Greater Hartford foundations experienced many of the harsh effects of the Great Recession, but as Connecticut’s economy picks up, so too have the prospects of the region’s largest charitable arms.
Charitable giving in Connecticut has gradually accelerated in recent years, helping private and community foundations maintain or boost donations to nonprofits that provide social, education, health and other services to some of the state’s neediest residents.
And the timing couldn’t be better, especially as the state’s budget woes have left many nonprofits cash-strapped.
In 2012, the latest available data, Connecticut amassed $4.6 billion in charitable donations, which was up 30 percent from a year earlier. Foundations raised about $1 billion of that total, according to Maggie Gunther-Osborn, president of the Connecticut Council for Philanthropy, which produced the data.
More recently, The Hartford Foundation for Public Giving, the region’s largest philanthropic gatekeeper, said it disbursed in 2014 more than $32.5 million in grants to community and education nonprofits — a record for the 90-year-old organization.
While two tragic events in the last quarter of 2012 — Super Storm Sandy and the Sandy Hook Elementary School shooting — might explain the significant uptick in donations that year, Gunther-Osborn said philanthropic giving by individuals and foundations has steadily remained at around 2 percent of the state’s GDP.
“One of the things we’re trying to do is have a conversation about who is giving and try to increase that giving,” said Gunther-Osborn. “We have remained relatively flat and we want to grow our giving.”
Learning lessons from the Great Recession
Area foundations say that while their goal is to increase donations, they must be somewhat conservative in their community investments, keeping annual grant spending fairly consistent from year to year to protect their assets and long-term viability. It’s a lesson many foundations and nonprofits learned after the Great Recession wreaked havoc on their endowments and other nest eggs.
The Hartford Foundation for Public Giving, for example, has enacted a five-year spending policy that aims to buffer the organization from unavoidable and frequent economic swings.
“When 2008 hit we were still working off of income and investments from 2003,” said Judy Rozie-Battle, Hartford Foundation’s vice president for grantmaking and community outreach. “There were other foundations that were severely impacted. This policy allows us to be smooth and steady through rough times.”
Carol Pollack, vice president of finance and operations for the Hartford-based Connecticut Health Foundation, said her organization lost about a third of its $150 million investment portfolio during the Great Recession, but was still able to honor most of its commitments to the nonprofits and communities it serves.
Connecticut Health is the state’s largest private health foundation focused on expanding access to health care for minorities and underserved communities across the state.
“We pretty much maintained our level of grantmaking,” said Pollack. “In order to do that, we dipped into our portfolio balance because we didn’t want our giving to fluctuate with the market.”
Since then, Pollack said the foundation firmed up its spending policy and began looking at its investment performance over a five-year period.
“We now know that we shouldn’t spend more than 5.4 percent of the average investment portfolio over a five-year period,” said Pollack.
Cynthia Clegg, president and CEO of the Community Foundation of Middlesex County (CFMC), said her organization’s $4 million endowment took a sizeable hit during the recession, but its finance and economic committee quickly created strategies to counteract economic hardships.
Clegg said CFMC, which awards grants ranging from $500-$7,500 to arts, education, environmental and other causes, began actively and aggressively fundraising to supplement its endowment. It also created a nonprofit resource center to complement its charitable-giving role.
“We wanted to see what we could do outside of the financial giving,” said Clegg. “The center offers workshops, seminars and consultations to address the wellbeing of area nonprofits.”
By the end of 2014, Clegg said CFMC had $12 million in assets, which includes its endowment and cash.
The Hartford Foundation’s five-year funding average is $31 million, said Rozie-Battle, but they increased it to nearly $33 million in 2014 because donors were eager to spend more.
In all, Hartford Foundation distributed 1,997 grants to nonprofits in 29 Greater Hartford communities last year.
Rozie-Battle said the largest share (29 percent) of grants went to the Hartford Foundation’s biggest priority: education.