Posted on November 17, 2011

Social Justice Philanthropy Disproportionately Affected by Recession, Report Finds

Social justice grantmakers have been disproportionately affected by the global financial crisis and remain vulnerable to future economic shocks, a new report from the Foundation Center finds.

According to Diminishing Dollars: The Impact of the 2008 Financial Crisis on the Field of Social Justice Philanthropy (35 pages, PDF), unless the field sees five years of above-average investment returns, social justice grantmaking will remain below 2008 levels through at least 2015. The report also found that foundations with less than $50 million in assets are struggling the most to recover from the economic downturn, that social justice nonprofits are having difficulty finding new funders, and that some foundations are unintentionally depleting their assets at a very slow rate, which may lead to reduced grantmaking for social justice issues in the future.

The report examines historical trends in foundation assets, spending, and giving levels; describes strategies used by foundations to cope with depleted assets immediately following the crisis; and presents projections through 2015 for asset and grantmaking levels. According to the report, the giving of fifty-four sampled foundations ($763.1 million) represents approximately one-quarter of all documented social justice giving in 2009 ($3.1 billion).

"The ripple effect from the damage to these foundations' endowments has the potential to be significant and lasting for the social justice arena," said Sara K. Gould, the report's author and a senior fellow at the Foundation Center. "These are key players in the field of social justice philanthropy, often serving a unique and critical role in local communities with grassroots efforts and an on-the-ground presence. Yet, they are also some of the most vulnerable."