Nationwide, charitable foundations, which are heavily invested in the stock market, are wringing their hands over the economic downturn that has seen the market plunge more than 40 percent since last October.
Private foundations — and the amount they give — are wedded to that falling market. Federal tax laws require them to distribute 5 percent of the value of their investment assets, whether that value is based on the previous year's bottom line or an average of several years.
As the assets go, so does giving.
The severity of the economic turmoil has foundation leaders uneasy about their ability to give, since they rely on healthy assets to hand out greater amounts of money.
"We've never seen this in our lifetime," said Monica Wroblewski, spokeswoman with the Council on Foundations, a nonprofit association in Arlington , Va. "Who knows what ramifications this will have?"
[The Akron Beacon Journal]