Grant Makers Believe They Did A Good Job

May 10, 2010       Mark Hrywna      

Foundations were swift and flexible in responding to the economic crisis, with grants first addressing the mortgage delinquencies and then focusing on unemployment, according to a newly released study.

Consistent with past studies of foundation grantmaking in times of disaster, such as the Sept. 11, 2001 terrorist attacks and Gulf Coast hurricanes of 2005, government “was not the only institution to react to the economic crisis.”

“Responding In Crisis: An Early Analysis of Foundations’ Grantmaking During the Economic Crisis,” a fawning report that describes foundations responding in a targeted and timely manner, directing grants toward communities with the most need in spite of their own financial distress. The study was released today (May 6) by The Philanthropic Collaborative (TPC), a coalition of charities, foundations and elected officials that is “dedicated to educating policy makers regarding the economic value of foundations and the work they do to improve America’s communities.”

The report is considered by some to be the first formal analysis of the grantmaking activity of foundations in response to the current economic crisis. TPC analyzed 2,672 grants totaling $472 million of foundation giving from 2008 to 2009 and early planned giving for 2010. Recipients were located in 47 states and grants averaged $176,608, ranging from $500 to $5 million. Information was compiled from the Foundation Center, which maintains the most comprehensive database of foundations’ grant-making activities.

The report concluded that foundations sent more grants to states experiencing relatively more severe mortgage delinquency problems and grant money went to states with relatively high unemployment rates, especially in the later part of the crisis.

For instance, in 2009, there were 1,157 grants made to recipients in states with higher than average delinquency rates in the previous year compared with 352 grants made in states with lower delinquency rates. “In short, there is strong evidence that foundation grantmaking was quickly and effectively targeted on the emerging problem areas,” the report noted, citing examples such as support for the Detroit Office of Foreclosure Prevention and Response by the Kresge Foundation and Skillman Foundation. Rising unemployment rates followed the housing market meltdown. Data indicated that more grants and resources in 2009 flowed to states with relatively higher unemployment rates ($200 million versus $112 million), with the pattern continuing into 2010 ($3.6 million versus $567,000).

“The ability of foundations to be swift and flexible in their response allowed them to modify their giving throughout the crisis and ensure the grants went to those most in need,” said Doug Holtz-Eakin, author of the study. “During the economic collapse, we saw grant-making shift, expand and follow the larger unemployment and housing needs that developed and became acute in communities across the country. Even when foundations themselves faced financial stress from the very same crisis, our analysis shows a very clear shift in grant-making patterns to meet emerging economic needs,” he said.