Inside Philanthropy

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

July 13, 2009

Recession creating ‘new normal’ for giving

By Todd Cohen

The economic crisis is spurring new thinking in the giving sector, with givers and giving organizations looking for innovative ways to increase the impact of their giving.

That is the view at The Philanthropic Initiative, a 20-year-old nonprofit consulting firm based in Boston that has provided strategic philanthropic advice to 200 to 300 individuals and organizations, and facilitated over $1 billion in giving.

With 30 percent of philanthropic wealth “sucked out of the system” because of the recession and failure of the capital markets, individual givers, foundations and corporations are taking a hard look at the way they give and the causes they support, says Ellen Remmer, an 17-year TPI veteran who was named its president a year-and-a-half ago.

The recession has triggered self-scrutiny in the giving sector about the nature of philanthropic leadership and the role of strategic collaboration and partnerships, she says, and has created greater willingness to move beyond financial contributions.

“That imperative is incredible now with fewer resources,” Remmer says.

Jim Coutre, vice president at TPI, says corporations, in particular, are looking for ways to “embed” giving into their organizational culture, increase the involvement of their employees in their communities, and step up their giving in other countries in which they do business.

Remmer says the recession also has prompted givers and giving organizations to pay more attention to the operating needs of nonprofits.

“They’re being forced to look very deeply into how nonprofits are achieving the mission or not,” she says.

Foundation trustees, for example, traditionally “haven’t been that smart about understanding balance sheets and the finances of nonprofits,” she says.

But now, she says, “they really need to understand that,” as well as nonprofits’ need for working capital, and to be “thinking practically about how to sustain the mission.”

The recession, which is creating a “new normal” for the giving sector, represents a rare opportunity for nonprofits to develop new ways to work together “to accomplish the mission, as opposed to institutional survival or preservation,” Remmer says.
Nonprofits are “starting to suspend their egos,” she says. “And the donors are listening.”

Donors are being “more flexible and more willing to give operating support,” she says. “They’re really trying to understand nonprofits better, and become more attuned to the challenges for nonprofits. The best of the best funders are giving more for strategic planning and to do reflection and encourage those kinds of collaboration.”

And with government evolving to cope with the economic crisis, she says, givers and giving organizations are talking more with government about how to work together, and government is more open because of the decline in its resources.

“We’re poised for some interesting changes in the field,” Remmer says.


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