Bad News for Nonprofits - Foundation Giving Lost Ground in 2011

Bad news for nonprofits.  A report just released by the Foundation Center indicates that while foundation giving totaled $46.9 billion in 2011 (a slight increase from the previous year), inflation-adjusted foundation giving actually decreased.  Highlighting just how big the Bill & Melinda Gates Foundation is, the report suggests that giving by foundation has decreased 3% (on an inflation-adjusted basis), if the Gates Foundation is excluded from the mix.

A few highlights (or maybe lowlights) from the report:

  • Foundation assets increased slightly to $646.1 billion, but that's still well shy of the pre-recession high of $682.2 billion;
  • The financial market fluctuations and uncertainties of 2011 continued to take a toll on foundation assets; the report predicts that trend is likely to continue this year, which is less than encouraging for grantseekers;
  • Foundation giving overall is likely to remain flat in 2012;
  • The report anticipates a slight increase in giving for 2013 (though is cautious about making predictions beyond this year, given recent economic turmoil and the unpredictability of global markets that can impact foundation assets.

Despite all of the financial gloominess, 44% of foundations indicated that they expected to increase their giving next year.

Anticipated change in foundation giving 2012

So what's a nonprofit to do with this less-than-encouraging news?

  • Maintain and manage relationships with current funders.  Funder relationships require care and feeding.  Keeping in close touch with your current funders can help facilitate the process of renewed funding, or can provide key information that may impact your fundraising strategy (which may sometimes mean you find out that they're planning to shift their funding priorities, but it's better to find out sooner than later);
  • Don't assume increased grant funding for next year.  Budget for consistent, or possibly decreased, funding from foundation sources;
  • Continue to diversify your funding sources (which is always a good idea);
  • Start cultivating relationships with potential new funders now.  It's a process that takes a while.  Don't wait until you're desperate for a new funding source to start building new relationships.

What do you think?  How will your organization deal with this less than optimistic forecast?

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Image source: Foundation Growth and Giving Estimates, 2012, Foundation Center

Author: Dahna Goldstein
June 07, 2012, 12:43 PM

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