The Foundation Center reports that nationwide grantmaking by communities foundations is up 6.7% even in these tough economic times. At Coastal Community Foundation, we are up 13% over last year. While all foundations; private, corporate, and community have experienced losses in market value, community foundations alone are showing a burst of grantmaking activity.
The New York Times provides more detail, showing that for all grantmaking foundations total assets have declined and therefore future distributions are likely to drop for many foundations. However, giving through community foundations remains strong. Why the difference? Of the three types of foundations only community foundations are community-based. Private family foundations are created by wealthy families and are not open to future expansion by the general public. If the family or its profit-making holdings do well then new funds are added. Of course this is not likely during a recession. Likewise, giving by corporate foundations tends to increase when profits from the founding company increase and new funds are added from corporate profits. So for both private and corporate foundations increases in money passing through the foundation and out into the larger community are unlikely in these difficult times.
The difference is that community foundations are public charities and the community continues to add funds to community foundations even during a recession. Those funds then become available for distribution and act to stablize the nonprofit sector. While counter-intuitive, this community-based giving was enhanced during the decline in the financial markets. Coastal Community Foundation saw an increase in the creation of new, large grantmaking funds during the market downturn. As the markets fell donors transferred funds to Coastal Community Foundation to lock in the value of their assets for tax purposes. We started to see the signals of the market downturn before the worst came. The “smart money” was locking in the highest tax deductions possible before the declining value of their holdings reduced tax benefits.
And now we all benefit. The word “community” in “community foundation” means that everyone can participate, all of us can benefit. The community that gives us a sense to shared responsibility is the same community that provides support to charities during this recession. Giving to and through Coastal Community Foundation will exceed last year’s total. Ponder that thought for a moment. The community behind Coastal Community Foundation, and all community foundations for that matter, is what gives us strength during times like these.
