Despite concerns among nonprofits that the economic downturn may cause foundation funding priorities to shift, grantmaking priorities are remarkably consistent over the long term, says Steven Lawrence, senior director of research at the Foundation Center. Some fear that society in general, and grantmakers in particular, may not be willing to support the replacement of a roof on an historic building, provide field trips to students, or preserve a viewshed at a time when people are losing jobs and homes. In a new research advisory, Lawrence noted that grantmaking priorities in most areas—including arts and culture, where historic sites fit in—do not shift suddenly in the face of reduced resources.
The Foundation Center analyzed more than 830,000 grants of $10,000 or more awarded by over 1,000 of the nation’s largest foundations between 1999 and 2005 to see whether there were any significant changes in relative grantmaking priorities across major subject areas during the economic downturn of 2001 to 2003. While there were some fluctuations during those years in the relative shares of giving in specific subject areas, the fluctuations were no larger than those seen during the years both immediately preceding and following this period. This suggests that the last economic downturn primarily affected the overall level of foundation giving, rather than funders’ broad grantmaking priorities.
Rather, they suggest that these foundations have a steady commitment to mission and grantmaking priorities and guidelines. In times of financial hardship, this may mean that a historic site stays open when attendance is down, or more land is conserved when property is less expensive, or improvements in collections care are not deferred until the stock market recovers. Yet, foundations do respond to pressing demands outside their core focus areas during times of exceptional need. For example, U.S. foundations provided $700 million in the aftermath of 9/11 and almost $500 million through mid-2007 for relief, recovery, and rebuilding efforts following the 2005 Gulf Coast hurricanes. At the same time, foundations may use discretionary or emergency funds or tap their endowments to provide that support, rather than cutting back on support for existing funding priorities.
“There is no guarantee that patterns seen during the early 2000s economic downturn will predict how the current reality will unfold,” said Lawrence. “But nonprofits should feel reassured that dramatic changes in overall foundation giving priorities are unlikely.”
The advisory, Do Foundation Giving Priorities Change in Times of Economic Distress?, is the second in a series from the Foundation Center exploring the potential impact of the current economic downturn on the nonprofit sector. The first, Past Economic Downturns and the Outlook for Foundation Giving, was released in October.
