The View from Here
Staying the Course in Hard Times
By: Karl Stauber
When the storm winds blow hard, it is easy for institutions to reconsider their direction and strategy. And, in almost 35 years in philanthropy, I’ve seen the winds blow hard a few times.
When I entered the field in the 1970s, it was common to wait in line for two hours to fill-up gas, home mortgages were at 17 percent interest rate, and, soon thereafter, we learned what “stagflation” was all about.
How long the current downturn will last and how bad it will be, no one knows. So should we change our direction and strategy? Well, that depends how you saw the work before the current crisis.
There is a continuum in our work with charity at one end and philanthropy at the other. Both are important; they are related, but different.
Charity is older and based in many religious traditions that assume the poor will always be with us and we are responsible for reducing their suffering.
Philanthropy is a modern concept that assumes that we should strive for social equality and our resources should be used to eliminate the causes of poverty. (I have chosen poverty as the core concept but one could legitimately choose concepts like ignorance, ill health, etc.).
Charity is largely focused “downstream” and philanthropy “upstream.”
Crises, like our current one, often promote a charitable response. Ideally, these responses should be the responsibility of individuals and governments. But, as we learned from the Gulf Coast hurricanes of 2005, sometimes others have to step in.
But, crises also create great opportunities.
For example, for years the New Orleans schools have slowly spiraled downward. Hurricane Katrina, however, produced an opportunity for New Orleans to recreate its schools. Local foundations played a critical leadership role in this transformative effort. It is too soon to tell if this will succeed, but without courageous local leaders, including foundations, we know from the previous decades, little would improve.
So the recession of 2008 (and beyond) is both a crisis and an opportunity.
Foundations, with their endowments and access to wealthy individuals and corporations, are blessed to have the depth to turn the current crisis into opportunities. But these organizations must have the courage and will to balance the short-term charity needs with the long-term philanthropic opportunities.
Many communities, like the region of Danville, Virginia, have been in economic decline for decades. In the last 20 years, this region has lost over 10,000 jobs and many talented people have left for opportunities elsewhere. The region has seen an increase in the percentage of the population under 18 and over 65, and in the last five years, childhood poverty has risen 35 percent. Somewhere between a quarter and a third of America has been in an economic crisis for at least a decade. But, there is no crisis until it hits places like Wall Street and California.
The Danville Regional Foundation is committed to the economic and cultural transformation of the area it serves. This requires staying at the “philanthropic” end of the continuum, even as needy people suffer.
Our “theory of philanthropy/theory of change” is simple and difficult: change the conversation, immediately change who is in the conversation, then change the behavior, and then change the outcomes. To do this successfully, you have to have a strategy and vision, resources, and courage. The closer you are to the ground, the harder the courage, especially in these difficult times.
Karl Stauber is the president and CEO of the Danville Regional Foundation, based in Danville, Virginia.
Grantmaking with Intention
By: Emmett D. Carson
Under normal circumstances, a foundation’s vision and mission should not be subject to change. The benefit of an endowment is to enable a foundation to pursue its mission regardless of the economic climate or prevailing attitudes. Nevertheless, the strategies and tactics for achieving a foundation’s mission should undergo frequent review based on changing circumstances, evaluation of results, and best practices.
The unprecedented nature of the current economic crisis certainly qualifies as changing circumstances. It should compel every foundation to examine its current strategies, and in rare cases, lead some foundations to reconsider their missions.
Each foundation has an obligation to consider whether, and how, to respond to this crisis.
Community foundations have at least three advantages in responding quickly to unforeseen challenges such as the worsening recession. They:
- have access to real time information from grantees, donors, trustees, and the public about changing circumstances
- can engage donors and others to support unexpected emergencies
- can use their convening and public voice to bring attention to issues and help develop solutions
Silicon Valley Community Foundation used all of these tools in developing its grantmaking strategies, after our establishment in January 2007 through the merger of Peninsula Community Foundation and Community Foundation Silicon Valley. Our mission is to create positive social change to address the region’s most pressing problems while inspiring greater civic participation in San Mateo and Santa Clara counties.
To identify the most pressing problems, we reviewed local data and the many existing assessments of the region’s needs. We then identified nine issues to examine more deeply: housing and basic needs, arts and culture, child and youth development, civic engagement, community economic development, education, environment, health, and immigration.
We then held community conversations in which hundreds of nonprofit, government officials, academics, grantees, donors and funders offered ideas on both new and existing approaches. For each convening, we developed an issue brief describing key facts and trends. We also conducted an online survey to solicit additional input.
Based on this feedback, our board of directors selected five grantmaking areas: immigrant integration, closing the middle school achievement gap in math, regional planning, financial literacy and asset building, and safety-net issues.
Our focus on economic security encompasses: foreclosure counseling, financial literacy and asset building, and efforts to curtail predatory lending practices. The safety-net strategies include direct support for nonprofit agencies affected by the economic downturn.
We committed $1 million and, when the crisis deepened, announced that we would provide an additional $1 million as a challenge grant. We also are planning a summit of nonprofit leaders to discuss the public policy implications of the economic crisis.
Our ability to select these areas came directly from what we heard in the community. Like the proverbial canaries in the coal mine, participants in our process told us from multiple perspectives that the economy was getting progressively worse. Of course, no one predicted the depth of the crisis we now face; however, many were uniform in their belief that strengthening the social-safety net was critical.
All we needed to do was listen.
Emmet D. Carson is president and CEO of Silicon Valley Community Foundation, based in Mountain View, CA.