Grantmakers and nonprofits are beginning to change their behavior. For foundations, this may mean becoming more transparent about their work and communicating more effectively with stakeholders; finding more creative ways to use assets and rethinking their investment strategies; and becoming more nimble. Nonprofits can expect more pressure to demonstrate impact, improve their operational efficiency, and engage in creative, cross-sectoral partnerships.

Crisis-related funding is growing. According to new data from the Foundation Center, the value of crisis-related grants ($322 million) and program-related investments ($177 million) awarded by foundations has nearly tripled since January, while the number of corporations and foundations providing crisis-related funding has grown from 50 to 139.

To listen to or download the complete podcast, click here

-- Mitch Nauffts

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