Newspaper article The Christian Science Monitor

As Economic Crisis Deepens, Private Foundations Step into the Breach

Newspaper article The Christian Science Monitor

As Economic Crisis Deepens, Private Foundations Step into the Breach

Article excerpt

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.

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:

* Silicon Valley Community Foundation has pledged an additional $5.2 million to assist safety-net service providers in California's Santa Clara and San Mateo counties.

* The John D. and Catherine T. MacArthur Foundation has invested more than $38 million to help homeowners and renters in Chicago's low-income neighborhoods.

* In Texas, the Michael and Susan Dell Foundation gave 33 "surprise" grants in November to organizations helping children in central Texas, to fill unexpected gaps in their operating budgets.

* The GE Foundation, General Electric's philanthropic arm, donated $10.5 million to United Way of America, the largest single commitment for shelter assistance and homeless services so far.

"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 (

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.

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. …

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