AMERICAN GIVING | Strengthening communities through generosity
19 December 2008
American Foundations Pledge Continued International Giving
Individual giving expected to continue, but at slower pace
Washington — Giving by American foundations to international causes in 2008 is likely to top the record $5.4 billion of 2007, according to a new report produced by leading groups supporting philanthropy.
One of the report’s authors, the New-York based Foundation Center, said most private and public foundations it surveyed indicate they expect their giving for international causes to grow during the next two to three years, even if there is a prolonged downturn in the U.S. economy.
The survey responses reflect long-term commitments by America's foundations, the center says in International Grantmaking IV: An Update on U.S. Foundation Trends. The report was produced in cooperation with the Virginia-based Council on Foundations.
The number of U.S. foundations has more than doubled since 1992, with new foundations being formed every year as more people bequeath a part of their assets to a cause important to them, Steven Lawrence, the center's senior research director, told America.gov. A bequest is a gift a donor wills to be distributed after death.
The Foundation Center has collected data on grant practices since 1975. America has weathered periodic recessions since then, and during those downturns, foundations gave more in grants, rather than less, Lawrence said. The center expects to issue a report in April 2009 indicating trends in overall giving through 2010.
Lawrence said foundations do not tend to change the focus of giving during economic downturns. Citing surges in giving after the 2001 terrorist attacks in the United States and 2005 Gulf Coast hurricanes, he said foundations dip into emergency budgets when a need arises outside their plans.
Lawrence said that while most long-term giving is through large foundations, as corporations gain more understanding that business interests and philanthropy are linked, they become more involved in giving.
“Their commitment to philanthropy will only grow,” Lawrence said, and it will cover increasingly global issues such as climate change.
Large foundations, Lawrence said, “are in the business of giving money away.” From the downturn of 2002, corporations learned to monitor their assets better so their grant giving could continue, he said.
Between 2003 and 2007, foundation assets grew faster than inflation, which allowed foundations to replenish their endowments and plan for large, multiyear commitments.
“The lessons learned from the last economic downturn in 2002 should reassure the nonprofit sector that foundation giving is not going to disappear,” he said.
Save the Children USA is one nonprofit that exceeded its fundraising goal for the 2008 fiscal year that ended September 30. Development official Brian Sobelman told America.gov he is “cautiously optimistic” about near-future contributions. His group is part of an international alliance that serves people in 110 countries.
Microsoft founder Bill Gates, co-chairman of America's largest grant-giving foundation, in a message meant to encourage giving by foundations, said in a December 3 speech that some of the highest-leverage, long-term investments come from development assistance to poor countries.
Sobelman said the distinction between his organization's ability to get through the economic downturn and that of some small, local nonprofits is that Save the Children has deeper financial reserves. Nevertheless, Save the Children is trimming operating costs by, for instance, putting a freeze on hiring and some travel, he said.
INDIVIDUAL GIVING MAY GO DOWN
While individuals are expected to continue donating to domestic and international charitable causes, some may give less than during times of economic prosperity, Indiana University's Center on Philanthropy reported in October.
The Sharpe Group, which advises nonprofits on fundraising, says charitable giving is a priority for many donors who tend to cut other discretionary spending during economic slowdowns.
The Sharpe Group also says in its October publication Fund Raising in Times of Uncertainty that as long as people remain employed, most will continue to give and many even increase their donations.
Carol Adelman, of Washington's Hudson Institute, said her organization’s research shows that individual giving typically goes down at a rate lower than declines in the economy as a whole. Any drop-off in giving by individuals due to the economic downturn will not affect international charities until mid-2009, she added.
