Foundation Growth and Giving Estimates

Posted by on October 03, 2011

Foundations: budget cuts hurting charities

A survey of 75 foundation leaders across the country showed that almost all of them (95 percent) said some of their grantees had been affected by federal, state and local funding cuts, and 58 percent said most or all of them had. One-quarter said some grantees had been forced to suspend operations either temporarily or permanently.

Almost half said they had awarded grants or provided other assistance in direct response to reductions in state aid, and one-third said that state fiscal crises had influenced their 2011 spending plans.

“Foundation budgets are dwarfed by government spending,” said Steven Lawrence, director of research at the Foundation Center, which conducted the survey among members of its Grantmaker Leadership Panel. “Nevertheless, many foundations are trying to help keep the doors open at nonprofits until the state budget crises pass,” although few expect that to happen any time soon.

Four out of five think that states will face budget gaps through 2013 or beyond.

Those surveyed offered a range of advice to their foundation colleagues about ways to help—for example, paying for advocacy campaigns, paying for analyses to identify effective government programs that should be shielded from further cuts, helping nonprofits consider ways to restructure to preserve essential programs, and focusing grant making on the neediest people.

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