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Editorial: In tough economy, nonprofits refocus

Several local charities focus on more targeted giving.

Last update: July 23, 2009 - 10:48 AM

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MINNESOTA GIVING

• About 52 percent of Minnesota grant makers said they expect to decrease grants in 2009, compared with 62 percent of charities nationwide.

• Thirty -one percent of foundations say they will give at the same levels in 2009 as in 2008; 17 percent will increase giving.

• In reaction to the economic downturn, grant makers say they are most likely to provide support for food, housing and jobs.

Source: March 2009 survey of 59 Minnesota grant makers conducted by the Minnesota Council on Foundations and the National Council on Foundations. For more information go to mcf.org.

At least three more local foundations will join other area nonprofits in shifting strategic direction, and many of their changes wisely involve efforts aimed at improving education and addressing poverty.

The new focus is welcome, especially with the backdrop of a deep recession and the long-term needs of area communities and the state economy.

The McKnight Foundation recently announced plans to focus on increasing literacy among Twin Cities students by the end of third grade. To help fund the effort, support for programs involving fatherhood development, parenting skills and family economic success will be phased out.

The Grotto Foundation has recently shifted its giving to support early education preschool efforts. In both cases, the nonprofits are reacting to research that shows children with strong educational foundations are more likely to do well in school and become successful adults.

In addition to the moves by McKnight and Grotto, the Minneapolis Foundation recently approved a strategic goal to "promote social, economic and racial equity'' in areas where it can have the greatest impact. The nonprofit is narrowing the geographic scope of grant-making to activities that demonstrate results for Minneapolis residents. It is also temporarily suspending capital grant-making and multiyear grants due to the economy.

Just last year, both the Bush Foundation and the United Way took action to narrow their strategic focus and provide more dollars in fewer geographic areas.

The trend is partly the result of the natural churn that occurs at nonprofits when leadership or boards change. Several have hired new directors in the past two years, prompting them to reassess direction. It's also common for foundations to reevaluate their giving every few years to respond to emerging needs and assess community impact. Several foundations have hired consulting firms for strategic planning help. "There is some angst about not making progress and more desire for certainty among funders,'' said Jon Pratt, executive director of the Minnesota Council of Nonprofits.

And like the rest of us, nonprofits have been affected by the struggling economy and stock market, making it even more necessary for them to review priorities. To become more accountable to donors and the goals set by their founders, they are becoming more driven to fund efforts that produce tangible, measurable outcomes.

That's not to say that previously funded programs were without value. As good pilot programs should, many helped plant the seeds for strong community-building efforts that became self-sustaining or picked up support from government or private concerns.

Minnesota foundations spend more than $1 billion annually on good causes throughout the state. In times of more limited resources, it's sensible that they would be even more concerned with producing the greatest return on that investment. If they do, the entire state will benefit.

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