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Perspectives

Message from Joanna Jackson, VP, Grant Operations
Are Nonprofits Prepared for a Possible Recession?

A reporter from The Chronicle of Philanthropy recently reached out to the Weingart Foundation asking how prepared nonprofits might be for a financial downturn. I had been wondering the same thing, given the painful memories from the last major financial crisis a decade ago and predictions of another downturn in the next 12 to 18 months looming.

A review of the data we collect from our grantees confirms that the majority of nonprofits we fund use our dollars to invest in organizational capacity needs, and more specifically, to build infrastructure tied to their long-term viability. Fund development, staff and infrastructure, and organizational development and adaptability were the most frequently cited goal areas among our grantees in FY 2017. In addition, we have helped nearly 50 organizations establish board designated operating reserves since 2012. Many of these organizations tell us that they learned the value of having a reserve fund during the dark days of the financial crisis.

In fact, it was the Great Recession of 2008 that helped propel the Weingart Foundation’s shift to Unrestricted Operating Support. Unrestricted funding—with the express intent to strengthen organizational effectiveness—remains the core of our grantmaking today. Given how nonprofits use our unrestricted dollars, I want to believe they are better positioned to weather a significant downturn than was the case when the previous financial crisis hit.

At the same time, our program officers share that many nonprofits are currently planning for continued, and in some cases, rapid programmatic growth in order to meet the tremendous needs our communities are facing. Based on the Foundation’s perspective and experience, I sincerely hope organizations engaged in such growth plans are also considering the importance of scenario planning for the economic downturns that inevitably come. I have asked our program officers to engage nonprofits about this in their upcoming site visits.

These articles from The Chronicle of Philanthropy provide additional information and resources. Let us know what you think. We value your feedback, and know we cannot achieve our collective vision of a more just and equitable Southern California without strong nonprofit partners to lead the way.