Transparency Talk

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Transparency, Trends, and Tools for Change
December 2, 2011

(Sara Gould, former president and CEO of the Ms. Foundation for Women, joined the Foundation Center in February 2011 in the role of The Atlantic Philanthropies Senior Fellow.)

Sara Gould"Unless the field sees five years of above-average investment returns, social justice grantmaking levels in 2015 will remain below 2008 levels." This key finding of Diminishing Dollars: The Impact of the 2008 Financial Crisis on the Field of Social Justice Philanthropy, a new report from the Foundation Center, may be startling, but it's hardly surprising given the slow recovery of the economy since 2008 and the recent volatility and uncertainty in financial markets. And yet, without the Cricket Island Foundation (CIF) taking the initiative to "do the math” necessary to bring greater transparency to the lingering effects of the downturn, this information – so vital to foundations, donors and advocates in the social justice arena – would not have come to light.

Diminishing Dollars: The Impact of the 2008 Financial Crisis on the Field of Social Justice PhilanthropyAmong other trends, the study illuminates both the importance, and the plight, of foundations with endowments of $50 million or less – the "small but mighty” foundations that very often form the bedrock of support for local and regional nonprofit organizations engaged in social justice work. These foundations put their money where their hearts are for social justice. In each of the years from 2005 to 2009, their social justice giving exceeded 70 percent of their total giving, rising to 80 percent immediately following the 2008 downturn. In those same years, the giving of their larger counterparts in the study hovered around 40 percent.

At the same time, small foundations are in an intense struggle to recover economically. Unlike larger foundations, their assets continued to fall from 2008-2009. Because of this, at an average (7 percent) rate of return, grantmaking levels of six small foundations in the study are projected to be 17 percent less in 2015 than in 2008. Although the number of foundations is small, the trend of diminishing dollars available for social justice work in communities across the country is real. And, smaller endowments will not be the only pressure felt by foundations in the social justice arena over the next few years. At a time when high unemployment and cutbacks in public funds mean that so many individuals and families are struggling to meet basic human needs, these foundations will face difficult decisions between funding service provision and investing in advocacy aimed at lasting policy and systems change.

Making difficult and controversial decisions requires trusted research and information, resources that are also invaluable assets in transparent communications with the wide variety of stakeholders in the philanthropic arena. The discouraging economic realities holding sway now in much of philanthropy are not going away any time soon, and they impact every major issue funders are trying to address. Let's continue to increase transparency for both grantmakers and grantseekers, by undertaking research that focuses on a wider group of foundations and making sure those findings are shared with stakeholders. With such efforts, transparency can drive strategy and, ultimately, positive social change.

What impact has the economic downturn had on your grantmaking? Has your cause or organization suffered from cutbacks in social justice grantmaking? Share your experience with us in the comments below.

-- Sara Gould

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Foundations of social jucstie. do they have an inkling of who is enrolled? Lord, please tell me you did not put my name down as the person to call on your emergency card! I AM GLAD YOU ARE BACK WRITING!!

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About Transparency Talk

  • Transparency Talk, the Glasspockets blog, is a platform for candid and constructive conversation about foundation transparency and accountability. In this space, Foundation Center highlights strategies, findings, and best practices on the web and in foundations–illuminating the importance of having "glass pockets."

    The views expressed in this blog do not necessarily reflect the views of the Foundation Center.

    Questions and comments may be
    directed to:

    Janet Camarena
    Director, Transparency Initiatives
    Foundation Center

    If you are interested in being a
    guest contributor, contact:
    glasspockets@foundationcenter.org

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