Stock market may affect charity donation

INDIANAPOLIS -- Downturns in the stock market last year could result in less money for some Indiana charities because foundations and endowments suffered losses on their investments.\nWhile experts say that over time the stock market is a fairly stable asset for foundations, some were hurt enough by market dips last fall that they might have to reduce their grant-giving this year or next year.\nThe Lilly Endowment, the nation's second-wealthiest foundation behind the Bill and Melinda Gates Foundation, saw the value of its assets fall about 17 percent in 2001, according to calculations by The Chronicle of Philanthropy.\nHowever, Gretchen Wolfram, spokeswoman for the Indianapolis-based endowment, said grant payouts were based on average assets over a longer period.\nThat means grants awarded by the endowment, with beginning-of-year assets of about $12.6 billion tied mostly to Eli Lilly and Co. stock, do not necessarily fluctuate as much as its assets, she said.\nThe nation's 56,000 foundations gave away $29 billion -- 5.1 percent more in 2001 than in 2000, said a study released this month by The Foundation Center in New York. That was the smallest increase reported since 1994 and significantly less than the 18.2 percent growth in giving posted in 2000, the study said.\nMore fallout from the stock market troubles is still to come, said Loren Renz, vice president for research at the center.\n"We expect it to show up in 2002, there's no question," Renz said. "By 2003, giving's going to decline."\nThe United Way of Central Indiana relies on local donations for its grants to service agencies. But it has set up an endowment so interest earnings could help pay for administrative costs.\nBy last year, that endowment covered a little more than half of those costs, and the organization wanted to increase that this year. Instead, it lost about $33 million -- nine to 10 percent -- on the portion of its endowment invested in stocks, said Dale DePoy, the organization's vice president and chief financial officer.\nOne foundation that probably will cut back is the Indianapolis Foundation, which bases its distributions for the current year on the value of its assets at the end of 2001.\nBrian Payne, president of the Indianapolis Foundation and the Central Indiana Community Foundation, said the community foundation's assets were down about 2.1 percent at year's end.\nThe Indianapolis Foundation, one of the 500 funds of the community foundation, will end up with about $150,000 less to distribute this year.\n"That's unfortunate," Payne said, "because certainly there's more need this year"