Pittsburgh Foundations Expanded Role to Respond to Economic Challenges

Philanthropic leaders in the Pittsburgh area believe that private foundations helped save the local economy from collapse in the 1980s by playing an active a role in economic development and neighborhood revitalization, the Pittsburgh Post-Gazette reports.

The private foundations' commitments were especially important, said Kate Dewey, a local nonprofit consultant who will become president of the Forbes Funds on January 1, because they filled the gap left by several major corporate funders, including Allegheny International, Rockwell International, and Gulf Oil, that either downsized, disappeared through mergers, or left the city as the country's manufacturing sector collapsed. Dewey credited the Heinz Endowments and the Richard King Mellon, McCune, Hillman, Buhl, and Pittsburgh foundations with playing a leading role in helping the city "re-engineer our identity." Among the critical investments they made, she added, were neighborhood rejuvenation projects and healthcare initiatives.

According to Pittsburgh Foundation president and CEO Grant Oliphant, many foundations had been reactive rather than proactive about civic issues in the decades after Wordl War II. But the economic decline of Rust Belt cities like Pittsburgh in the 1970s and 1980s forced many foundation to collaborate and develop strategies and a philosophy for leveraging their dollars. Among the most important investments they made, Oliphant told the Post-Gazette, was the redevelopment of what is now a thriving Cultural District in downtown Pittsburgh featuring performing arts centers, art galleries, and restaurants.

"Foundations have increasingly migrated [from] quality of life and culture and arts and things that make for an attractive community [to] economic development and improving the product itself through workforce development, education, and figuring out how government can work better," said Rick Stafford, professor of public policy at Carnegie Mellon University's H. John Heinz III College. From 1991 to 2003, Stafford served as CEO of the Allegheny Conference on Community Development — a period when foundations "really responded to the big downturn of the '80s" by investing in community development projects and new business initiatives, said Stafford.

Indeed, the lessons of the '80s led the Heinz Endowments to gradually expand its role in the community, and after the national economy slumped following the collapse of Lehman Brothers in September 2008, it and other local foundations were quick to respond, said Heinz Endowments president Robert Vagt. For its part, the endowments increased its support of the Greater Pittsburgh Community Food Bank and has worked to help nonprofits and social service agencies whose programs are threatened by government budget cuts. Similarly, the Pittsburgh Foundation teamed with the United Way of Allegheny County, philanthropist Elsie Hillman, other foundations, and the Allegheny County Department of Human Services to create a temporary assistance fund. "[T]he role of philanthropy is being changed," said Vagt. "Many things we were funding alongside government, and now government has pulled the lion's share....So we talk about how the landscape changes and what's going to exist on the other side."