Foundations Not Likely to Make Major Shifts in Causes They Support Because of the Bad Economy

Arts, environmental, and international charities can take solace in a report by the Foundation Center that suggests that foundations don’t drop their support for such causes even when an economic downturn turns the public’s attention to social-service groups.

The center, a New York research organization, analyzed grants awarded by more than 1,000 foundations from 1999 to 2005 to groups that focus on education, health, arts, international affairs, and human services. The study found that the 2001-2003 recession did not have a disproportionate impact on foundation support for any of those causes, suggesting that, even in downturns, foundations do not make sudden shifts in their grant-making commitments.

That’s not to say that foundations are unresponsive to pressing needs unrelated to their grant-making priorities, says Steven Lawrence, the center’s director of research and author of the study.

In fact, the center found that U.S. foundations awarded nearly $700 million in response to the September 11 terrorist attacks, and granted almost $500-million to relief and rebuilding efforts following the 2005 Gulf Coast hurricanes. But, he said, in such exceptional circumstances foundations typically use discretionary or emergency funds or tap their endowments rather than cut support for the causes they traditionally support.

He points to foundations that have already allocated emergency funds in response to the current economic crisis, including the MacArthur Foundation’s pledge of $68-million to prevent foreclosures in Chicago, and the Alfred P. Sloan Foundation’s $2.7-million grant to study the financial market crisis to improve public understanding of economics and finance.

“There is no guarantee that patterns seen during the early 2000s economic downturn will predict how the current reality will unfold,” said Mr. Lawrence, in a written statement accompanying the advisory. “But nonprofits should feel reassured that dramatic changes in overall foundation giving priorities are unlikely.”

(Learn more about how foundations are responding to the turbulent economy in an article from the latest issue of The Chronicle.)