Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

March 16, 2009

Foundations can be better advocates

By Todd Cohen

With the U.S. in economic crisis, the stakes for the giving sector and its constituents are greater than ever.

Nonprofits are scrambling to secure the resources they need to cope with soaring demand for services that will address escalating social problems while also keeping their doors open and their lights on.

A small but growing number of foundations are digging deeper to support nonprofits’ need for operating funds.

An increase in operating grants from foundations is long overdue, as is an increase, from 5 percent, in the share of their assets that foundations are required to “pay out” each year for grants and overhead.

But foundations also should be doing a lot more to help shape public policies that affect the giving sector and the causes of social problems it exists to address.

Foundations can raise their voice on policy issues, do more to spur a more inclusive conversation to address issues, invest more in policy and advocacy work by nonprofits, and use their role as shareholders to help shape the business practices of companies in which they invest.

As the Los Angeles Times reported recently, a group of California foundations and think-tanks, moving beyond the funding of studies and pilot projects that have failed to generate broad improvements in medicine, have turn to social activism to push state and federal lawmakers to make the health-care system better.

And in New Mexico, according to a study by the National Committee for Responsive Philanthropy, foundations and other groups invested more than $2.6 million over five years to help 14 nonprofits in the state with their advocacy, community-organizing and civic-engagement work, generating $16.6 million in benefits for residents.

The National Committee plans to study and promote advocacy grantmaking in up to 10 states, starting with North Carolina.

Too many foundations for too long have not been willing to use their money, their connections and their voice to help shape policies that affect them, the nonprofits they support and the people those nonprofits serve.

With the U.S. economy is crisis, the problems that foundations and nonprofits exist to address only will get worse.

Now more than ever, foundations need to invest more time and resources in policy work.

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