Area foundations' giving dropped 9.6% in 2009 after economy crashed

Local foundations gave nearly 10 percent less last year after the economy crashed, according to a new study -- a decline that was obvious to people such as Amy Nakamoto, who was juggling a soccer ball on the streets of downtown Washington during a scorching heat wave last week to raise money to close her nonprofit group's gaping budget hole.

"It's a huge impact -- it's 10 percent of our budget" gone, said Nakamoto, executive director of the after-school youth development program DC Scores. It was hit by reductions from longtime funders and hurt by many foundations' restrictions on taking on new grantees. During the World Cup this summer, she is hoping to raise $130,000 to close a gap in what she thought was a conservative budget; about $100,000 of that loss during this school year came from foundations cutting back.

Giving by foundations in the area dropped 9.6 percent in 2009, to $844 million, according to a study to be released Thursday by the Washington Regional Association of Grantmakers based on research by the Foundation Center. The national decline in foundation giving, 8.4 percent, was the largest ever tracked by the Foundation Center.

Although the economy is improving, the impact of the recession is likely to be felt for a while at local nonprofit groups.

Still, given the heart-in-the-throat drop of the stock market in late 2008, the decline is far smaller than it could have been. "What was surprising was that it wasn't a whole lot worse," said Tamara Copeland, president of the grantmakers association.

It was a year with more collaboration than in the past, she said, as foundations, businesses, nonprofits and governments worked together more closely to try to find solutions and make dollars stretch further. "The economy was down, needs were skyrocketing. . . . What was clear was that business as usual wasn't going to work."

Some, such as the Community Foundation for the National Capital Region, responded to the downturn by giving more to safety-net programs even as they cut back overall. It led the region in generosity in 2008, giving away almost $90 million; last fiscal year, its overall giving dropped to about $54 million. But in late 2008 it created the Neighbors in Need fund in reaction to huge spikes in demand at homeless shelters and other emergency service providers, such as food pantries. "There were more people who were out of work," said Terri Freeman, the president of the foundation. "The lines at the food banks were longer. The contributions to the food banks were fewer. The foreclosure rate was increasing."

Most foundations made cuts, Copeland said, freezing salaries or hiring, paring spending, some even laying off staff members.

The sudden downturn brought a philosophical or an ethical question for foundations, said Doug White, academic director of New York University's George Heyman Jr. Center for Philanthropy and Fundraising -- in effect, whether this is the rainy day for which they have been saving.

Nakamoto is expecting hard times for a while yet for DC Scores. It is also affected by grantmakers narrowing their focus, in part because of the economy, in part because of the major school reform efforts underway in the city. A few gave them a little extra, despite their own losses. Overall, the foundations have been supportive, she said, "But no one is taking on new grantees." DC Scores saw small cuts, big cuts and total elimination of grants it had expected; it was warned by most of its funders but surprised by a few.

"That's how you get to the end of the [fiscal] year," she said, "and I'm juggling on the street."