U.S. foundations were flexible, targeted, and quick to act in response to the economic crisis, a new report from the Philanthropic Collaborative finds.
Based on sample grants provided by the Foundation Center, the study, Responding in Crisis: An Early Analysis of Foundations' Grantmaking During the Economic Crisis (20 pages, PDF), analyzed 2,672 grants totaling $472 million made by private and community foundations in 2008-09 as well as information about their planned giving in 2010. The analysis found that in 2009, 95 percent of sampled grants for mortgage delinquency and foreclosure prevention were concentrated in states with higher-than-average delinquency rates. Similarly, as unemployment rates rose between 2008 and 2010, foundations allocated more grants to states where joblessness was higher. In 2009, out of a sample of $3.12 million in grants for assistance to the unemployed, $2 million went to high-unemployment states.
A further analysis of factors determining foundations' economic assistance grantmaking — state population, mortgage delinquency rate, unemployment rate, and geographical proximity between grantmaker and grantee — showed that foundations responded strongly, quickly, and effectively to emerging needs as the crisis unfolded.
"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 former Congressional Budget Office director Douglas Holtz-Eakin, who authored the study and now heads the American Action Forum. "During the U.S. economic collapse, we saw grantmaking 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 grantmaking patterns to meet emerging economic needs."