Thursday, October 15, 2009

Bailout? Bail Out The American People

"In light of the auto bailout, the bank bailout, the stimulus package,
the public option fight is a surrogate for how much government is
too much."
(New York Times, October 15, 2009)

Kenneth M. Duberstein
Chief of Staff/Reagan White House

If "the public option fight is a surrogate for how much government is too much," then for sure the fact that our country is literally falling apart must be a surrogate for how much government is too little.

The outcome of health care reform is still an unknown. Every special interest but one - the American people - has been able to put a big wet dog in this hunt. Michael Moore's shambling theatrics and bumbling delivery aside "Capitalism, A Love Story" nails the lobbyists' takeover of the Congress. Like you I have spent this last year watching the bailout at work, i.e., the privatization of corporate profit and the socialization of individual loss.

This film exacerbated my peasants-should-storm-the-castles feelings which is ridiculous for anyone my age. I should know better. But I don't. The professional world I inhabit is, and has long been, a mutually interdependent amalgam of private-public money. Private philanthropy - no matter how robust - cannot make up for the absence of government support, my rant for years. There is no better proof than the havoc the Great Recession has wrought upon US charities, especially human services, and reflected in the down-drift of contributions last year. (Giving USA 2009). I am slightly to moderately optimistic for 2010 if the market holds up. (Viz. Oct. 13th post).

Private industry - except when fertilized to the root by taxpayer money - will not deal with our tottering infrastructure, lagging public education, underfunded scientific research, support for the color green in all its manifestations, essential social services and yes, that past-its-sell-by-date piece of mackerel marked "health care reform." The American people are losing out. In just about any category of accomplishment in which we were once first we are now the trailing edge - except for advances in throwing out immigrants and making airport security even wackier than the Mad Hatter.

It is hardly a wonder that government and legislators, at every level, are despised by most of the American people; nor is it a surprise that almost 60% of the voting eligible would rather sleep in on election day or water the plants.

Time is running down for President Obama on health care. He never had the right. The left is mad but the left doesn't matter. The center? So far it all comes down to a Senate Republican from Maine. That's scary.

It makes me want to reach for my bucket. But not for bailing.

Wednesday, October 14, 2009

Is It A Turnaround Or Are We Just Running In Circles?

At this moment the Dow is up another 96 points (Wed. Oct. 14th, 11a EDT). The spectacular run-up in the stock market since the March low may or may not be a chimera. The high unemployment rate shows that all is not well in the economy and it is established fact that Wall Street is not really connected to the rest of the country. So what for next year? Six months or a year from now I'll look back at this post and see how well I did.

The huge grant-making foundations and university endowments lost money but are now making back much of that loss. They may not get back to their all-time highs anytime soon, or maybe never. But the question is if the market surge continues will grant-making and endowment income improve in 2010? If you are a nonprofit board member you should be asking your managements if they are budgeting for an improvement in the foundation line in 2010. Those on June 30 and September 30 fiscal years are already into the 2010 fiscal year and their boards (presumably) have approved budgets. Of course they can be amended - but should they? There are no signals coming from the foundation world to guide us that I have seen. They seem hunkered down, quietly amassing gains.

So here I go (again): if you are already a grantee I would ask/hope for a modest increase in funding - say 5-10%. If you're a new supplicant I think you'll find that most foundations have not opened the window. I doubt they will much before the late mid-last quarter of 2010.

Old line corporate philanthropy will not see much of a boost in 2010 but the trend to cause-related marketing will, I think, continue to widen and deepen with more and more charities trying to get in. One CRM firm I work with is running ahead even this year. By the way if you are familiar with the statistics Giving USA publishes annually keep in mind that they don't report on CRM because they haven't quite figured out how to get the data: what's charity (which is what GUSA measures); what's marketing?

That leaves individuals and family foundations. I think that as 2010 wears on we will see a very health boost in individual giving and we all know that - dead and alive - individual giving is about 80% of all giving as measured by GUSA.

In "Back To School," my September 9th post I advocated caution. I still do but a month later I have loosened the belt one notch.

I have been telling clients and professional colleagues all this year to plan for the turnaround. Is the turnaround here or are we just going in circles?