Overheard
Guiding Principles in Turbulent Times
Inspired by this challenge of our time, Dr. Bob Ross, president and CEO of The California Endowment, submitted the following “Board-CEO Principles for Managing through the Crisis:”
- Re-affirm and stick to our values.
- Balance “responsiveness” (to communities in need) with “responsibility” (to prudently steward the assets).
- Guard against reacting to panic with panic. Take the long view, and wherever possible, make time our friend rather than our enemy.
- Philanthropy is recognized as a voice and advocate for the underserved; let’s remain cognizant of how our actions may influence the behavior of others in our field.
- In the months ahead we will face some tough decisions. It’s a good time to re-affirm the treatment of community, grantee, and staff with dignity, respect, compassion, and transparency.
- Recognize that the severity and depth of the economic crisis represents an entirely new and unanticipated set of realities for us, and we must be willing to re-examine old assumptions, suggest and weigh new ideas, and welcome out-of-the-box thinking.
- Keep in mind: the Chinese translation for crisis includes the notion of opportunity.
Alternative Means of Support
“Several years ago we started providing lines of credits to nonprofits at a cheaper interest rate than banks but higher than our T-bill investments. It was a win-win for everyone. We were able to save them [the nonprofits] thousands of dollars in interest, which was as good as writing the check.
“In the last month, we have initiated two new lines of credits because the nonprofits’ banks fell on hard times and were no longer providing access to funds. We may see this as a short-term problem in the nonprofit space as banks consolidate and the credit crisis continues. Without access to short-term money, some nonprofits will have difficulty maintaining inventory or managing their capital campaign…any foundations that express interest in this concept, I’m glad to share the line of credit template we are using.”
- Tony Wells, President, Tony R. Wells Foundation
In an email to Kathleen Enright, president and CEO of Grantmakers for Effective
Organizations, in response to her memo to GEO’s membership on the economy.
Harsh Reality: The Economy and Grantmaking Budgets
“As we involve the next generation in the foundation, we are all in agreement that we need to cut back on our payout rate (upwards of 8 percent). In this economic environment that will mean a cut in grants. Everyone is resigned to this, but obviously not happy about it.”
- Wendy Jaffe, Executive Director, Trio Foundation of St. Louis
A Relationship Based on Trust
“The fiduciary standard is simple: process trumps performance. A fiduciary manages the foundation’s money in an ethical manner, so the important thing to do is demonstrate that you are a good steward of the foundation’s assets and act in a prudent manner at all times. Always pay attention to details because good things happen by design. Regardless of the economic climate—but especially now—donors want to know that you are responsibly managing their money.”
- Blaine Aikin, president and CEO, fi360
Fi360 provides training, tools, and resources to promote a culture of fiduciary responsibility
and improve the decision making processes of investment fiduciaries.
Adapting to the Times
“Initially, conversations with regard to changes to the California Community Foundation’s grant giving were being held with the programs committee of the board. For its upcoming meeting in mid-November, grantmaking staff recommended two changes: (1) expediting the renewal of several recurring grants from March 2009 to December 2008 and (2) providing a three-month no-cost extension for grantees who would likely encounter difficulty in meeting the objectives and outcomes of their awards. Subsequently, these recommendations would be acted on by the full board in early December.
“Typically, the CCF board has three grantmaking cycles per year: March, June, and October. However, the board has expressed great interest in helping to accelerate CCF’s response to the impact of the economic crisis on the local nonprofit sector by reviewing off-cycle grant recommendations during this time.”
- Alvertha Penny, Vice President of Programs, California Community Foundation
Keeping the Faith
“The MacArthur Foundation’s endowment has declined this year, yet we remain committed to being a long-term, steady partner to organizations we support. We chose to maintain our grant-making levels in past recessions, and we intend to do so again now… MacArthur has increased our annual operating support for arts and culture groups in Chicago. And our $68 million foreclosure initiative responds to local needs resulting from the economic crisis, which threatens to disrupt hard-won progress in some of the city’s most challenging neighborhoods.”
- Jonathan F. Fanton, President, John D. and Catherine T. MacArthur Foundation
In a letter to the editor, (“In Tough Times, Foundations Must Keep Giving”)
published November 17, 2008, in the New York Times.
What are you doing? What questions do you have about proceeding in this economic climate? Post your comment below.
