Dec 17, 2008

The Global Financial Crisis and Philanthropy: Looking Beyond the Immediate

by Tim Ogden

The Bernard Madoff ponzi scheme is just the latest bad news for the philanthropic sector coming out of the global financial crisis.

Three recent articles/interviews by Philanthropy Action’s editors published here and elsewhere, look beyond the immediate questions of potentially falling donations to the broader implications:

* We’ve been speculating on the potential impact of the credit crisis on microfinance. To get some answers we posed the outstanding questions to Roger Frank of Developing World Markets, one of the leading institutional investment brokers in microfinance. He believes a shakeout in microfinance is imminent.

* The number of philanthropy advisors of various sorts has grown rapidly in the last few years in concert with the zeitgeist of “new philanthropists” who “want results.“ Writing in Alliance Magazine, managing editor Laura Starita examines whether these new philanthropists are actually willing to pay for the information and analysis they say they want, especially now.

* More and more foundations are reporting dramatic declines in their endowments, seemingly justifying the generally low payout rates that allow foundations to survive despite losing a big chunk of their endowments. Nonetheless, editor-in-chief Tim Ogden writes in Alliance Magazine (and in an expanded piece here), that it’s time to rethink the value of foundation perpetuity.