Foundations Responded Strongly to Crisis: Study
Did the country’s foundations pull back hard to preserve capital during the worst of the economic downtown – or did they respond quickly to societal needs in hard times? A new study suggests the latter. The Philanthropic Collaborative study, authored by economist Dr. Doug Hotlz-Eakin, found that foundations targeted in their response to the worst economic crisis since the Great Depression – and made a significant impact.
“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 Holtz-Eakin of the study. “During the U.S. 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.”
The study analyzed a sample of 2,672 grants that totaled $472 million of foundation giving from 2008 to 2009, and early planned giving for 2010. In the area of preventing mortgage delinquencies and foreclosures, private and community foundations saturated their grant-making in states with higher than average delinquency rates. In 2009, for example, 95% of sampled grant-making, or $296 million, went to high-delinquency states. As unemployment became a larger economic problem between 2008 and 2010, the analysis shows foundations devoted more activity to states suffering higher unemployment.