Cheerleading in the Crisis

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 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.

 

Comments

[Shahryar Minhas]

08:18 PM on 06/16/2010

The Philanthropic Collaborative’s paper focuses on how funders reallocated resources during the downturn, but a recent study from my organization, the Center for Effective Philanthropy (CEP), sought to understand how those who receive funders’ resources—grantees—perceive those funders’ reactions to the downturn. What we found, after an analysis of data from over 6,000 grantees of 37 funders, suggests that, from the perspective of grantees, funders could have certainly done more. In fact, when asked how helpful funders have been during the downturn, a third of grantees indicate that their funders have not helped them at all in responding to the economic downturn. When asked how clearly, if at all, foundations had communicated with grantees about their response to the economic climate, 30 percent of grantees indicate that their funders hadn’t even communicated with them. Overall, the results of our survey paint a bleak picture of funder-grantee relationships during this time of crisis. Our full report is available here: http://www.effectivephilanthropy.org/assets/pdfs/CEP_DatainAction_ATimeofNeed.pdf.