In tough times, tough choices for grant makers

HAVING YOUR SAY

December 19, 2008|By Lynn Homeier Rauch and Betsy S. Nelson

The Baltimore region is blessed with a large number of grant makers: corporate giving programs, family and private foundations (local and national), giving circles, and donor-advised funds. The grant-making community in our area is alive, well - and very worried.

Bad economic times mean greater challenges in meeting even the most basic human needs for food, shelter, and clothing. These conditions impact the very groups that serve the needy. We have already heard about a small community organization that bought office equipment with a loan it is now unable to repay. A building campaign at an area university will not go forward because the institution's line of credit has been revoked. A Baltimore nonprofit finds itself with just a 2 percent cash reserve, not enough to meet its budget as annual fundraising fails to meet targeted goals.

Bad economic times hit grant makers hard, too. Foundation assets are shrinking rapidly, with some down by 30 percent or more this year. The corporate world is changing and putting corporate giving programs in double jeopardy: declining profits coupled with loss of local control. Family foundations are seeing their investment returns decrease just when many have made multiple-year commitments to causes they believe in.

But grant making is based on optimism and a conviction that we as grant makers can make the world a better place by funding worthy causes. Our optimism is being sorely tested. Grant makers have an obligation to reach out in times like these to help the needy and to increase that help if they can. But many also feel an obligation to the donors who established the philanthropy in perpetuity, believing that a foundation's assets should be preserved so that the funds can continue to provide resources for future needs.

It is challenging to determine how best to balance the need to preserve grant-making capital with responding to requests that are important for the health of our region. Each grant maker will decide how conservative or aggressive it should be for 2009. Some foundations will choose to slow the payout of grants already committed. Others will stop making multi-year pledges. A few may have to consider revoking grants already made. And some will dig a little deeper to respond to this storm. All will be looking more carefully at how their grantees manage and plan for difficult times.

We give to our communities because we can and because we care. We are optimists because we know that we can make our world a better place. We must commit ourselves to that purpose, and respond as generously as possible now more than ever.

Lynn Homeier Rauch is trustee of the Kentfields Foundation and president of the Association of Baltimore Area Grantmakers. Betsy S. Nelson is executive director of the association.

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