Posts Tagged ‘Philanthropic Collaborative’

Did foundations do enough in the economic recession? Clearly it is too early to say.

But the Philanthropic Collaborative has found reason to crow. Its new preliminary report offers analysis of a limited set of data—a sample of 2,672 grants totaling $472 million made by foundations in response to the crisis between 2008 and 2010.  A full report is due in December, but Responding in Crisis: An Early Analysis of Foundations’ Grantmaking During the Economic Crisis suggests that the majority of foundation grants went to states facing the severest mortgage delinquency problems as well as those encumbered by especially high unemployment rates. Foundation support was based on need: “Foundations responded in a targeted and timely manner, with grants appropriately directed toward communities with the most need,” the report boasts, calling the development “even more exemplary” in light of the fact that the foundations’ own assets took a beating in the recession.

The report’s lead author, Douglas Holtz-Eakin of the American Action Forum and former director of the Congressional Budget Office, served on a May 7 panel discussion at the Hudson Institute, where the Collaborative’s report was officially released. Also on the panel was Aaron Dorfman of the National Committee for Responsive Philanthropy, who called the report too sweeping in claiming success based on a sample that Dorfman said amounted to less than 1 percent of all grants over the period. He also took umbrage with the report’s assertion that foundations have been timely in responding to the crisis. Rather, Dorfman noted that the general grant application process seems as slow and cumbersome as ever, and in a time of economic uncertainty, foundations seem to be taking longer to make grant decisions. He went on to identify five things philanthropy should have done—and ultimately, could still do—to adequately respond to the crisis, from being more flexible in grantmaking to offering more support for advocacy and community organizing.

Actually, all panelists—which also included Steven Lawrence of the Foundation Center—agreed with one audience member, a foundation representative, that foundations are likely to be more skittish about offering multi-year grants as a result of the crisis because such longer commitments limit flexibility. That’s not promising.

The Collaborative’s report indeed may be a case of being too sanguine at a time when society is just emerging from recession. But it does contain useful examples of important work undertaken in times of economic stress. And, from that we may draw lessons.

—Jane Wales

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A Wall Street Journal article today from the end of last month highlights a threat to foundations nationwide. Members of Congress are saying that foundations have an obligation to use the money they save with tax exemptions  – money that otherwise would have gone to the federal government – where it will have the greatest impact on public good.  Meaning – where Congress thinks it will have the greatest good.  If they do not feel that foundations are doing this, they are threatening to get rid of charitable tax exemptions.

To counter this threat, a new organization called the Philanthropic Collaborative commissioned a research project to convince policymakers of the benefits of philanthropic dollars.  The study finds that foundations have a much more positive economic impact on society than we had thought, that “for the $43 billion that foundations spent on grants in 2007, they created direct economic benefits of $368 billion.”

Perhaps policymakers will find that the benefits of foundation work ‘as is’ will significantly outweigh any gains that could be gleaned by denying them their charitable deduction.

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