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One-Time Change or Here to Stay? New Roles for Foundations as They Adapt to New Economic Reality

March 25, 2010

(Chris Cardona is Consultant in the Philanthropy practice at TCC Group, a 31-year-old consulting firm that helps foundations, corporate giving programs, and nonprofits develop strategies to achieve social impact. This is his first post for PhilanTopic.)

Dollasign_recession "Not business as usual, but not business as unusual, either...."

It's always good when a panel that frames a question in its title actually provides a concise answer to that question. And it's even better when the answer provokes additional interesting questions. Such was the case this past Monday at the Foundation Center, when TCC Group and Philanthropy New York co-sponsored, along with the host, a panel discussion entitled "Fundamental Change or More of the Same: How Will the Economic Crisis Alter the Way Foundations Do Business? (And What You Can Do About It)."

It's also good when a "panel discussion" is heavy on the latter and light on the former. After presentations from Steven Lawrence of the Foundation Center and Paul Connolly of TCC Group about quantitative and qualitative trends in funder response to the new economic reality, Brad Smith, president of the Foundation Center, moderated a lively discussion among three CEOs of foundations of very different types and sizes: Paul Grogan of the Boston Foundation, Stephen Heintz of the Rockefeller Brothers Fund, and Maria Mottola of the New York Foundation. It’s worth highlighting a couple of overall trends that surfaced in that conversation. (And check out TCC Group’s Twitter feed for more choice nuggets from the discussion.)

As the quote above suggests, foundations are neither sticking to their guns nor embracing completely different approaches as they adapt to the new economic reality. Based on their knowledge of the communities they fund, they’re experimenting with new and different roles. For some funders, providing "coping mechanisms" for grantees is the order of the day. For others, it's partnering with technical assistance providers to ensure that grantees are not accidentally being inundated with technical-assistance resources and that TA offerings are non-redundant and coordinated. Still others are partnering with the public sector more openly and explicitly. Often, these partnerships involve some back and forth; it’s difficult to partner with government and not be concerned by instances of corruption and lack of transparency. Indeed, some foundations are working in new and creative ways to promote greater accountability and transparency within the public sector. Given the significant expansion of government involvement in health care occasioned by this week's passage of the health reform bill, such a role seems timely and appropriate.

It remains to be seen whether these and other responses are adopted permanently or will be tied to the duration of the downturn. For place-based funders, a new emphasis on community leadership seems to be something that fits comfortably with their mission. For everyone else, the implications for nonprofits looking to partner with funders experimenting with new roles are worth considering.

What kinds of things do you see funders doing in response to the new economic reality? Are they doing enough? Not enough? And do you have a favorite example (or two) you can share? Use the comments section below

-- Chris Cardona

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