America's biggest charitable foundations are stepping up their giving to help the homeless and the hungry during the recession, according to a group that studies institutional giving.
As of mid-January, 50 of the nation's largest foundations had committed more than $100 million in grants aimed at reducing foreclosures, keeping food bank shelves stocked and providing services to the homeless and financial counseling for others.
The donations announced so far are just the beginning, said Steven Lawrence, the Foundation Center's senior director of research and author of a report on emergency giving in response to the economic downturn.
And they are also just one aspect of the way foundations are responding to the economic downturn, Lawrence said.
Foundations have seen their assets drop dramatically during the past year, just like everyone else, but many are committing to keeping their giving steady.
The nation's largest foundation, the Bill & Melinda Gates Foundation, announced this week it would increase its giving from 5 percent to 7 percent of its assets in 2009, despite a 20 percent drop in the value of its assets.
"The vast majority of foundations are trying to hold their giving level," Lawrence said.
That means many foundations are increasing their giving beyond the 5 percent of assets required by the Internal Revenue Service, to keep their promises to the causes they support.
Lawrence said he was not sure what will happen next year if the stock market does not recover: "2010 may be really challenging."
Making adjustments
The last economic downturn — the dot-com bust earlier this decade — hit large foundations more dramatically because it followed years of tremendous asset growth and big long-term financial commitments that were hard to meet, Lawrence said.
"My armchair expectation is that while this crisis may be more severe, foundations made adjustments in their practices to be better able to respond," he said, adding that the last economic downturn wasn't that long ago and foundations have since become more conservative in their giving and their investments.
The Foundation Center found that for the most part, the big foundations are keeping their emergency economic downturn giving local.
The John D. and Catherine T. MacArthur Foundation has announced three gifts in its hometown of Chicago totaling $34 million to help homeowners avoid foreclosure and renters keep roofs over their heads.
Jonathan F. Fanton, president of the MacArthur Foundation, reported last week that the organization's assets had lost 20 percent of their value in 2008, while the foundation gave away $25 million more than in 2007. He said the foundation plans to give at the same level in 2009, while keeping in touch with the groups it supports to see what additional help they may need.
The Ford Foundation is giving more than $15 million to organizations in Michigan, for foreclosure prevention, feeding the hungry, urban revitalization and social justice.
Lawrence said he was intrigued by the number of gifts to organizations that help people facing foreclosure stay in their homes, which is not a typical area of foundation giving.
He said another unusual finding in his report concerns three large gifts to pay for research into the cause of the economic downturn.
"That's some forward thinking, from my perspective," Lawrence said.