Foundation Giving in ’08 Defied Huge Asset Decline

The nation’s foundations lost nearly $150 billion in assets last year, or almost as much as they have given away over the last four years, a new study has found.

The study, by the Foundation Center, a chief authority on American philanthropy, determined that foundation giving for the year nonetheless held steady at an estimated $45.6 billion, falling by just 1 percent on an inflation-adjusted basis.

Still, without the $2.8 billion given away by the Bill and Melinda Gates Foundation, the nation’s largest, the decline would have been almost 3 percent. Moreover, the center cautioned that because the steep loss of asset value happened so late in 2008, giving in the current year was likely to drop much more.

The full-text article by Stephanie Strom is available from The New York Times, 3.31.2009.

Giving and Taxes

Evidently, the rich still carry influence in Washington. President Obama’s plan to cap itemized deductions for high-income taxpayers at a 28 percent rate flew like a lead balloon in Congress, reportedly sending the White House in search for other sources of revenue.

It would be a pity if the administration were to forgo that money — some $320 billion over the next 10 years to finance a good share of its proposed health care reform. The money is needed. And the complaints that capping deductions would kill charity, decimate small business and put yet another nail in the coffin of the housing industry are wrong.

The full-text editorial is available via The New York Times, 3.19.2009.

Senate Measure Seeks to Spur Foundations to Give More

Three senators introduced legislation Tuesday intended to encourage foundations to give away more of their money.

The measure would change the way foundations are taxed on their investment income, replacing the current two-tiered system with a single tax rate. Foundations complain that the current system effectively penalizes them when they give away more money than usual.

“The need for philanthropy is greater than ever in this weakened economy, and we should be encouraging foundations to increase their charitable giving,” said Senator Charles E. Schumer, the New York Democrat who is sponsoring the bill along with Senators Debbie Stabenow and Carl Levin, Democrats of Michigan.

Under current law, private foundations must make grants and other expenditures for charitable purposes equal to at least 5 percent of the market value of their assets. In calculating that payout rate, foundations are allowed to include the 2 percent excise tax they generally pay on their investment income.

The full-text article by Stephanie Strom is available via The New York Times, 3.24.2009.

Financial Safety Net of Nonprofit Organizations Is Fraying, Survey Finds

The financial health of the nation’s nonprofit groups is rapidly deteriorating, according to a survey of some 900 nonprofit leaders around the country.

Only 12 percent of those organizations expect to end the year with an operating surplus, compared with 40 percent who ended their most recent fiscal years with money on hand, according to the survey by the Nonprofit Finance Fund, a charity that provides loans and other financial services to nonprofit groups.

The full text of this article by Stephanie Strom is available via The New York Times, 3.25.2009.