Charitable Giving Down in 2009
In 2009, charitable giving in the United States fell for the second year in a row, to $303.75 billion. According to the newly released Giving USA 2010, the drop represents an inflation-adjusted decline of 3.2 percent from the year before—a steeper decline than the 2.4 percent drop reported in 2008. Individual giving remained roughly even with the previous year, and corporate giving rose to nearly pre-recession levels. Among categories of charity, giving to human services, health organizations, and international development rose; gifts to arts organizations, education, and charitable coalitions like the United Way declined; and religious giving remained level. Where were the biggest declines in charitable giving? Charitable bequests, which saw a 23.9 percent decline. That number, however, is based on an abnormally high baseline: in 2008, Leona Helmsley and Helen Walton left massive estates to charity.
Also reported in Giving USA: overall foundation giving fell by 8.9 percent. Foundation Center reports a similar decline: 8.4 percent, from $46.8 billion to $42.9 billion. But, Foundation Center adds, not half as much as the drop in total foundation assets, which fell 17 percent year-on-year. Thus, giving as a percentage of assets actually rose during the recession, to the highest proportion since 1985. Foundations managed to avoid deeper cuts by paring their own operating expenses (freezing salaries, laying off staff) and drawing more heavily from their endowments than usual. And despite hard times, 27 percent of foundations increased their giving in 2009, and 5 percent kept it at the same level as in 2008. Combined with the remarkable resilience of individual giving, foundation grantmaking continues to contribute to the vibrant American tradition of philanthropic generosity.
The Grocer’s Gift
Patrick Roche and his three brothers attended St. Francis Xavier elementary school in Rosindale, Massachusetts. When Roche was nine years old, his mother passed away. The school, he told the Boston Globe, “was just fantastic. All our friends and neighbors went to the school, and they just became closer to us.” He went on to Boston College, and in 1952 he and his brother Bud opened a meat and produce store in town. That single shop has since grown into a chain of 18 upscale grocery stores across the Boston metropolitan area. Roche frequently credits his success in business to his education in Catholic schools. So much so, in fact, that he recently donated $20 million to the Center for Catholic Education at Boston College, which runs the Urban Catholic Teacher Corps and St. Columbkille School. (For more information on these efforts, please see the Roundtable’s Saving America’s Urban Catholic Schools: A Guide for Donors.) Catholic schools, Roche explained, “never had [financial] troubles when I was a kid. We want to see if we can correct those problems now, and I’m fortunate enough to be able to try.”
Donation for Taxation?
A group of wealthy Americans is pushing for higher taxes. Fair enough. Using an online calculator, they have determined how much money they saved under the Bush tax cuts. On April 15 (get it?), under the auspices of the nonprofit Responsible Wealth Network, about 40 of them signed a pledge. They promised to dedicate their tax savings to nonprofits that will press for higher income, estate, and capital gains taxes. “The project,” reports the Wall Street Journal, “has received support from the likes of Vanguard chairman John Bogle and Richard Rockefeller, chair of the Rockefeller Brothers Fund and great-grandson to John D. Rockefeller.” All of which led one wag to ask: does it make sense for these donors, in their quest to increase public revenues, to deduct this particular charitable contribution?
In April, four philanthropies—the Laura and John Arnold Foundation, the Eli and Edythe Broad Foundation, the Robertson Foundation, and the Walton Family Foundation—together pledged $64.5 million to the DC Public Education Fund to support a new model for teacher compensation. The funding is a part of the contract negotiated between the Washington Teachers’ Union (WTU) and D.C. Schools Chancellor Michelle Rhee. Under the contract, seniority, lock-step pay, and entitlement to a teaching “job for life” are gone; instead, teacher pay is based on a performance-evaluation system designed to reward teachers who boost their students’ achievement. Inserted into the grant agreements was a standard stipulation: the funders can reconsider their commitments if Rhee doesn’t stay on the job for the duration of the grant. Rhee’s tenure in D.C. has been turbulent, however, and while Mayor Adrian Fenty will definitely keep her on board, he is facing a tough primary challenge from Vincent Gray, who has said that keeping Rhee as chancellor is “not inextricably tied” to school reform. Although the WTU overwhelmingly voted to accept the contract in June, Rhee’s job remains up in the air at least until the September 14 mayoral primary.
Jump-starting the Motor City
Henry Ford, Walter Chrysler, William Durant, the Dodge Brothers: these were men of vision, men of daring—the men who made Detroit. Entrepreneurs like them turned a bustling port between Lakes Huron and Erie into the industrial wonder of the world. With the city’s decline, donors have become acutely aware of the need for a similar burst of entrepreneurial creativity. To that end, the Blackstone Foundation—the corporate foundation of the publicly traded private equity firm—has pledged $20 million to jump-start business formation in the Motor City. The grant will be used to bring LaunchPad—a program that provides emerging entrepreneurs with practical skills, networking, and advice, and concentrates its effort among undergraduates, grad students, and recent alumni—to Detroit. Since its founding at the University of Miami in 2008, LaunchPad has attracted more than 1,000 students and led to the creation of 45 businesses and 102 new jobs. “A sustained period of job growth depends on the creativity, innovation, and ultimate success of entrepreneurs in creating new businesses,” said Stephen Schwarzman, chairman and CEO of Blackstone. Schwarzman is surely correct. If Detroit is to regain its stature in the 21st century, it will need another generation of Fords, Chryslers, Durants, Dodges—and Schwarzmans.
According to the Guardian, the United Kingdom passed a remarkable milestone in 2009. For the first time on record, more than half of the funding for nonprofits in Her Majesty’s kingdom came from public resources rather than private contributions. The report found that as the recession swept over Britain, individual giving fell. State funding, however, remained steady. The leaders of British charities expressed concern in the Guardian article about their increased exposure to government austerity measures. None seemed to worry about their institutional independence. Perhaps tellingly, newly elected Prime Minister David Cameron has said, “In the fight against poverty, inequality, social breakdown, and injustice, I do want to move from state action to social action. But I see a powerful role for government in helping to engineer that shift. Let me put it more plainly: we must use the state to remake society.” That process, it would seem, is already underway.
Jaime Escalante, RIP
Jaime Alfonso Escalante Gutiérrez was born in La Paz, Bolivia. In 1963, political turmoil drove the 32-year-old Escalante to the United States. He wound up in Pasadena, California, where he worked as a busboy as he learned English and put himself through community college. In 1974, he started teaching mathematics at Garfield High School in East Los Angeles, best known for its low test scores and high dropout rate. Immediately he got to work, building one of the nation’s most impressive math programs. He accepted no excuses: he would expel students for a single missed homework assignment. The results were phenomenal. In 1978, he taught his first Advanced Placement calculus course to five students. Nine years later, 85 of his students passed AP Calculus—12 of whom passed the more advanced Calculus BC test—as hardscrabble Garfield outperformed plush Beverly Hills High School. But, tired of quarreling with other teachers and the unions, Escalante left the school in 1991. In later years, he campaigned against bilingual education in California. Escalante died of complications from bladder cancer on March 30, but his life’s work goes on. His legacy is manifestly evident in philanthropic ventures like the National Math and Science Initiative, as well as no-excuses networks of high-performing charter schools. But perhaps Escalante’s greatest lesson is this: there is great beauty in mathematics, and much honor to those who live to share it with others.