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Foundation giving likely to dive

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Coming off an estimated asset plunge of 22 percent in 2008, U.S. foundations expect their grantmaking to drop at least 10 percent this year, a new survey says.

And because many large foundations base their grantmaking on a three- to five-year rolling average of their assets, giving likely will continue to fall in 2010, says the survey by the Foundation Center.

About half of foundations anticipate no changes in grantmaking in 2010, but more than a quarter expect to give less, with larger foundations more likely to curb giving than smaller ones.

More than two in three foundations have instituted cost-cutting measures, with some doing so to preserve money for grantmaking, while others say they plan to be smaller organizations going forward.

Two-thirds of foundations that have cut back have done so by reducing travel and freezing or cutting salaries, while one in three have reduced staff training and professional development.

More than half have frozen or reduced salaries, and one in five have eliminated positions or laid off staff.

Among the 82 foundations that cut staff, the equivalent of 203 full-time employees were eliminated, with 50 of those coming from a single foundation.

Overwhelmingly, foundations believe they will come out of the downturn as more strategic organizations, and some say they will continue to provide more flexible funding for grantees.

Several respondents also plan to be more conservative in investing their assets, the survey says.

And while foundations expect the downturn will force some nonprofits to close their doors, those that survive will come through the recession stronger, grantmakers say.

To help make that a reality, funders suggest nonprofits be more creative in their fundraising, consider revenue-generating activities, collaborate with peers when possible and ensure that programs align well with missions.

The survey, fielded in September, includes responses from 593 foundations.

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