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.
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While its region is relatively affluent, Silicon Valley Community Foundation found during grant planning last year that unprecedented changes were occurring, beyond those experienced during the dotcom bust. The Second Harvest Food Bank, for example, received more requests than at any time in its 34-year history, many of them from people who had never asked for help before.Skip to next paragraph
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“Even a year ago, we started to learn about foreclosures, the lack of financial literacy among people, initial job losses,” says Emmett Carson, the foundation’s CEO and president. “We were listening early on to the canaries in the mine, so that enabled us to build strategies which now appear to be right on point.”
After an initial $1 million grant from its own endowment, the foundation approved an additional $1 million challenge grant, which brought in $1.7 million from the community in seven weeks. It promoted a few local organizations serving those in need on its website and garnered another $1.5 million.
“There is still tremendous accumulated wealth in this community – and people who care,” Dr. Carson says of the $5.2 million they created and leveraged in recent months to give to 47 nonprofits serving those in need.
Corporate foundations tend to focus giving nationally, in line with their areas of operation. Bank of America Charitable Foundation, Countrywide Charitable Giving, and the Kresge Foundation, among others, have donated resources toward the foreclosure crisis.
“A lot of the corporate giving is focused on housing and foreclosures, and this is not an area foundations typically fund,” Lawrence says. “This shows they are willing to innovate.”
Yet corporate support may be limited, since almost a quarter of grant dollars in 2006 came from foundations in the banking and financial sector, he adds.
The MacArthur Foundation has mounted a major effort for its hometown.
President Jonathan Fanton announced in late 2008 that it will devote $68 million in grants and low-interest loans over two years “to keep homeowners in their homes, assist renters forced to move as a result of foreclosure, and help the City of Chicago put vacant foreclosed houses back into productive use as quickly as possible.”
Its goals are to reach 10,000 households, prevent at least 2,700 foreclosures, provide counseling to 6,000 homeowners, and leverage more than $500 million in financing to keep neighborhoods from declining.
Three foundations are focused on the big picture: finding out how this economic debacle came about so as to avoid a similar crisis in the future.
“That’s tremendous foresight when we are clearly still in the midst of this,” Lawrence says.
Yet for those on the front lines, grantmaking is only part of the job. None of the safety-net providers can provide emergency housing and services to cover thousands of laid-off persons just with foundation grants and individual donations, Carson says. “So we see part of this as working with city, county, and state governments to fashion partnerships – and to create a systematic response to the problem.”