Gates Foundation to slow growth in grants in 2009

The Bill & Melinda Gates Foundation plans to slow the planned growth in its grant making in 2009 in response to the troubled economy.

In a letter posted on the foundation's Web site, Chief Executive Officer Jeff Raikes said payouts will grow by about 10 percent in 2009, a smaller growth than previously planned.

The foundation projects it will make about $2.8 billion in grants in 2008, The Seattle Times reports.

Started by the Microsoft Corp. co-founder and his wife in 1994, the foundation has the international goals of overcoming hunger, poverty and disease. In this country, its focus is on education.

The foundation's wide-ranging investments have not been immune to Wall Street's woes, and the financial turmoil provides the first big hurdle for Raikes, who replaced Patty Stonesifer as CEO last September.

The foundation had an endowment valued at $35.1 billion as of Oct. 1, down $800 million from June, according to The Times.

"The financial crisis is affecting everyone, from our foundation to our partners. We know that it has hit our grantees, and the people they're trying to help, especially hard," Raikes said. "Nonprofit groups rely on steady funding to carry out their work, but with an uncertain economy and a volatile stock market, funders are having an increasingly difficult time meeting their commitments."

As the foundation explores its options, Raikes said employees have been asked to cut expenses.

However, Raikes said that the foundation will remain focused on education initiatives in the United States and fighting extreme poverty in developing countries.

"Within these areas, we'll continue to follow the evidence. We will make grants in the areas where the data tell us we have the best chance to make the greatest impact," Raikes said. "Even as we make our own grants, we also try to encourage other funders, such as governments, businesses, and other foundations, to do their part. This advocacy is especially important in tough times."

Raikes encouraged other entities to continue working toward funding charitable and social work.

"When government officials write next year's budgets, it may be tempting to cut back on the very programs our grantees care most about. We will continue to advocate, within the legal limits on lobbying, for funding and policies that advance the work we're doing with our partners," Raikes said.

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On the Net:

Gates Foundation: http://www.gatesfoundation.org