The slow foundation rebound

A sobering but informative article from the Chronicle of Philanthropy reports that big grant makers don't expect to increase giving in 2012. While this news is unfortunate, it's not a surprise. It's also not the end of the world. Here's my take.

When the economic crisis hit in 2008, wealthy individuals were affected almost immediately, but foundation endowments felt the impact at least a year later. So, while the article states that foundations will rebound one to three years after individual donors do, it doesn't mention that foundation assets declined later than personal wealth in the first place.

The good/bad news: Foundations are required to distribute 5% of their assets annually. This is great for nonprofits because foundations can't suddenly decide to stop giving away money. This is bad for foundations because some are really hurting and cannot legally take a grant making "breather" to shore up their resources.

The competition will only get tougher. Stagnant foundation growth means that traditionally competitive grant opportunities will become even harder to win. As a result, nonprofits will need to submit the highest quality grant applications to the most appropriate foundations. No more boilerplate proposals to the same five organizations that hardly ever support the type of work you do.

This is a great time to cultivate foundations. Just because they can't give as generously as they'd like doesn't mean that you can't introduce yourself to them. If you truly feel that your cause matches theirs, then send a letter or make a call (if they allow unsolicited contact). Share a bit of info about what your group does; you never know where that may lead when the financial tides turn.

For better or worse--economic crisis or no--fundraising takes time and attention to detail. Resources are spread thinly these days but I suspect that a peak will come into view after we get through this financial valley.




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