It’s The (Local) Economy – Stupid

The headline is a slight amendment to the mantra of political consultant James Carville who tells his clients to focus on issues of the wallet when campaigning. It was this refrain that has been central to many presidential campaigns.

Here’s the thing – Carville is both right and wrong.

A new survey from Exponent Philanthropy examining the top drivers of change for lean funders suggests that the local economy has more influence on philanthropic funding than national or global economic conditions.

 More than half of respondents (51 percent) to Exponent Philanthropy’s “Pulse Check Survey” responded that economic conditions in their local community are strongly or moderately influencing their philanthropy. This compares to 37 percent of respondents who said their giving was strongly or moderately influenced by the overall national economic environment, and 20 percent who said the same of the overall global economic environment.

“These findings highlight the role that philanthropies with few or no staff play in being responsive to the needs of the communities in which they live and support,” said Henry Berman, CEO of Exponent Philanthropy, based in Washington, D.C. “Lean funders are deeply connected to their communities and take a responsive, personal approach, which allows them to understand local needs and effectively catalyze change.”

Lean funders are foundations with few or no staff, philanthropic families, and individual donors, which represents the largest segment of philanthropy. Driven by personal passion and a strong desire to improve people’s lives, Exponent Philanthropy members are making an outsized impact in communities across the globe and in every issue area.

The Alice Virginia and David W. Fletcher Foundation, which assists charitable organizations in Maryland’s Washington County, addresses widespread social challenges such as poverty, addiction and education, and focuses on the local response to those challenges. The foundation has funded programs such as free clinics, a backpack program to feed hungry children, and a library in the community.

“While global and national economic conditions influence what happens locally, we can make the biggest difference in Washington County, so that’s where our focus is,” said William P. Young, Jr., executive director of the foundation. “Like many funders who live and work in the communities they serve, we’re able to really understand what the needs are locally and respond appropriately. We’re also able to adapt and evolve our giving quickly to create positive change.”

Other key findings include:

  • Slightly more than 38 percent of respondents said demographic shifts, which include racial and ethnic changes, age and economic shifts, among others, were driving change in their philanthropy; and,
  • The performance of financial markets ranks as the top driver of change, with almost 55 percent saying it strongly or moderately influenced their philanthropy. Financial markets directly impact the amount of money foundations and funders distribute.

For more information, go to exponentphilanthropy.org