Faith, Hope, and Charity aka: critical funding for world-transforming research

1. Private Foundations and the Global economic crisis Tara Murphy Director Of Research Development Harvard Faculty of Arts and Sciences NCURA Region I -- RADG Feb. 26, 2009 Faith, Hope, and Charity (aka: critical funding for world-transforming research)

2. But maybe that�s not (yet) quite so necessary as it now seems� The economic crisis has many of our researchers preparing to elbow their way to the front of the crowd for funding that remains�

3. Private Foundations: Some Quick Background More than 72,000 grant-making foundations in the United States, according to the Foundation Center Provide a broad range of support for a broad range of activities, including: - Social services, advocacy, education, arts programs, community building endeavors, and so on; - Policy-related research and initiatives; - Lab-based science, including dedicated funding programs for scientists in the early stages of their careers .

4.  Private Foundations: Who Funds Them? Most foundations generate their grant-making budget via some combination of endowment income, support from other entities, and active fundraising, the outcome of which is often also invested and/or dependent on investments. The (unfortunate) implication is that private foundations are, like the rest of world, subject to the ups and downs of the financial markets. Indeed, a Council on Foundations report released in February 2009 stated that the decline in asset values among U.S. foundations in 2008 had averaged 28%

5. Private Foundations:  Not Necessarily All Bad News Nonetheless, an October 2008 report from the Foundation Center, which looked at the private foundation community�s response to past economic downturns, did offer some cause for optimism. The report found that in past recessionary periods � 1980, 1981-1982, 1990-1991, and 2001 � U.S. foundation giving in inflation-adjusted dollars did not decline and, in fact, even increased slightly.

6. Private Foundations: Not Necessarily All Bad News

7. Private Foundations: Not Necessarily All Bad News Multiple factors helped to moderate the impact of reduced assets on overall foundation giving, most notably: - Many foundations, including some of the nation�s largest, determine their annual grant-making budgets based on a rolling average of asset values over the prior two-five years � a practice that contributes to more stable levels of giving among private foundations in general - A number of foundations were willing to dip into their capital to ensure that previous multi-year commitments were met - A few even increased their payout rate to provide needed resources in the face of diminishing funding availability all around

8. Great! But what about the foundations that fund our researchers??? Here�s the adage: If you know one private foundation, then you know one private foundation. Accordingly, the current responses of individual private foundations to are all over the map. (In fact, the Foundation Center cautions that the aggregate figures for the early 2000s obscure the fact that some foundations had to make deep reductions in their funding). The slides that follow summarize what�s known about the reactions of foundations with relevance for university-based research -- with a strong emphasis on the �what�s known.�

9. Worst Case Scenarios