Presentation on theme: "PRIVATE FOUNDATIONS AND THE GLOBAL ECONOMIC CRISIS TARA MURPHY DIRECTOR OF RESEARCH DEVELOPMENT HARVARD FACULTY OF ARTS AND SCIENCES NCURA REGION I --"— Presentation transcript:
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)
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…
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.
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%
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, , , and 2001 – U.S. foundation giving in inflation-adjusted dollars did not decline and, in fact, even increased slightly.
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
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.”
Worst Case Scenarios
Juvenile Diabetes Research Foundation From JDRF website: “The economic upheaval of the past few months has affected JDRF. JDRF’s safety, soundness, and liquidity are not impacted – we are financially capable of weathering a financial downturn. However, based on lower revenues and investment returns, JDRF must take action now on all expenditures.” Not accepting applications (originally due between January and March 2009) for: Program Project Grants; Regular Research Grants; Clinical Investigation Grants; and Innovative Grants. The Scholar Awards program for FY 2009 has also been cancelled. JDRF will still accept applications in FY2009 for Postdoctoral Fellowships; Advanced Postdoctoral Fellowships; Career Development Awards; Early Career Patient-Oriented Diabetes Research Awards; High Priority, Short- Term Bridge Awards, and assorted RFAs.
Camille and Henry Dreyfus Foundation *Dedicated to the advancement of chemical sciences* No official statement issued, beyond the fact that the foundation will honor all outstanding commitments A number of programs “suspended without further notice,” including: The New Faculty Awards Program The Faculty Start-Up Awards Program The Senior Scientist Mentor Program Active programs include: The Dreyfus Prize in the Chemical Sciences Camille Dreyfus Teacher-Scholar Awards Program Henry Dreyfus Teacher-Scholar Award Program (New Deadline) Postdoctoral Program in Environmental Chemistry Special Grant Program in the Chemical Sciences
Burroughs-Wellcome Fund Statement release February 23, 2009: “After careful consideration, we have decided to suspend the usual slate of grant programs for fiscal year 2010, which begins the fall of We will not be accepting applications for any of our programs except for our two newest, the Pre- Term Birth Initiative and Career Awards for Science and Mathematics Teachers” “Last November, we sent notices to our faculty awardees alerting them that, although we will pay the full amount of their grants, we would do so over an extended pay period. This action has allowed us to preserve our assets during these difficult times, enabling us better to be in a position to make new awards when the economy improves.”
William and Flora Hewlett Foundation Statement released October 29, 2008: “The foundation plans to increase the percentage of its endowment that will be paid out in grants in 2009 to help compensate for a recent sharp decline in its assets. Despite the increased payout rate, the foundation anticipates that its overall grant-making in 2009 will likely decline by 5 – 7%. In addition, the foundation will probably not embark on some new initiatives it otherwise might have considered.”
Jane Coffins Child Memorial Foundation and Helen Hayes Whitney Foundation Jane Coffins Child -- Committed to continuing its postdoctoral fellowship funding, and aiming to keep the number of fellowships funded per year at about twenty – but expects that it will have to fund a couple of fewer fellowships this year. Helen Hayes Whitney Foundation – Has already cut back the number of fellowships awarded from 23 to 20; expects a further drop in the number of fellowships funded this year. Damon Runyon Cancer Research Fund is facing a similar situation.
The Medical Foundation (TMF): Farnsworth Trust Scholars Program in Aging Research The Farnsworth Trust Scholars Program in Aging Research supports established researchers and policy analysts, will not be offered for the 2009 cycle. Patterson Trust Fellowship Program in Brain Circuitry will not be offered for the 2010 cycle. All other TMF-managed funding programs remain intact. (See “good news” section).
David and Lucile Packard Foundation Intends to honor current grant commitments and increase payout rate from endowment. However, the absolute dollar amount of grant making will be down.
Starr Foundation Statement released September 25, 2008: “With the value of its holdings in American International Group plunging 93% over the past year, the Starr Foundation, which is financed largely by AIG stock, has been forced to reduce its grant-making and either defer or cancel many new initiatives. While new proposals will be put on hold, the foundation will honor its existing commitments.” Smaller grants are predicted for the future. New initiatives will be postponed or cancelled entirely.
Carl and Ruth Shapiro Family Foundation Announced recently that it will award no new grants in 2009 due to $145 million loss resulting from Madoff investments. Enormous impact for Boston-based organizations, which received more than $100 million from the foundation over the past decade. (Awardees include Brigham and Women’s Hospital, Brandeis University, Boston Medical Center, and Beth Israel Deaconess Medical Center, to name just a few). The foundation expects to honor its current commitments for both capital projects and multi-year grants.
Other Madoff-Impacted Foundations Picower Foundation, which has given some $268 million to a range of organizations including the New York Public Library and the Picower Institute for Learning and Memory at MIT, is shutting down. The JEHT Foundation, which directed its funding towards the promotion of justice, equality, and human dignity, has also closed.
James S. McDonnell Foundation Proposal guidelines include the following requirement: “A letter from the appropriate administrative official at the sponsoring institution stating that the institution, as the official grantee… understands and agrees that the award payments may be paid in stock.” Not necessarily related to the current economy, but an interesting spin given the circumstances!
The better news is that some foundations have been energetically counting their pennies… and it seems there is still some funding left…
Howard Hughes Medical Institute Gilliam Fellowships for Advanced Study Program expanded from five to nine fellowships per year. (Fellowships are intended to further the graduate science education of talented students from disadvantaged backgrounds who have worked in the labs of top HHMI scientists). Up to $25 million in new grants will be awarded via an expansion of the “Med into Grad” initiative, which aims to support the development of graduate training programs that incorporate an understanding of the principles of medicine and disease into the education of PhD researchers. (Awarded to institutions).
Bill and Melinda Gates Foundation Intends to award $3.8 billion in grants in This is less than the foundation had anticipated giving away, but still an increase over the funding it distributed last year. Encouraging other private and government funders to keep making grants, despite/because of current hardships.
Ellison Medical Foundation Committed to providing $40 million in Scholars Awards in The only change being considered is a redistribution of foundation resources to once again fund infrastructure awards. Infrastructure awards were put on hold three years ago in order to double the number of Scholars Awards provided, as a counterweight to diminishing pay-lines at NIH. Should NIH funding increase, infrastructure awards will be resumed.
Searle Scholars Program Major increase in awards from $240,000 to $300,000 per award in January Fifteen grants, which are among the top monetary awards for exceptionally creative young scientists in chemistry and the biomedical sciences, are awarded per year. No changes anticipated for the foreseeable future.
The Medical Foundation (TMF): Most Funding Programs The vast majority of TMF-managed funding programs will remain active: Charles A. King Trust Postdoctoral Fellowship Program Charles H. Hood Foundation Child Health Research Awards Davis Foundation Postdoctoral Fellowship in Eating Disorders Research Deborah Munroe Noonan Memorial Research Fund Edward M. Kennedy Scholars Award in Health Policy Research Goldhirsh Foundation Research Awards Program Klarman Family Foundation Grants Program in Eating Disorders Research Lymphatic Research Foundation Awards Programs Smith Family Awards Program for Excellence in Biomedical Research
The Ford Foundation Statement released December 15, 2008: “The Ford Foundation has announced that it will honor all outstanding commitments to its grantees and will increase, in 2009 and 2010, the percentage of endowment that is paid out in grants.” Ford’s president, Luis A. Ubinas noted that the foundation was “highly liquid,” ensuring the capacity to continue making grants without disruption. Ford also instituted a series of aggressive internal cost controls early in 2008 that have helped make more funds available for grant-making.
John D. and Catherine T. MacArthur Foundation Statement released November 17, 2008: “The MacArthur Foundation understands the importance of philanthropy in difficult economic times. While our endowment has declined this year, we remain committed to being a long-term, steady funder… In past recessions, we maintained our grant- making level, and we intend to do so again now. Our total philanthropy is increasing from 2007 to We also expect to maintain or increase our grant-making in 2009, despite the performance of the market to date.”
Carnegie Corporation of New York Statement released December 19, 2008: “… No sector has been immune to the downturn, not you and not Carnegie Corporation of New York. Given the gravity of the situation, we know that there are no simple answers to the challenges that we all face. What is certain, however, is that we remain committed to our grantees and to carrying out Andrew Carnegie’s vision of philanthropy… We are focused today on making certain that all our grantees… know that Corporation support will be there for them. Most important of all, we are committed to fulfilling all the grants that have been approved.”
Andrew W. Mellon Foundation Statement released November 5, 2008: “The Andrew W. Mellon Foundation has certainly experienced some of the effects of the current financial environment. Nevertheless, we do not foresee significant retrenchment or dislocations in our grant-making. All existing commitments will be honored, and the Foundation will continue to be alert to the needs of grantees as circumstances develop.”
John Templeton Foundation Statement issued in July 2008: Assets are expected to increase 50% by the end of 2009 following the death of the foundation’s founder.
Robert Wood Johnson Foundation Statement released October 30, 2008: “The Robert Wood Johnson has been affected directly by the turbulence and downturns in the financial markets over the past few months. Yes, our financial assets are lower than they were earlier this year. But the long-term nature of our mission and our objectives… dictate that we not react to daily fluctuations in the financial markets…. For 2009, we expect our program budget for grants to be approximately the same as 2008 levels, unless future financial circumstances warrant a course correction.”
Alfred P. Sloan Foundation Statement issued October 22, 2008: Announced grants totaling $2.7 million as part of a new initiative to study the ongoing financial markets crisis and improve public understanding of economics and finance. Grants awarded to the Brookings Institution, NBER, the Wharton Financial Institutions Center, and the NewsHour with Jim Lehrer.
The answer is: We don’t know. Harvard FAS’ Sciences Division has active funding from 111 private foundations, total. All those that have released statements or responded to phone calls are noted here. What About All Those Other Found- ations?
The Foundation Center has launched an on-line news room, called “Focus on the Economic Crisis, that provides ongoing updates, reports, and other resources: Foundations that fund the sciences are tougher to track. How Can We Prepare for What’s Coming Next?
To summarize: The daily headlines have got all of us expecting the worst…
There will likely be enough funding available to keep our scientists doing their science… But with a lot of commit- ment and creativity, and perhaps just a little bit of luck…
And our scholars immersed in their papers and books…
And then our faculty can stop worrying about finding money and go back to scaling new (intellectual) heights… If we are lucky, it won’t be too long before the crisis passes….
Those of us who support them can kick up our heels and enjoy the good times… And, relatively speaking, of course…
Questions and comments are welcome! Tara Murphy Director of Research Development FAS Research Administration Services Harvard Faculty of Arts and Sciences