Grant funding 'safe in short term'

The economic downturn is unlikely to affect levels of grant funding for the next two or three years, senior charitable foundation figures have said.

David Emerson, chief executive of the Association of Charitable Foundations, said most foundations laid out their spending strategies two to three years in advance and should therefore be able to meet any agreed commitments.

Most would normally hold all money committed for grants in cash or near-cash assets, he said.

James Brooke-Turner, finance director at the Nuffield Foundation, said he did not know of any grant-makers planning to make short-term changes in their strategies, but admitted the long-term outlook was "more gloomy than rosy".

He said: "The Nuffield Foundation can sustain spending for the next two years, but after that it will depend on how long the market downturn has lasted. It will be harder if things don't smooth over in a year or two.

"The question is whether foundations can sit out the recession."

Robert Dufton, director of the Paul Hamlyn Foundation, said it had sustained mainly "paper losses" so far.

His organisation would have to review its grant-making policy if markets did not recover in the long term, but would not necessarily lower funding levels, he said.

"We intend to exist forever, so we're long-term investors," he said. "But we need to think about whether our money can do more good now or later.

"In difficult times, funders need to decide what issues will need greater support and what we can do to help."

Foundations also said they would be prepared to relax rules on funding to help organisations in financial difficulty.

"If charities are in trouble they should talk to their funders," said Emerson. "They are very willing to support charities facing short-term difficulties.

"They can make restricted funds unrestricted. They can change their funding patterns to help with cash flow."

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