Here we are then, in 2011. Most all of us are trying to adjust to the new economic reality. U.S. foundations are not immune from this exercise. The cautious pronouncements regarding the state of the nation’s economy have grown more optimistic these past weeks. It was buoyed on the wave of an up-tick in holiday shopping that signaled growing consumer confidence. This modest boost in economic activity is indeed welcome news, though it is clear that South Florida is far from home and a long way to go in its journey toward economic recovery.
Though the “Great Recession” was declared by economists to have officially ended last year, it still feels as though we got up as a nation from a holiday table having indulged in every matter of rich and delicious fare; and now, with our guests departed, we return to our kitchens to face the vast pile of dirty dishes, pots, and pans, the countertops overflowing with leftovers, all of which signal an unrestrained, over-the-top, celebration. Taken as a metaphor for our economic recovery, the gilded goose has been followed by an aftermath of millions of families doing kitchen clean-up duty, as they struggle to set their houses right and return to some state of normalcy. Their pampered guests, meanwhile, have gone on to the next party, oblivious to the scene of chaos left behind. A little shopping for the kitchen-weary goes a long way in such circumstances.
These past months, my foundation colleagues have shared stories of how they, too, are coping with change, and assessing the impact of a weak economy. A recent report issued by the national Foundation Center tells the story in broader strokes. The sum of their introspection is that the recession has significant consequences for foundation operations. Expect grantmaking programs to be re-engineered.
The report confirms, not surprisingly, some grantmakers expect the downturn to have a lasting impact, unable to bounce back from the erosion suffered as a result of the markets having gone awry and being caught with too much of a bad thing. Those stories resonate here at home. For others, the decline in assets is sufficient reason for some private foundations to take the step to give greater focus to grantmaking, closing their doors and alternatively roll assets over into a donor advised fund. The effect of the transition is to minimize administrative expenses and increase grants dollars dedicated to grantmaking. In such circumstances, the Community Foundation serves as an intermediary making the conversion for private foundations to a donor advised fund easily accomplished. Thus donor advised funds enable private foundation philanthropy to flourish still but within a charitable infrastructure that eliminates the overhead required to sustain a “retail” office.
In addition to its general assessment, the report also ventures a forecast for trends in foundation giving for 2011. It states slightly more than half of all survey respondents indicate their grantmaking will remain flat, with about 25% of respondents expecting a modest increase in giving for the coming year. Corporate giving is expected to rise, assuming businesses continue to sustain and grow in profitability. A smaller percentage of the foundations participating in the survey are less optimistic and expect their grantmaking to be lower than in years past.
Overall, the forecast for future giving is somewhat anemic but the report underscores signs of new life emerging among foundations after an economic winter. Organized philanthropy is strongly intact but you should expect significant adaptations in their approach to and practice of philanthropy. You are likely to be hearing much more about strategic grantmaking and witness the narrowing of priorities for which funding is available, not unforeseen news to those already experienced in grantseeking. There are also among Foundations significant rounds of belt-tightening going on to shed administrative pounds perhaps more readily acquired and more easily borne in more prosperous times.
A New Year’s is traditionally the time for resolutions. I know full well that most are seldom tethered sufficiently to the resolve necessary to materialize their success. But I remain optimistic. We all have the capacity within our reach to connect our caring with an act of giving. My resolution is to do a little more of that and, hopefully, see it paid forward many times over for a Happy New Year for all.
