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Many endowed private foundations are wrestling right now with the question of whether to increase their grant spending from what they originally budgeted, even as their endowment values have shrunk, or whether to prioritize maintaining the future purchasing power of their endowments for the inevitable needs and crises of the future. They’re worrying about the incredible needs they see and the viability of their grantees, but they’re also worrying about the consequences of essentially locking in losses by upping their grant spending.
These are not easy choices.
Along with eight other leaders of philanthropy-serving organizations, I have argued that foundations should consider stepping up their grant spending. “Unprecedented challenges require unprecedented responses — and a casting aside of traditional norms and approaches,” we write in this statement released last Thursday.
There are many arguments to be made about whether to spend out more (as Libra Foundation and Mary Reynolds Babcock Foundation have announced they will) — and if so, how much more — or whether to stay the course of pre-established budgets. Many philanthropic leaders I respect greatly, and with whom CEP works closely, see it differently than I do — and have told me of the long-term costs of increasing their spending.
But what’s most expensive, ultimately? That’s a question some nonprofit leaders working with the most vulnerable are asking. “It will take more money to re-start if we’re not here,” Chitra Hanstad, executive director of World Relief Seattle, told me over the phone Friday. “Think about how much cheaper it is to retain good staff than it is to bring on new ones. It’s the same for organizations.”
Read the full article about supporting organizations by Phil Buchanan at The Center for Effective Philanthropy.