Foundations have lost an average of 30 percent of their assets due to the plunge in the stock market, predicts the leader of a major association of grant makers.
And that loss has come as the organizations these foundations support are facing a huge upswing in demand, Steve Gunderson, president of the Council on Foundations, said in an interview with The Chronicle of Philanthropy. (Audio excerpts from the interview with Mr. Gunderson are available here.)
“The need is greater, and the resources are less,” he said, summing up the challenge facing philanthropy in the face of the economic downturn.
Because of stock-market losses, many charitable funds have been forced to scale back their grant making, Mr. Gunderson says.
Despite the financial problems, Mr. Gunderson says the council has been “incredibly moved” by the creative way foundations have tried to help hard-hit families and cash-strapped nonprofit groups.
For example, he says foundations are rethinking their investment strategies to better use their asset portfolios to support social and environmental causes in response to the downturn.
In other cases, grant makers are bringing together local leaders from the nonprofit world, business, and government to hammer out economic recovery plans for their areas.
“I don’t think there’s any doubt that when history looks back on this economic crisis, one of the really positive chapters will be philanthropy’s response,” he says.
In October, Mr. Gunderson and Ralph Smith, the chairman of the council’s board, wrote a letter to the organization’s 2,000 or so members, asking them to consider doing more to support struggling charities.
Some people have criticized the letter, however. They say the council should have explicitly told philanthropies to give more money and overlook concerns that such an increase in contributions would hurt their ability to remain in existence.
Mr. Gunderson says he appreciates the critics’ point, but says the council must respect the different goals philanthropies have and asking all of them to increase their giving at this time would have been inappropriate.