Stock Market Hurt Foundation Giving
The stock market's ups and downs and the uncertainty of economic
recovery were the two major reasons why foundation giving dropped
last year, the New York Times reported April 5.
According to the Foundation Center, the nation's 65,000 independent,
community, and corporate foundations awarded $29.7 billion in grants
in 2003, down 4.7 percent when adjusted for inflation from the $30.3
billion awarded in 2002.
With many foundations losing assets as high as 10.5 percent from
the stock market's decline, foundation experts were expecting an
even greater drop in giving.
"Foundations have yet to recover from the drop in their assets
that started in 2000," said Loren Renz, vice president for
research at the New York-based Foundation Center. "Until they
have fully realized that recovery and seen that the stock market
is stable and the prospects for economic growth are more consistent,
they're going to be more cautious."
Many foundations determine their spending using a three-year average
of their assets, experts noted. "The thing a lot of nonprofits
don't understand is that 2003 being a good year doesn't translate
instantly into more money," said Elizabeth Locke, president
of the Duke Endowment. "It's hard to explain how you had a
good year but you're not giving away an equivalently larger amount."
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