No sooner had philanthropy become fashionable than the credit crunch shrivelled fortunes and the donations they sustain. In the decade to 2007 America’s charitable foundations’ assets had doubled to $682 billion [...] but by the end of last year they had shrunk by just over a fifth, to $530 billion. Two-thirds of the foundations expect to cut giving this year, probably by around a tenth overall.
Poor countries were already coping with higher prices for food and fuel, putting 130m-155m people below the poverty line, the World Bank reckons. The financial crash has hit another 50m. [...] Rich-country aid to poor countries actually fell by 8.5% in real terms from 2006 to 2007. Now it will shrink further. [...] [R]emittances too will shrink, by between 5% and 8% this year.
[...] Some of the biggest foundations base their grant-giving on a three-year average of their assets. All that helps to smooth market wobbles. The vast majority of American foundations say that they will keep up the same spending pattern.
The word at the [2009] Global Philanthropy Forum, was that big private donors will want cannier use of their money [by tieing] donations more tightly to specific projects [or concentrating] on collaboration with existing projects rather than starting prestigious new ones. The outfits that receive the money to carry out the good works see it a bit differently. They want more flexibility, not tighter rules.
But both sides question the idea that private giving can make up for stingy state spending. Compared with the nearly $104 billion that rich-country taxpayers provided to poor countries in 2007, American foundations, by far the richest, sent only $5.4 billion overseas.
Source: Economist, 07 May 2009
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