As economic crisis deepens, private foundations step into the breach
Some 50 of them pledge more than $100 million to help those affected by the economic crisis.
As debate continues in Congress on how best to give a genuine boost to the troubled economy, some of the nation’s foundations have responded quickly to the crisis in their local communities and nationally.Skip to next paragraph
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Despite being hit hard themselves by the stock market’s decline, close to 50 foundations have committed more than $100 million so far toward efforts to reduce foreclosures, provide financial counseling, and shore up services to the rising numbers of jobless and homeless.
A variety of foundations, from community to family to corporate, have taken the initiative. For instance:
“The typical way a foundation responds [during an economic downturn] is by trying to hold giving as stable as possible, but some have made exceptional commitments,” says Steve Lawrence, senior research director at the Foundation Center, in New York.
The center is monitoring daily the philanthropic community’s response to the crisis on an interactive website (foundationcenter.org/focus/economy).
The future remains cloudy for foundations themselves. A survey by the Chronicle of Philanthropy released last month found that many had lost almost one-third of their assets. Of the 73 grantmakers that provided data for 2009, 39 foundations plan to decrease their contributions this year, 22 say their grantmaking will stay about the same, and 12 plan an increase. Some are cutting back on travel, conferences, and staffing.
Overall giving will probably be down in 2009, says Dr. Lawrence, and there could be an even bigger negative impact in 2010. Large foundations determine grant budgets based on a rolling average of asset values over a three to five year period.
“While 2008 was a bad year, 2007 was good, but we may run out of good years,” Lawrence explains. “It depends on how the market fares.”
Community foundations have clearly taken the lead in responding to needs for human services in their local areas.