It is the question on every nonprofit executive and board member’s mind these days, “How is the current economic climate affecting foundation giving,” and I would be lying if I said the same question wasn’t at the forefront of my mind as well.  I know that many of our clients are looking for a simple yes or no answer.  However, the answer, like the current economic climate, is not simple.

Recently the Foundation Center, a chief authority on American philanthropy, determined that foundation giving for the year held steady at an estimated $45.6 billion, falling by just 1% on an inflation-adjusted basis.  This latest survey also suggests that in 2009 foundation giving will decrease in the range of the high single digits to low double digits, even though estimated foundation assets declined 21.9% in 2008. Most respondents (67.1 percent) say they expect to reduce their 2009 giving to at least some extent, with community foundations being most likely to anticipate a decrease. Given the continuing instability in the economy and stock market, it is also likely that foundation giving will decline further in 2010.

Other key estimates for 2008 from the Foundation Center’s survey include:

• Independent and family foundations -- which represent close to nine out of 10 foundations -- increased their giving 2.5 percent to $33 billion in 2008.

• Corporate foundation giving held steady at $4.4 billion in 2008.

• Community foundation giving rose 6.7 percent to $4.6 billion in 2008, surpassing corporate foundations for the first time.

Bradford K. Smith, president of the Foundation Center, has been quoted as saying that “Foundations remain one of the few sources of stability for nonprofit organizations in this very volatile economic climate. However, the longer this crisis persists, the more foundations will have to reduce giving.”

Yes, this is true.  However, nonprofits have to remember that the answer to the question posed in the first paragraph is not simple.  Just as each nonprofit is weathering the current economic storm differently, so is each foundation.  Some foundations have already cut back on their giving by only giving to those nonprofits with whom they have a relationship with.  Other foundations have decided to only accept proposals once a year, instead of their traditional twice or four times a year.

What shouldn’t you do?  Panic.  We see a number of organizations in panic mode – running around, adding fundraisers, and taking a “shotgun” approach.  Rarely does this amount to an increase in giving.  Rather, it burdens (usually) already overburdened staff people, who as a result, spend less time on truly profitable fundraisers that are already in place. 

In sales, it takes almost 80% less effort to sell products to existing customers than it does to acquire new customers.  The same rule applies in fundraising.  It takes considerably less effort to expand an already successful campaign or event than it does to start a new one.  If you do decide to start a new fundraiser, make sure to ask yourself if it will be worth it – does your staff have time necessary to do a good job?  Is it realistically going to raise more money than you could by spending more time on existing relationships and expanding existing campaigns or events?

Yes, times are tough, but the rules of raising money for your nonprofit still apply – a good match is still more likely to be funded, relationships count (more than ever!), and an active board with ties to the community can give you the “edge” over the many other worthy organizations when it comes to making connections and receiving support.