- Social Media
- Active Citizenship
- Good Giving
- Corporate Responsibility
- Be Fearless
Major League Baseball's recent winter meetings spawned some pretty typical off-season trades and big free agent signings. In New York, for example, the Yankees spent nearly $250 million to sign two pitchers, CC Sabathia and A.J. Burnett. The new Yankee stars will soon be playing in a brand new 50,000 seat stadium that cost over $1.5 billion dollars to build. On the surface at least, it would appear that the current recession is having little effect on the economics of baseball. But as Jerry Crasnick and Peter Gammons have made clear, appearances can be deceiving -- and I think that's true not only in baseball, but also the world of philanthropy.
In baseball, Red Sox owner John Henry has said that the current economic woes could affect offers to the remaining top tier of free agents. There is little movement on second tier free agent signings. And the Wilpon family, owners of the Mets, are being forced to publicly say that the team is unaffected by their financial losses to the Madoff ponzi scheme. In this environment, it seems clear that smart small market teams will need to make financial adjustments to spending on free agents, player development, baseball operations, ticket price hikes and other issues core to their short and long term success.
As Kristin Ivie noted in her post ("Nonprofit Economic Crisis: How Are You Coping?"), nonprofit leaders are preparing to deal with similar issues in their organizations. And Foundations need to address their own set of challenges as well. While the largest philanthropies like the Bill & Melinda Gates Foundation will still be able to pursue their core programmatic work and provide resources to help alleviate the painful impact of the downturn, many foundations and philanthropists are facing a perfect storm of greater human needs and smaller bank accounts -- or in some cases such as JEHT Foundation, no bank account at all.
However, there's no need to let doom and gloom get the best of us. In fact, the current crisis should be seen as an opportunity. As Michael Lewis illustrated in his baseball economics book Moneyball: The Art of Winning an Unfair Game, limited resources can often drive innovation and creative thinking that lead to sustained success. If Billy Beane can get the job done for the Oakland As and their fans, I think Foundation leaders can plot a course of investment, even in difficult times, that can address important community needs.
This is actually a good time for foundation boards to examine their mission and goals and consider some fundamental questions before making spending commitments in 2009:
- Do we still have the resources to accomplish our grant making goals for the coming year, and if not, should we increase our endowment payout to meet our commitments?
- Should our approach be "business as usual," or do we need to reassess our strategy to address unforeseen circumstances?
- Which of our current and former grantees/partners matter most, and what are we willing or able to do to help them thrive during the next 2-3 years?
- Cash is an essential resource, but what talents and skills (legal, accounting, marketing, IT, etc.) can our board members offer pro bono to nonprofit partners in need?
- Are there mission-related investments we can make from our endowment?
- What public or private organizations can we can collaborate with to achieve our goals?
These are not easy questions, and the decisions are even harder. But any board considering them seriously should take pride in its commitment to honesty and flexibility, and may even find itself the author of innovative programming and entrepreneurial solutions that can inspire the field. What strategies are other funders adopting? Let us know...