The Foundation Center just released a pretty encouraging report analyzing the trends in foundation giving during economic downturns.
The data (since they started tracking it in 1975) shows that in past recessions, foundation giving was only marginally affected, if at all. Because foundations tend to determine their payout amounts based on a 2-5 year rolling average, the effects of one or two bad years are lessened. Also, in past recessions some foundations went into their corpus to make good on pledges made before the downturn hit. That’s not to say that if we go into a deeper economic downturn that things won’t be different, but it is encouraging to see that history (at least brief history) tells us that things aren’t as bad as they seem.
This also parallels nicely with the Council on Foundations open letter to their membership, earlier this week, urging them to step up to the plate during this economic crisis and not hide behind lower earnings. Indeed, going into the corpus to support programs, or even, as some innovative foundations are starting to do, to fund for-profit/social mission businesses (social enterprises), are some of the creative ways that foundations could continue to support the social sector during these difficult times.
Thanks to Sean Stannard-Stockton’s Tactical Philanthropy blog for pointing out the report.