Charitable foundations responded quickly to the recent economic crisis, targeting grants to communities with the greatest need and at a time the crisis was putting stress on their own financial resources, a new study says.
“We find that foundations have — quietly, expertly and quickly – supported American individuals, families and communities in need,” says the study from The Philanthropic Collaborative.
Written by Doug Holtz-Eakin, president of the American Action Form and a former director of the Congressional Budget Office, the study analyzed a sample of 2,672 grants totaling $472 million for the years 2008 to 2009, and early planned giving for 2010, obtained from the Foundation Center.
Foundation’s response to the crisis was “timely and flexible,” with early action focusing on housing and then shifting to general economic aid as the crisis spread more broadly.
Throughout the economic crisis, for example, foundations sent more grants to states experiencing relatively more severe mortgage delinquency problems.
Private grant dollars also flowed to states with relatively high unemployment rates, especially in later stages of the crisis when employment became a bigger problem.
The efforts by foundations during the crisis were “significant,” the study says, “especially in light of the blow to their financial resources dealt by the very crisis to which they were responding.”
According to a report by the Foundation Center, cited in the study, foundations cut their giving to nonprofits by only 8.4 percent in 2009 even though they lost a record 17 percent of their assets in 2008.
The study says its analysis of the data is “broadly supportive of the responsiveness of foundations to altering the mix of their activity and resources to the pressures created by the economic crisis.
Government “was not the only responder to the economic crisis,” the study concludes. “Foundations responded in a targeted and timely manner, with grants appropriately directed toward communities with the most need.”