Overlooking the Underserved

By National Committee for Responsive Philanthropy, Special for  USDR

Less than a third of the $16.6 billion the country’s large foundations give out annually, on average, went toward helping America’s underserved during and after the Great  Recession.

“Many people assume that charitable foundations prioritize the needs of the poor, the disabled and other marginalized groups. But they don’t,” said Aaron Dorfman, president and CEO of the National Committee for Responsive Philanthropy (NCRP). “Foundations have the means and the tools to do more to invest in communities in need. They need to step up  now.”

High demand, few  resources?

Pennies for Progress: A decade of boom for philanthropy, a bust for social justice” by NCRP found that U.S. foundations weathered the economic storm better than  most.

Prior to the recession, the country’s foundations were worth more than $682 million. Although that value slipped by as much as 17 percent when the stock market plunged, assets steadily increased beginning in 2009. By 2013, it reached $798  billion.

Meanwhile, many nonprofits saw higher demand from those who lost jobs, homes and what little savings they  had.

Yet only 1 in 10 of the largest foundations dedicated 50 percent or more of their grants dollars for the direct benefit of the poor, people of color, women and girls, immigrants or other groups hit hardest by the  recession.

Many who felt the weight of the recession were already struggling with unemployment, below-living wages, lack of quality education and other chronic social problems. But total grants for efforts that engage these communities in finding long-term solutions to injustice and inequities remained stagnant at 10  percent.

A lack of commitment to people in  need

The report also found that the country’s largest foundations increased their giving for underserved groups by only 15 percent between 2003 and  2013.

When foundations did give, less than 25 percent were in the form of general support grants. Yet, these grants are important for the long-term growth and health of  nonprofits.

Mixed results for community  foundations

NCRP compared how different types of foundations gave in ways that benefitted the  underserved.

Community Foundations Giving Trends

Year

% of Grants for
Underserved

% of Grants for
Underserved Coming
from Community
Foundations

2003

33

9

2013

26

15

NCRP found that community foundations were less likely to support these
groups compared to family, private and corporate foundations.

Community foundations accounted for 9 percent of total foundation grants to marginalized communities in 2003. This amount jumped to 15 percent in 2013. However, the share of total giving from community foundations for underserved populations fell from 33 percent to 26 percent during the  period.

“Community foundations are supposed to be in tune with the needs – and potential – of the communities they serve,” said Ryan Schlegel, NCRP senior associate for research and author of “Pennies for Progress.” “Their numbers show an opportunity to better respond to their marginalized  neighbors.”

A call for philanthropy that maximizes  impact

NCRP urges foundations to respond boldly to society’s  challenges:

  • Increase grantmaking that benefits vulnerable populations such as the poor, people of color and LGBTQI.
  • Support efforts that empower and engage communities in finding long-term solutions to issues such as economic opportunity, women’s equality and structural racism.
  • Give more unrestricted, multi-year grants that nonprofits need to be effective.

Pennies for Progress: A decade of philanthropic boom, a bust for social justice” includes a list of the top foundations that gave most to marginalized communities and funded social justice programs. The full report is available online at  www.ncrp.org.

Since 1976, NCRP has served as the voice of nonprofits and the communities they serve in philanthropy. Through research and advocacy, NCRP works to ensure that philanthropy contributes in meaningful ways to the creation of a fair, just and equitable world. Visit www.ncrp.org for more  information.

SOURCE National Committee for Responsive  Philanthropy

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