The current global economic crisis has been the subject of Kresge Foundation positions and observations in recent weeks.
Private philanthropy is uniquely suited to help communities weather the economic crisis and position themselves for future growth once prosperity returns, said Rip Rapson, foundation president is recent speeches before groups of non-profit executives.
Rapson advocated for the following in “Philanthropy’s Opportunities and Responsibilities in Times of Civic Redirection:
- Helping communities “chart a course for concerted, mutually reinforcing effort. Philanthropy,” he said, “can create neutral and safe space for the tough give-and-take that is required to agree on a strategic, over-arching community direction.”
- Providing communities with social venture capital and aggregate other financial resources to fund essential activities so that when the economic recovery begins communities will be positioned to take full advantage of new growth opportunities.
- Assisting in the restructuring of a community’s nonprofit ecosystem for optimal delivery of services during the economic crisis and long-term sustainability in the future.
Nonprofits serve as our society’s moral thermostats,” Rapson said. “Organizations that activate in the presence of suffering or hardship. If there was ever a time that these organizations were needed, it is now.”
Rapson spoke to an audience of business leaders in Columbus, Ohio, to representatives of Detroit-area nonprofit organizations gathered for a seminar titled “Best Practices from the Best Managed Nonprofits.” Each speech was tailored to the respective audience.
The nonprofit landscape of yesterday or today will not be the nonprofit landscape of tomorrow. Undercapitalization, chronically a problem, will become a death spiral. When revenues decline by 10 or even 20 percent, a nonprofit can put itself on a diet of discipline and flexibility and emerge at the other end with its mission pretty much intact.
When demand skyrockets and revenues decline by 40 or 50 percent, however, you’re a different organization altogether.2
Generous benefactors will almost certainly rise to the occasion and try to stabilize their organizations of choice. But they can’t begin to provide enough support to offset diminished public and philanthropic dollars.3 And their generosity will flow selectively, leaving outside the rescue pipeline vast numbers of organizations that are largely invisible to most of those donors – particularly organizations that have traditionally been heavily subsidized by government.