More Foundations Respond to Crisis: Bush, Gund, Cleveland Foundations

The Cleveland Foundation, the oldest community foundation in the nation, has released the following statement in response to the economic crisis:

With the current economic crisis, we have seen an increased demand at agencies that address basic human needs such as food, shelter, and medical services. We remain committed to helping those agencies that improve people's daily lives. We also remain committed to long-term, overarching initiatives that have the potential to restructure our city, giving us new jobs, high-quality schools, and livable neighborhoods, among other benefits.

We have taken several steps to ensure our grantmaking dollars have the greatest impact. To have the resources to respond appropriately to our community's immediate needs, our board has deferred our major capital grants program, which usually runs in the spring. They will reconsider in June whether to run this program in 2009....

The George Gund Foundation, another pillar of the philanthropic community in Northeast Ohio, released its own statement yesterday:

The stock market collapse has affected almost everyone, including The George Gund Foundation. The Foundation has lost almost one-third of its value, necessitating changes in our approach. 

We believe it is essential that our grantees understand how we are planning to adjust to the constraints on our resources and what this may mean to them. We have adopted several principles to guide us that we think it is important to share.

First, we have reduced our operating budget. Every dollar we spend on operations is one that we cannot give away, so we have tightened our belts in several ways. For example, this year we will issue an online annual report instead of a printed version. We have cut our travel expenditures and will curtail staff travel to out-of-town meetings and conferences in the coming year.

We intend to increase the percentage of our assets that we give away. Federal tax law requires that we spend 5% of our assets every year, and we always exceed that minimum. But in 2009 we will go substantially beyond that. However, because our portfolio is diminished, the dollars available for grants still will likely decline in 2009. Thus, we do not expect to make any large new commitments. In recent years we have made numerous substantial, multi-year grants to important community projects in Cleveland. We will, of course, honor those commitments but doing so automatically imposes a constraint on our ability to consider new awards of similar magnitude....

And the St. Paul-based Bush Foundation, which we cited as a model of transparency after it announced a new strategic direction and goals last summer, has acknowledged that while the economic crisis has complicated things, it is proceeding as planned:

We made these choices before the current financial typhoon hit. So what now? We are sticking to our goals. We may wish today’s circumstances were different, but it was not immediate circumstances that motivated our focus on these goals. Ours are long-term aspirations. We believe that the best time to start pursuing long-term change is right now.

For 2009 that will mean:

Our budget will be nearly the same as it was in 2008.

• We will honor all our prior commitments; they will make up about 30 percent of our budget.
• We will pay out the transition grants commitments we have made to individual organizations and fields of interest as part of changing our strategy; this will take about another 15 percent of our budget.
• We will commit the balance of our resources to launching the first partnerships as part of our Goals for a Decade.

The work we did in 2008 to decide what difference we want to make has served us well as we face 2009, because among all the right things we could do, we know which ones are right for us. No doubt circumstances will continue to change. While those changing circumstances may alter the means, the ends we intend to achieve will remain the same.

More tomorrow.