• Some foundations, including the Ford and Gates foundations, are increasing their donations to counter the affects of the economic downturn. But most foundations are being substantially impacted by this recession.



• Regardless of the loss of value in the investment portfolios of many foundations, all foundations are required by law to donate 5% of their assets annually in order to retain their tax exempt status. As a consequence, many foundations will be forced to draw down their principal or reserves, thus diminishing the value of their assets over the long term.
  • YSK Consulting predicts that it will take more than a year after economic recovery for many foundations to be able to donate at the levels they donated at prior to the economic recession.


• The Chronicle of Philanthropy reported the following outlook from a recent study of foundation giving (Barton & Wilhelm, 2009):
  • On average, foundation assets declined by 28% in 2008.
  • Of the 73 respondents surveyed about their outlook for 2009:
    • 53.5% expect donations to drop
    • 30% expect donations to stay the same
    • 16.5% expect to donate more
  • Foundations are refocusing their support to fund causes related to the poor and disenfranchised. They are also helping well-established nonprofits by providing funding for administrative budget shortfalls and operating costs.


• Foundations have realized their importance in tough economic times. While not all foundations are willing to draw down on their principal, many are and recognize that they are more important to nonprofits now during these weak economic times.



• In order to survive some foundations are merging with other organizations, sharing offices and reducing staff.



• Certain philanthropic foundations are determined to invest in trying to make up some of the community cause funding shortfalls.



• Some foundations which have an established expiration date and must distribute all their assets by a target date. They will continue spending down their assets to meet that deadline.



• Connect to your core foundation donors, those who have a long term relationship with your organization, and especially those who share a similar mission and goals.

Remember that to retain their tax-exempt status, foundations must distribute a minimum of 5% of the Fair Market Value of their net assets to charitable causes.