Foundation Friday: Less may be more but it’s probably less

The Council on Foundations yesterday announced the results of its survey of 300 members about their plans to respond to the current economic downtown. As he introduced the report’s findings, Council President Steve Gunderson observed, “Philanthropies’ endowments are feeling the same impact as every other American.”

You’ll forgive the Nonprofiteer if she observes that this is a misuse of the faculty of identification. Foundations’ slightly-less-bulging coffers aren’t even analogous to the belt-tightening experience of actual American people, most of whom have no financial cushion of any kind and have experienced no benefit from years of soaring stock prices. Rather, Gunderson’s comment reminded the Nonprofiteer of the days when Al Franken, now a candidate for US Senate in Minnesota, was still just a comedian on Saturday Night Live. His shtick was to begin pointless speeches by saying, “You’re probably wondering how the changes in the tax laws will affect me, Al Franken,” whereupon his name would flash on the screen.

So if you were wondering how the economic downtown will affect us, the members of the Council on Foundations, the answer is that slightly more than half feel the pinch on their endowments but plan to continue or increase their giving to poor people while slightly fewer than half feel the pinch on their endowments and plan to reduce giving.

If now is not the time for all foundations to spend the investment gains of the past decade (well- or ill-gotten as the case may be), when is? But–apparently inspired by all those people in the for-profit sector who are always urging nonprofits to operate like businesses–nearly half of America’s big grantmakers are so focused on today that if today’s income declines because the economy is in a tailspin and charity is needed like never before, that’s cause for weeping and wailing and gnashing of teeth accompanied by a reduction in today’s grantmaking–though economists left, right and center agree that the treatment for reduced economic activity is for those with money to circulate more and not less of it. And at the same time they’re so focused on forever that their argument against making such expenditures is simply that if they spend it now it won’t be there–forever.

So while the report identifies a number of interesting projects to address specific aspects of the economic crisis (including the MacArthur Foundation’s soon-to-be-launched plan to purchase foreclosed homes in the Chicago area and recycle them as low-income housing), it doesn’t suggest any across-the-sector understanding that an economic collapse of this magnitude calls for something other than business as usual, in foundations as in politics.

The report does not say whether foundations planning to maintain or increase their spending on human services, economic development and support for low-income families plan to take that spending from a pot that used to nourish environmental initiatives or the arts. Gunderson noted that in earlier “national and natural disasters” like Katrina, increased foundation spending didn’t come at the cost of other areas; but of course those disasters didn’t hit foundations in the pocketbook and make them feel as vulnerable and impoverished as, well, “every other American.”

It’s important, of course, not to kill the messenger. What the Council on Foundations does in reporting on the inclinations of its members enables the operating part of the nonprofit sector to prepare itself, and for this we’re grateful. The Council’s report offers one more reminder that cultivating giving by individuals–who can certainly feel poorer this year than last, and reduce their giving, but who have a personal attachment to the charities they support–is something charities should begin doing immediately, if not sooner.


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