The Starr Foundation, set up in 1955 by US insurance entrepreneur Cornelius Vander Starr, donated US$124 million and approved a further $194 million for its beneficiaries in 2006.
Among them was NetsforLife, a distributor of long-lasting insecticide-treated nets to ward off the mosquito carrying a disease that kills a child every 30 seconds. One million people die from malaria each year and 300-500 million more are estimated to be infected.
However, the foundation’s assets, worth some $3 billion, were all tied up in AIG and a few months ago, the insurance giant tanked; the loss to Starr was $1 billion. Logic would imply retrenchment in New York and danger for more African children. But none of the recipients of Starr’s largesse has reported any reduction.
“Foundations are basically in the business of giving away money, making grants; that’s what they do, and they’re very much committed to maintaining as stable a level of giving as possible,” Steven Lawrence, senior director of research at the Foundation Center, a leading US authority on philanthropy, told IRIN.
“Many of the biggest foundations are determining their grant budgets based on averaging out their values over several years, which will help to smooth out the differences. They may be willing to dig deeper into their endowments to ensure a stable level of giving, certainly during a shorter-term downturn.”
But he does have a caveat. “If this ends up being a longer downturn, there’s no question that it’s going to have an impact on overall foundation giving.”
Starr itself declined to comment, but Episcopal Relief and Development, the international aid agency of the US Episcopal Church and Starr’s partner in NetsforLife, told IRIN the foundation intended to meet its outstanding commitments.
After the last US recession in 2001, the Foundation Center reported marginal reductions in total giving, whether for domestic or foreign charities, from $30.5 billion in 2001 to $30.4 billion in 2002 to $30.3 billion in 2003. But this drop (4.4 percent after inflation) was quite modest compared to the inflation-adjusted 16 percent drop in foundation assets.
As regards funding for foreign operations, Lawrence noted that there was some decrease in aid targeting international activities, excluding the Bill & Melinda Gates Foundation
“But certainly what we do find is that, based on interviews, foundations are very committed to their international grant-making,” he said. “Foundations that make grants internationally have given this a lot of thought, are committed to this, so even if they need to reduce their giving, what’s likely to happen is that the giving will be reduced proportionally versus cutting back more on international giving than on domestic giving.
“They may have to make cuts across the board, but international grant-giving is not going to be disproportionately affected.”
A survey by Chronicle of Philanthropy of the largest US businesses found that companies' overseas giving as a percentage of total donations has been growing for some time.
“Companies are channelling a growing share of their donations outside the United States,” staff writer Caroline Preston told IRIN. “That trend is expected to accelerate as corporations open new offices and sell more products in foreign countries.”
Most foundations have diversified their investments to lessen any hit, Lawrence said, noting that the Gates Foundation turned around its Microsoft stock, reselling it and diversifying its portfolio. It has given more than $17 billion in global grants since 1994.
“We will not deviate from our strategies and our planned grant-making to support strong public education in the US, and to further global health and economic and social progress in poor countries,” director of public policy Geoff Lamb told IRIN. “As we navigate the difficult period ahead, we will be working with grantees and partners to ensure that we all remain focused on delivering good outcomes despite the economic pressures.”
The Gap Foundation, grouping Gap, Old Navy and Banana Republic stores, sees women in the developing world as one of the targets of its charitable work, helping them to build their education and work skills. “We remain committed to continue giving back to the communities where we do business,” Bobbi Silten, chief foundation officer, told IRIN, noting that women comprised the majority of garment workers worldwide.
Pharmaceuticals giant Pfizer Inc and the Pfizer Foundation donated $1.7 billion in combined cash and products in 2007, with medicines accounting for 95 percent. “Pfizer is committed to meeting its obligations for these projects and continuously looks for strategic global partnerships to improve access to medicines and healthcare,” spokesman Imraan Munshi told IRIN.
However, he added, “If future financial adjustments are made, it would probably impact [on] our ability to develop new programmes in the future.”