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Foundations and the Economic Crisis: An Update

November 19, 2010

According to the National Bureau of Economic Research, a private, nonpartisan research organization that has the final word on these things, the Great Recession started in December 2007 and came to an end in June 2009. While that surely would come as news to the more than nine million Americans who are "underemployed" or the more than thirty-five million who receive food stamps, the overall economy does seem to be pulling itself off the mat.

The modest if general improvement in the economy is reflected in the latest advisory issued by our Research colleagues here at the center. Moving Beyond the Economic Crisis: Foundations Assess the Impact and Their Reponse (4 pages, PDF) suggests that, after a dismal year in 2009, foundation giving stabilized in 2010 and is poised for modest overall growth in 2011. At the same time, it's likely to be years before giving returns to the peak level recorded in 2008.

Based on a September survey of approximately 5,000 large and mid-size U.S. foundations (see note below for details), the report found that approximately one in five respondents (21 percent) expect to increase their giving in 2011, while 59 percent expect their giving to be about the same and 15 percent expect it to be lower.

2010econadvisory_2011giving 

The report also found that, since the fall of 2008, two out of five (41 percent) respondents to the survey had made grants, program-related investments (PRIs), and/or other types of support to address problems related to the economic crisis. While the vast majority of that support was for safety-net services, it also included funding for things like job training, bridge financing, business development, and strategic mergers and partnerships. (Click here for detailed info on roughly 3,500 econ crisis-related grants and PRIs.)

2010econadvisory_crisissupport 

Finally, when asked to rate the overall responsiveness of the U.S. foundation community in addressing the needs of nonprofits during the crisis and recession, just over half the respondents (51 percent) rated it "good" or "excellent," while close to one in five (19 percent) rated it "fair" or "poor."

2010econadvisory_responsiveness 

Now it's your turn. How would you rate the foundation community's response to the economic crisis and the Great Recession? What might or should foundations have done differently? And what, if anything, should they do in 2011 to help nonprofits and the sector repair the damage?

Don't be shy; let's have a conversation....

(Note on methodology: The September survey was made avilable to approximately 5,000 large and mid-size U.S. foundations. A total of 719 foundations -- 501 independent, 154 community, and 64 corporate -- had provided usable responses as of mid-October.)

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