Giving by Grant Makers Reflects Economic Malaise

Almost one third of foundations say they have stepped up their giving this year to help families,

provide human services, or support economic development — and 37 percent said they planned to increase such grant making next year, according to a study released by the Council on Foundations.

However, a substantial minority, 43 percent — and 52 percent of community foundations — said they expected to give less next year overall because of declines in stock-market values.

The findings come from an online survey in April of 320 members of the Council on Foundations about how they are responding to the recent economic downturn.

“Sustaining both a focus on the issues facing those impacted by the economic downturn, and maintaining grant making as the stock market also declines will likely be a struggle for many foundations,” a report on the survey says.

Mortgage Crisis

In other findings, about 15 percent of the respondents said they are making grants specifically to help people harmed by the subprime-mortgage crisis, and 9 percent said they will increase such aid next year.

Among efforts highlighted in the report:

• The Community Foundation Serving Richmond and Central Virginia made a $40,000 grant to a local housing organization to hire a foreclosure-intervention specialist.
• The John D. and Catherine T. MacArthur Foundation, in Chicago, is paying for new efforts to help people avoid foreclosure and to get defaulted properties back into productive use. (A MacArthur spokesman said he could not provide details yet. But in March, Jonathan Fanton, the organization’s president, said that the foundation would soon announce a project to work with the city and several local organizations to provide grants for counselors and low-interest loans to financial institutions to help certain borrowers get mortgages.)
• The McGregor Fund and several other foundations in the Detroit area are paying for an Office of Foreclosure Intervention and Response to coordinate efforts to help families facing foreclosure and protect foreclosed properties from vandalism. Dave Campbell, president of the McGregor Fund, said in an interview that his foundation had provided $50,000 to the Detroit Economic Growth Association to create the office, while the Community Foundation for Southeastern Michigan provided $25,000, the Skillman Foundation made a grant of $175,000, the Hudson-Weber Foundation gave $150,000 over three years, and the Kresge Foundation gave $750,000 over three years.
• The Mizuho USA Foundation, in New York, gave $100,000 to the Center for New York City Neighborhoods, a new nonprofit group created by the city to help homeowners at risk of foreclosure.

The survey also found:

• Eighty-six percent of foundations said they provide grants to help families or poor people, provide human services, or support economic development. Thirty-one percent said this year they had increased the value of such giving, and 5 percent said they started making grants to such causes.
• Of the foundations that plan to step up giving in those areas next year, 40 percent expect to reduce overall spending because of stock-market declines, suggesting they will have to divert grants from other areas.
• A majority (55 percent) of all foundations said the decline in stock-market values would not affect their giving next year — but only 46 percent of community foundations said that, compared with 65 percent of corporate foundations.

“Our findings suggest that foundations are likely to face some difficult decisions in the not too distant future,” the survey report said. “Meeting the demands for grant making to aid families may require a shift away from other activities, or alternatively it may require reducing grant making across the board to maintain support for the full range of areas on which they have traditionally focused.”

Of the 320 survey responses, community foundations were overrepresented (41 percent, compared with 27 percent of council members) and corporate foundations underrepresented (7 percent of respondents compared with 12 percent of council members), the report said.

A report on the survey, “Foundations Support Families Hit by Economic Downturn,” is available online.