Cre8tive Philanthropy

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Investment and innovation in the for-profit social impact community.

Charitable giving holding on, but not because of foundations

Foundation giving declined nearly 9% in 2009. With volitile investment assets, this may be expected. Yet, individual giving remained flat (despite continued high unemployment and a challenging financial climate for most people) and corporate giving actually increased. Considering individual giving comprised 75% of all charitable gifts, this is good news… or at least not bad news. What is concerning is¬†foundation grantmaking declines.¬†As the second leading source of charitable resources, the fact that foundation giving has decreased means additional hardship for charitable organizations seeking to fund meaninful projects.

This decline in giving is unlikely due to a lack of generosity on behalf of foundation management. Foundation tax rules play a big part in the payout amount foundations give on a yearly basis. Additionally, there is a need to preserve some foundation assets. Hopefully, congress reviews and revises the excise tax rules to encourage giving in times of economic hardship – when it’s needed most. At the same time, foundations need to find “alternative” ways to give while growing their resources.

Many foundations are currently looking to PRI’s (Program Related Investments) to do just that. PRI’s are a great way to make the payout requirements, fund worthwhile programs, and retain an investment interest for foundation assets. Smaller foundations may look into forming a PRI program within their foundation as a way to successfully fullfil their mission while ensuring funds are available to charities in difficult times.

Filed under: Foundations, Giving, PRI

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