Why 2010 Will Be a Tough Year for Foundation Grant Seekers

Sean Stannard-Stockton, an adviser to donors and a columnist for The Chronicle, predicts that foundation giving will plummet in 2010.

Here’s why:

Foundations are required to give 5 percent of their assets annually, based on the value of their investments the previous year. “If the market trades exactly sideways for the rest of the year, required foundation giving in 2010 is going to fall another 23 percent compared to 2009,” writes Mr. Stannard-Stockton.

What’s more, many foundations tried to maintain their giving last year because of the greater needs — and to the extent their grants exceeded the 5 percent figure, they can count it toward 2010’s requiring giving.

“In other words,” writes Mr. Stannard-Stockton, “from the standpoint of foundation giving, more than half of the impact of the stock market has yet to be felt.”

So what’s to be done? Foundations should encourage major donors to support their grantees, he says. “Helping these charitable dollars flow towards high-performing, well-vetted nonprofits is the most dramatic way that foundations can leverage their own giving.”