Long-term optimism for grant-making despite investment losses, survey finds

Long-term optimism for grant-making despite investment losses, survey finds

News (UK)

Grant-making by charitable foundations should hold better than their investments, and the long-term outlook is optimistic, according to a survey of charitable trusts from the Association of Charitable Foundations (ACF).

Almost 50% of those surveyed expected grant-making to remain the same or increase in the next year, including 9% who expect the latter. However just over half expected grant-making to fall in the same period, though this is less than the expected drop in income.

The outlook for the longer-term is more optimistic. Beyond two years, 45% of participating members expect to increase their grant-making and another 33% expect to maintain current levels.

“Trusts and foundations exercise very prudent financial controls and plan for the long term,” said David Emerson, chief executive of ACF: “While not immune to the recession, for the most part it is business as usual.”

The survey did find 75% of respondents had seen a significant decrease in investment value over the past 12 months.

Some respondents anticipate changes in the nature of the grants they make next year: 44% are likely to give fewer grants; 27% believe their grants will be smaller, and 23% think they will be given over shorter periods.

One respondent commented: “We take a long-term view. We have made provision for at least two years’ worth of easily accessible funds to cover projected expenditure, and believe markets (and our assets) will recover.”

In the US, the Chronicle of Philanthropy’s annual survey of endowments found that the 60 participating organisations whose fiscal year ended in December suffered a median decline of 25.4% for 2008.

None of the endowments in the US survey fared as badly as Standard and Poor's 500 Index, which fell by more than 38% in 2008.

ACF members manage over £30 bn in investments and provide about 10% of the annual income of the voluntary sector in the UK.

  • Philanthropy stats & trends
  • Trusts & foundations
  • UK