Giving at biggest U.S. foundations does not keep pace with asset growth. What should nonprofits do?

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In March of 2014 the Chronicle of Philanthropy published an article based upon a study of giving at the 66 biggest U.S. Foundations.  The study found that although asset levels at these foundations have steadily grown since 2007 yet their pace of grant making has not grown to reflect this increase.  What are the take-aways from this research?  It is clear that their has been asset growth since 2007, but the pace has been erratic and slow.  In 2007  the asset levels at the top 66 biggest foundations were $224 billion.  One year later they plummeted to $160 billion and has moved up and down to arrive at the 2013 level of $187 billion.  Because of this, foundations remain in a cautious place.  The pace of grant making this year is the third lowest since 2007.  What might account for this?  In addition to the foundations cautious approach, many are refocusing their grant-making efforts and exploring new and current needs, in particular, health care reform.

As nonprofits look to foundations for support they need to know that it may be more limited with greater specificity required.  Clear results need be measured and communicated as foundations are expecting more from data and evidence for their support.  Additionally, nonprofits will need to expand their funding streams especially if they are reliant on foundation grants from the biggest foundations.

As we move through this period of recovery, it is time for all nonprofits to sharpen their processes for articulating, measuring and communicating the impact of their work.   They need to ensure their support structure is or becomes diverse so that segments can mitigate downturns in other areas.  One lesson learned in this economic recovery is that foundations have learned  things can change and they cautiously and thoughtfully are looking at how they operate so that they can continue to be strong and impactful.

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