Market Turmoil Hits Gates Foundation: Reducing Grants by 300 Million+
I have been hearing ancedotally (based on very few data points) that charitable giving is not going to be that impacted by the current economic crisis. I don’t agree with this view, but apparently there is some evidence for this line of thought when looking at past recessions (according Philanthrophy2173). This time things are very different and there could be a fairly substantial impact on giving in general and on global health charities. There were two stories in the WSJ this week about the impact of the global economic meltdown on philanthropic giving. The first article states that even the Gates Foundation will be reducing donations by approximately 10% (they provide about $3 billion in funding per year which is how I came up with the $300 million figure).
The impact of this economic crisis will be widespread and will impact health in developing countries in the short run (we have already seen massive inflation in food prices and staples such as rice). Decreased funding flows will not only come from reduced giving, but from governments being forced to cut budgets (France is already cutting funding to NGOs), and also from worldwide layoffs of migrant workers who send hundreds of billions of dollars in remittances back home to support their families (on forecasts and drops in remittances see more here, here, here and here).
Below are a several articles you should check out if you care about this issue and about what the funding environment might look like over the next 12-18 months:
1. Gates Foundation Feels Pinch From Market Turmoil, Wall St. Journal 11/24/08, Link
2. Big Players Scale Back Charitable Donations, Wall St. Journal 11/25/08, Link
3. John Holmes – Impact of the Financial Crisis on Humanitarian Funding, Link
4. Comment on the MIT Course blog: Health in a Global Crisis, Link
*5. For a special review see a great post by Lucy Bernholz, Link