Philanthropies Come to the Rescue When Government Comes Up Short

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Published May 02, 2009

| FoxNews.com

It's the year of the government spending solution: $700 billion in TARP funds, $787 billion in the stimulus bill and a proposal from the president to adopt a budget of more than $3 trillion.

Lost in the tidal wave of government greenbacks is the private solution: the contributions of foundations, corporations and private volunteer organizations that are continuing to step up to help a nation in need.

Traditionally, these philanthropies and corporations have invested private or corporate wealth in the stock market and used the interest to support causes in their community and around the world.

Now, despite enormous stock market losses, they are continuing to do so -- even dipping into their endowments to make it happen.

“Philanthropy can serve as a means of supporting the government’s priorities at this time,” said Charles Moore, executive director of Committee Encouraging Corporate Philanthropy.

“We can usually react to changing community needs more quickly than a government entity,” said Scott Tennant, spokesman for The Cleveland Foundation, which has given out more than $1 million in recent months in response to the economic crisis.

That includes $110,667 to Adoption Network Cleveland, which had lost funding due to county budget cuts. The foundation's contribution has allowed some 700 foster children to continue receiving services.

The Michael & Susan Dell Foundation is also acting to protect funding for services to children. In November, with many of its grantees reporting unexpected gaps in their operating budgets, the foundation responded by awarding $3.3 million in surprise grants of $25,000 each, and 33 agencies throughout central Texas got what they needed to stay in the black.

"We felt that given the economy, the time of year and the extraordinary work that the grantees were doing, that this was the right thing to do," said spokeswoman Megan Matthews.

But it's not easy to open the wallet in a severe recession -- even for a philanthropy.

A 2009 Foundation Center survey of more than 1,200 U.S. foundations showed that close to two-thirds of respondents expect to reduce grants this year, and more than half will rely on other methods, such as providing volunteers, to support their non-profits.

That same survey found that 168 foundations were launching a direct response to the economic crisis -- an economic stimulus of their own, including grants to food pantries, homeless shelters, and support to programs mitigating foreclosures and helping people repair their credit.

Instead of trillions of dollars, it is millions of dollars, but just like the president's stated priorities for government action, the private sector response is timely, targeted, and temporary. Philanthropies maintain ongoing relationships with donors and their communities, so they’re more likely to know about immediate needs, and many have boards of directors that meet at least four times a year, allowing them to award funds quickly.

Meeting Basic Needs

As food and shelter providers become overwhelmed, philanthropies are stepping up, over and above their existing giving.

In December, the GE Foundation, the philanthropic organization of the GE Company, directed more than $20 million in funding to food and shelter organizations.

“Families are facing one of the worst economic recessions of our lifetime, forcing many to seek food and shelter services,” foundation president Bob Corcoran said in a statement. “GE Foundation has reprioritized its 2009 programs and is reallocating funds to support agencies whose prime mission is responding to these basic needs.”

In February, the Cargill, Inc. Corporate Giving Program donated $3.9 million to national food networks to make sure they could provide for the influx of people suddenly needing help providing food to their families.

“Hunger relief agencies are facing a growing demand for their services at a time when donations are shrinking,” said Greg Page, Cargill's chairman and chief executive officer.

Stemming the Tide of Foreclosures

While Congress continues to hammer out a mortgage bill, philanthropies have also taken the lead in preventing and mitigating foreclosures.

The John D. and Catherine T. MacArthur Foundation has dispensed more than half of a pledged $68 million in grants and low-interest loans to prevent and mitigate foreclosures in Chicago, where the foundation is located.

"The scale of the foreclosure crisis threatens to disrupt hard-won gains in many of Chicago's lowest-income neighborhoods," MacArthur President Johnathan Fanton said in a statement. "Nowhere is this work more urgent and nowhere is it more important to us than in the city we call home."

The Ford Foundation has also focused on reducing foreclosures, giving more than $8 million to that effort, including a $2 million grant to Consumer Credit Counseling Service of Greater Atlanta to eliminate delays faced by homeowners in foreclosure. The foundation also gave $888,000 over three years to Legal Services of South Central Michigan to launch a statewide initiative to provide representation to homeowners facing foreclosure.

“Many of our areas of work focus on the very issues that the crisis has brought to the surface, so we are well-positioned to make useful contributions now and as things continue to unfold,” said Ford Foundation spokeswoman Fiona Guthrie.

In Washington State, corporations like Microsoft and Boeing are now partnering with the Seattle Foundation to raise $6 million over the next three years to provide comprehensive services to families in economic distress. In February, five agencies received grants of $250,000 each to stabilize housing through foreclosure counseling, to train families on how to stay out of debt, and to help people build toward long-term security.

“We will continue to monitor changing needs and service gaps – as the impact of public stimulus funding begins to take hold, “ said Molly Stearns, senior vice president of the Seattle Foundation.

One thing’s for sure – the impact of this private stimulus is already making a difference. Just last month, Seattle Foundation's Building Resilience Fund was able to provide living expenses so an unemployed single mom named Wendy could complete her degree, get a new job and keep her home.

And in Atlanta, where Consumer Credit Counseling Services is now using the Ford Foundation’s grant to create software to prevent foreclosure, they expect to stave off as many as 80,000 foreclosures a year.

"The Ford Foundation's grant will help us expand the reach of this new work, ensuring that more borrowers have access to high-quality credit counseling services," said Suzanne Boas, president of CCCS of Greater Atlanta. "Preserving homeownership is one of our agency's highest priorities, and this new software platform will help us save the homes of many Americans."

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