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The supply of grants is shrinking, even while the national demand for them continues to grow. This post is one in a series concerning trends impacting the future of grant making.

 

Diminished Assets:

Without assets whose growth in value outpaces annual inflation rates and annual grant awards, the Nation’s grant-making foundations cannot continue to make grants indefinitely. Yet, after nearly five years, foundation assets have not yet returned to their pre-recession levels. The Chronicle of Philanthropy has reported that the ten wealthiest foundations alone saw their assets’ value decline by more than $25 billion, or about $1 in every $4 of their value before the economic crisis of 2008, a plunge from which they’ve yet to recover. In 2011 alone, foundation endowments shrank by about 3.5%, even after making slight gains in each of the preceding two years.

 

Anemic Asset Growth:

The Foundation Center reports that all foundations awarded a total of $45.7 billion in grants in 2010 and $46.9 billion in grants in 2011, a 2.6% gain before inflation. Its most recent forecast growth of 1%-3% in giving during 2012 will barely match the projected inflation rate.

 

Decreased Grant Making:

Independent foundations consistently account for more than 70% of grant making among all foundations. Grants by independents amounted to $32.5 billion in 2010, down by 0.7% from 2009 and the second year-to-year decline in such grant making in a decade. Among respondents to the Foundation Center’s latest Foundation Giving Forecast Survey, 31% of corporate foundations, 40% of community foundations, and 39% of independent foundations predicted decreased giving in 2012.

 

Absent Alternatives:

During times of contraction and retrenchment in federal and state grant making, some political pundits have posed soliciting more grants from the Nation’s foundations as a viable alternative for non-profit organizations, among other grant seekers. However, the Chronicle of Philanthropy points out that “…foundation support is no panacea… because grant makers don’t have nearly enough money to make up for the sums state and federal governments are withdrawing.” Its forecast for those seeking grants from foundations may also resonate: “For grant seekers, one thing is quite certain: Foundation giving is unlikely to rebound anytime soon….”

 

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