November 21, 2008 | Read Time: 3 minutes
Due to the financial turmoil in global markets, the Bill & Melinda Gates Foundation must scale back its plans for grant making in 2009, says Jeff Raikes, chief executive of the foundation.
In a letter Mr. Raikes has written for the organization’s Web site, the Seattle philanthropy will give more money to charity next year compared to 2008, but it will be less than the foundation had expected to award before the economic meltdown hit.
“Nonprofit groups rely on steady funding to carry out their work, but with an uncertain economy and a volatile stock market, funders are having an increasingly difficult time,” Mr. Raikes writes.
“We plan to grow our payout by about 10 percent over our 2008 payout,” he says. “We will, however, reduce the planned growth in our payout. In other words, we will make more grants in 2009 than in 2008, as we have planned, but the increase will be smaller than our original expectation.”
Amounts Not Specified
The letter did not include specific dollar amounts for the fund’s grants this year or for next year.
It also did not say how much the group has lost in assets due to the downturn in the economy.
Heidi Sinclair, a spokeswoman for the foundation, declined to comment on Gates’s grant making next year.
Before the financial crisis, the foundation had said it planned to award $3.2-billion in 2009 as its assets grew thanks to a massive donation by investor Warren Buffett. At the end of last year, the Bill & Melinda Gates Foundation Trust, a separate entity from the foundation that holds its assets, had almost $40-billion, making it the wealthiest philanthropy in the United States.
In addition to decreasing the amount it had prepared to award next year, Mr. Raikes says that he asked employees to find places to trim operational expenses. He also says the foundation’s grant-making priorities — U.S. education, global development, and global health — would remain unchanged and that the fund would continue to support efforts to influence the federal government.
He writes, “advocacy is especially important in tough times. When government officials write next year’s budgets, it may be tempting to cut back on the very programs our grantees care most about. We will continue to advocate, within the legal limits on lobbying, for funding and policies that advance the work we’re doing with our partners.”
Other Foundations
Gates is not the only big foundation facing difficult financial times.
The William and Flora Hewlett Foundation, in Menlo Park, Calif., says on its Web site that a decline in assets will force it to cut grant making as much as 7 percent next year.
The John D. and Catherine T. MacArthur Foundation has also suffered financial losses, but will increase its grants in 2009.
“In past recessions, we maintained our grant-making level and we intend to do so again now. Our total philanthropy is increasing from 2007 to 2008. We also expect to maintain or increase our grant making in 2009, despite the performance of the market to date,” writes Jonathan F. Fanton, the Chicago fund’s president, in a letter on its Web site.
Read The Chronicle’s article about how nonprofit groups are being affected by stock-market volatility and an article about how foundations are changing their grant making to support people hard hit by economic woes.
