Robert Rubin, the United States Secretary of the Treasury during the Clinton administration, told grant makers at the meeting that the nation’s economy was facing “the most complex set of circumstances” in his lifetime.

Mr. Rubin, director of the executive committee of Citigroup, the financial-services firm in New York said the abnormally long period of economic growth preceding the current downturn was atypical of the usual cycles in the economy. He also warned that development of new “complex financial instruments” during the boom years and disruptions in the credit markets created a potential “perfect storm” of economic instability.

Foundations, he said, therefore may end up earning less on their endowment investments over the next one to three years when compared with the investment growth achieved in the past 20 years. Meanwhile, he predicted that that foundations could end up facing “tremendous fiscal pressure” as the need for their services increase and government resources are reduced.

“What do to in the face of this is a philosophical judgment,” he said.

Michael Rubinger, chief executive of the Local Initiatives Corporation, the community development grant maker in New York, shared the stage with Mr. Rubin, and said in the face of a protracted downturn “it might be time for foundations to dip into their endowments.”

Mr. Rubin also said he was “skeptical” of program related investments—foundation investments made in support of charitable causes designed to bring a financial return. He said foundations’ missions are better served by achieving the maximum earnings they can safely achieve from their investments with the goal of increasing their grant-making ability.

Mr. Rubinger responded by saying he didn’t necessarily see a trade-off between program related investments and grant making.