Many people have the dangerously erroneous impression that foundation and corporate philanthropy will make up for a good part of the anticipated government cutbacks. This thought is shared by government leaders who are proposing the cuts and by voluntary organizations and their clients who will sustain them. The programs affected range from arts to jop training. As unpleasant as it is to add to the harsh news already facing so many voluntary groups, it is only a matter of fairness and reality to make clear how erroneous that impression is.
For example, even if corporate philanthropy could maintain the 12 percent average growth rate of the past three years -- and my own fund-raising efforts of late lead me to believe this not realistic -- the increase would be only $300 million nationwide, which will hardly make much of a dent in the reductions. As significant as corporate giving has become, it is still only 5 percent of the annual total of gifts to charity. h
Foundations will even be less able to help. The stock market's uncertainties and federal regulatory excesses have combined to shrink both the number of foundations and the real dollars available from them. Ten years ago, foundations represented 10 percent of all U.S. philanthropy. In just a decade, the proportion has dropped to 5 percent. Though there is legislation pending that will help the situation somewhat, it is hardly likely that there will be new foundation dollars to match the immediate need.
For the long term, it is personal giving that will represent the greatest hope for reviving many of the programs and organizations faced with major reductions, but the turnaround will be slow. Giving by individuals represents 90 percent of all philanthrophy in this country, but even before the impact of dobule-digit inflation, personal giving had been declining as a proportion of both personal income and gross national product. Now, in face of continued inflation and increased unemployment, it is just not realistic to expect individuals to be able to pick up the sudden slack. There is legislation pending that will stimulate private giving on the order of 10 to 15 percent, and that is our largest single hope to compensate for some of the cuts. Even passage of the charitable contributions legislation, however, will not solve the immediate crisis faced by many organizations now heavily dependent on government funding.
Coalitions of corporations and foundations will probably come together in many communities to pool funds to try to help some of the most desperate community groups, including many of the emerging neoghborhood organizations that are so vulnerable to the cuts. A large proportion of these recently formed and funded neighborhood groups are heavily dependent on government funding. They receive their funds through a variety of government programs, such as the federal government's Urban Development Action Grants (UDAG) and Comprehensive Employment Training Act (CETA).
the organizers and prime movers of these neighborhood-oriented organizations are very often the current generation of leaders of their populations. If government cutbacks force too many of these groups out of business, the composite anger of these leaders and their constituents will likely be beyond containing. This argues for government to be extremely cautious in dismantling the net-work of grass-roots leadership. They are an important way to reach, serve and steady those truly needy about whom the president is concerned.
Foundations and corporations are likely to try to fill some of the gaps in funding for these groups. Although funding deficits and compensating for government cutbacks are contrary to philanthroy's usual and preferred roles, many grant-makers will be alert to what these unusual time require. They will not have the funds to carry on many of the programs of these local groups, but they can help keep the organizations alive until a more stable funding base can be built.
During that time, we can put to work the clear lesson that all who wish to build independent organizations must be absolutely sure that dependence on government is not again allowed to become so complete. It will be a slow road, and, in the meantime, the organizations that desperately hope they can suddenly switch their dependence from government to corporate and foundation philanthropy are in for their second awful shock. Sadly, many will not survive it.