America’s Biggest Foundations Won’t Increase Their Giving in 2009, Says a New Report

In the wake of the tumbling stock market and heavy asset losses suffered by virtually all the nation’s wealthiest foundations, only two have said they plan to increase their giving this year, according to a new advisory report by the Foundation Center, in New York.

In his recent “annual letter,” the software billionaire Bill Gates said that the Bill & Melinda Gates Foundation will expand its giving in 2009 — despite its assets having plunged some 20 percent. Likewise, the John D. and Catherine T. MacArthur Foundation announced that it plans to “maintain or increase” grant making, but has not explicitly said how that would be done.

The new information from the Foundation Center is derived from public statements issued by approximately one-third of the 100 largest U.S. foundations, as ranked by giving, as well as 35 additional foundations and corporate grant makers. (For more information about foundations’ plans, see The Chronicle’s survey of big foundations in the February 12 issue.)

The grant makers’ current plans for withstanding the recession include increasing the percentage of assets they give, lowering administrative costs, and slashing some programs entirely.

Holding Steady

Ten foundations have said that to keep their giving levels on a par with 2008, they plan to increase the percentage of their assets distributed or cut costs — including freezing employee salaries, placing holds on hiring, or reducing staff benefits. Some will combine the two approaches.

In one instance, the Silicon Valley Community Foundation announced last month in a written statement that it is “freezing salaries, putting a hold on open positions, reducing retirement benefits by 50 percent, asking staff to absorb increases in medical-insurance costs,” and taking other steps to cut spending.

The foundation laid off 14 employees — or 14 percent of its staff — so it could afford to give about the same amount this year it did last year, or approximately $8-million.

The other nine foundations that hope to give as much this year as they did last year are: the Bush Foundation, the California Endowment, the Houston Endowment, the Robert Wood Johnson Foundation, the Jim Joseph Foundation, the Kresge Foundation, the Andrew W. Mellon Foundation, the Oregon Community Foundation, and the Harry and Jeanette Weinberg Foundation.

Six other large grant makers have said that they expect to give less this year: the Anschutz Foundation, the Daniels Fund, the William and Flora Hewlett Foundation, the McKnight Foundation, the David and Lucile Packard Foundation, and the Starr Foundation.

The Hewlett, McKnight, and Packard foundations have all announced that they plan to lessen the recession’s effect on their grant making by increasing the amount of money they distribute from their endowments.

For example, the Packard foundation has said it will increase the share of assets it gives from 6 percent in 2008 to 7 percent this year, enabling it to make awards of approximately $276-million.

While that will help cushion the blow to grantees, the action would still result in an 18percent drop in giving this year because the endowment has suffered such a big hit.

Meanwhile, several other large grant makers — including the Eli and Edythe Broad Foundation, the Carnegie Corporation of New York, the Ford Foundation, and the John S. and James L. Knight Foundation — are adopting a “wait and see” approach and hedging their bets as to whether their grant making will go up, go down, or remain steady this year.

The Foundation Center report is the latest in a series that examines how the economic downturn affects grant makers and their grantees. The four-page report is available on the Foundation Center’s Web site.