May 01, 2008
Foundations Step Up Giving to Help Those Harmed by Bad Economy, Study Finds
By Suzanne Perry
Almost one-third of foundations say they have stepped up their giving this year to help families, provide human services, or support economic development — and 37 percent said they planned to increase such grant making next year, according to a study released today by the Council on Foundations.
However, a substantial minority, 43 percent, said they expected to give less next year overall because of declines in stock-market values — including 52 percent of community foundations.
The findings come from a Web-based survey by the Council on Foundations of 320 of its members in April about how they are responding to the recent economic downturn.
“Philanthropy’s endowments are feeling the same impact as every other American,” Steve Gunderson, the council’s president, told reporters on a conference call, adding that nevertheless foundations were increasing help to “those most in need.”
A report on the survey says many grant makers will be faced with tough choices over the next few years, however. “Sustaining both a focus on the issues facing those impacted by the economic downturn, and maintaining grant making as the stock market also declines will likely be a struggle for many foundations,” it says.
The council, which represents about 2,100 grant makers, conducted the poll as a way to highlight foundation activity in advance of a major philanthropy conference it is sponsoring just outside Washington starting this weekend. (Listen to an audio preview of the conference.)
The findings are consistent with a study The Chronicle released last month examining giving plans by the nation’s wealthiest foundations. It found that 40 foundations expected to give the same amount as they did last year, while five expect to give less. Nearly the same number — 46 — said they expect giving to rise by more than 3 percent.
Focus on Mortgage Aid
In other findings, about 15 percent of the respondents said they are making grants specifically to help people harmed by the subprime-mortgage crisis, and 9 percent said they will increase such aid next year.
Among efforts highlighted in the report:
- The Community Foundation Serving Richmond and Central Virginia made a $40,000 grant to a local housing organization to hire a foreclosure-intervention specialist.
- The John D. & Catherine T. MacArthur Foundation, in Chicago, is paying for new efforts to help people avoid foreclosure and to get defaulted properties back into productive use. The report describes it as a multi-year project involving $8-million in grants and up to $60-million in “program-related investments.” (A MacArthur spokesman said he could not provide details yet, but in March, Jonathan Fanton, the organization’s president, said that the foundation would soon announce a project to work with the city and several local organizations to provide grants for counselors and low-interest loans to financial institutions to help certain borrowers get mortgages.)
- The McGregor Fund and several other foundations in the Detroit area are paying for an Office of Foreclosure Intervention and Response to coordinate efforts to help families facing foreclosure and protect foreclosed properties from vandalism. Dave Campbell, president of the McGregor Fund, said in an interview that his foundation has provided $50,000 to the Detroit Economic Growth Association for one year to create the office, while the Community Foundation for Southeastern Michigan provided $25,000 for one year, the Hudson-Weber Foundation $150,000 over three years, the Kresge Foundation $750,000 over three years, and the Skillman Foundation $175,000 for one year.
- The Mizuho USA Foundation, in New York, gave $100,000 to the Center for New York City Neighborhoods, a new nonprofit group created by the city to help homeowners at risk of foreclosure.
The survey also found:
- Eighty-six percent of foundations said they provide grants to help families or poor people, provide human services, or support economic development. Thirty-one percent said they had increased the value of such giving, and 5 percent said they started making grants to such causes this year.
- Of the foundations that plan to step up giving in those areas next year, 40 percent expect to reduce overall spending because of stock-market declines, suggesting they will have to divert grants from other areas.
- A majority (55 percent) of all foundations said the decline in stock market values would not affect their giving next year — but only 46 percent of community foundations said that, compared with 65 percent of corporate foundations.
“Our findings suggest that foundations are likely to face some difficult decisions in the not too distant future,” the survey report said. “Meeting the demands for grant making to aid families may require a shift away from other activities, or alternatively it may require reducing grant making across the board to maintain support for the full range of areas on which they have traditionally focused.”
Of the 320 survey responses, community foundations were overrepresented (41 percent, compared with 27 percent of council members) and corporate foundations underrepresented (7 percent of respondents compared with 12 percent of council members), the report said.
Previous: IRS to Offer Second Chance to Charities That Miss Disclosure Deadline
Next: Most Grant Makers Plan to Increase Giving in 2008