NCPA - National Center for Policy Analysis

Foundations May Give Less Due To Economic Uncertainty

February 19, 2001

The plunge in dot-com fortunes and other storm clouds over the U.S. economy are not encouraging prospects for philanthropic institutions. Over the past decade, charitable institutions have been raking in mounting sums as the economy bounded ahead. But less certain economic prospects may slow donations to foundations, and grants by them for charitable purposes, experts warn.

  • A survey of the nation's largest foundations, to be published in the Chronicle of Philanthropy, reveals that 79 of the 142 organizations questioned expected their giving to remain flat or drop this year -- while slightly more than half said their assets had shrunk over the last year.
  • Over the second half of last year, there was a 2.7 percent decline in the Philanthropic Giving Index, which is compiled at Indiana University.
  • The median decline of the biggest foundations' assets has been only 0.3 percent -- but the loss would have been far greater were it not for billions flowing into just two foundations: the William H. Gates Foundation and the Lilly Endowment.
  • Giving by foundations almost tripled over the last decade -- to $20 billion.

Source: Tamar Lewin, "In an Uncertain Climate, Philanthropy Is Slowing," New York Times, February 19, 2001; Laura Hruby and Elizabeth Schwinn, "Charities could face future cuts in grants if economy falters," Chronicle of Philanthropy, February 22, 2001.

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