The financial meltdown of 2008 not only sent financial institutions, corporations, and Wall Street reeling, it also sent non-profits, foundations, and other charitable institutions worrying about their futures.
According to Steven Lawrence, Senior Director of Research at the Foundation Center, "The scale of the current financial market meltdown and the reach of its impact throughout the United States and globally feels, in many ways, unprecedented. With no clear bottom yet in sight, it can be tempting to conclude that the work of many institutions will be imperiled or, at a minimum, substantially compromised."
Atlantic Philanthropies President and CEO Gara LaMarche outlines several effects that the current global economic situation, which originated in the West, will have for organizations around the world:
• Foundation endowments will have considerably less value today than at the time the endowments were made.
• Even non-profits "fortunate enough to have endowments" are feeling the financial crunch.
• Corporate philanthropy will be dramatically reduced, and individuals who are fortunate enough to keep their jobs will be "much less generous in their personal giving."
• Government revenues and social spending will continue to shrink.
LaMarche calls the financial crisis "a kind of perfect storm."
In Asia, the U.N. children's agency UNICEF warned that "tens of thousands of young children… could die as a result of the food and economic crisis." According to a report quoted in a Chinese website, mortality for children under the age of five, in East Asia and the Pacific, could "increase by up to 11 percent in countries severely affected by the crisis."
As of this writing, several multinational corporations based in Southeast Asia have already closed their operations. Even economic China is experiencing a slowdown. For organizations heavily reliant on corporate philanthropy, the closures, shutdowns, and mergers and acquisitions could mean not only budget cuts; it could also mean program closure altogether.
In a Joint Breakfast with the Coordinating Committee of the Worldwide Initiative for Grantmakers’ Support (WINGS) in late November, some APPC Board Members shared how non-profits in Asia are changing due to the crisis. In Singapore, the government has challenged the non-profit sector to raise the number of volunteers as it seeks alternative resources for programs. A rise in corporate volunteerism and knowledge transfer is also predicted in the Philippines and corporate giving efforts will focus more on enterprise and community development.
India is also gearing up for more employee engagement in community initiatives, with CAF India partnering with companies such as RBS, Barclays and Pepsi to launch “Give as You Earn” Program. This kind of involvement is a way to increase morale especially in this time of crisis.
At the Clinton Global Initiative-Asia meeting in Hong Kong held last December, business leaders showed how it made sense to integrate business objectives, corporate social responsibility, and social entrepreneurship especially in times of crisis.
Datuk Vinod Sekhar, president/CEO of the Petra Group, spoke of how the poor can be considered a market segment that can be empowered and developed. "Make money, but make a difference," he said.
For his part, actor-turned-philanthropist Jet Li has been exhorting individuals to engage in philanthropy, saying that small efforts, when put together, will make a big difference. He founded the One Foundation in April 2007 and has since become an ambassador for the Red Cross.
He said in a speech last November: "Government should continuously improve laws and regulations to guarantee a sound legal environment; enterprises, besides donating money, can also provide intellectual and information resources for philanthropic organizations; and every world citizen has the duty to put something back into society in a spirit of gratitude and love, for the sake of humanity."
In this time of crisis, it will become imperative for corporations and enterprises, non-profits and civil society groups, and individuals and communities to help each other weather the impact of this financial storm.