Posted on August 18, 2009

Foundations a Catalyst for Pittsburgh's Economic Recovery

Foundations established by wealthy Pittsburgh families such as the Carnegies, Mellons, and Heinzes have helped bring the city back to something like its former glory following the collapse of the steel industry in the 1980s, the Associated Press reports.

The city's philanthropic legacy was established in the nineteenth century by iron and steel baron Andrew Carnegie, who vowed to give away his millions before dying. The philanthropic institutions endowed by Carnegie and his contemporaries, including oilman Michael Benedum and ketchup baron H.J. Heinz, provided significant support to nonprofits and charitable causes in the region through much of the twentieth century. It wasn't enough to prevent the slow collapse of the steel industry, however — an economic disaster that, by the 1980s, had cost the city more than a hundred thousand jobs and pushed the region's unemployment rate to 18 percent.

To address the region's economic woes, Teresa Heinz, chairwoman of the Heinz Endowments and Heinz Family Philanthropies, convened a 1991 summit of regional grantmakers that included Heinz and the Pittsburgh and Grable foundations. In the years that followed the conference, those and other regionally based funders worked together to promote education reform, job creation in the healthcare and higher education sectors, and investments in green technologies — a strategy that helped Pittsburgh recover from the loss of its major industry faster than other Rust Belt cities such as Detroit, Cleveland, and Youngstown.

Today, the Pittsburgh region supports more jobs than it did at the peak of steel-industry employment in 1979. And at 7.7 percent, the region's poverty rate also is nearly 2 percentage points lower than the national average and well below the 9.5 percent rate in 1990. At the same time, construction is booming and the decades-long decline in the city's population appears to have bottomed. Indeed, President Barack Obama recognized the role of local foundations in the region's turnaround when he chose Pittsburgh to host the Group of 20 economic summit in September.

For all the praise he and his colleagues at other philanthropies have received, however, Heinz Endowments president Bobby Vagt says the city's rebound is very much a community-wide effort. "We're not ones that effect the change," he said. "The community itself effects the change. We provide the wherewithal."