Summer 2009
As the State of Connecticut and many local nonprofits began a new fiscal year on July 1, a summer of fiscal uncertainty – and potential instability – lay ahead. A state budget will sooner or later be passed, but it will mean major reductions in contracted services. Many nonprofits will not be able to carry on specific programs during this period of waiting. They don’t have enough reserve funds, nor should they necessarily risk those dollars in the uncertain expectation of restored funding. Meanwhile, demand for services will surely rise.
Regrettably, private funding sources like American Savings Foundation are in no position to fill the wide gaps in government funding. Our grants budget is down this year and is certain to drop again in 2010. The stock market has stabilized and the outlook is better than it was in late winter, but the Foundation’s endowment and contributions budgets will not bounce back quickly. Most analysts believe the economy is not headed for a cyclical recovery, but will be “re-set.” Virtually no one predicts a return to “normal.” This is the new normal.
At our end, we don’t expect agencies to do more with less, as if fat and bureaucracy were weighing them down. Even the most effective, well-run nonprofits are facing devastating cuts in their budgets. It may be a matter of doing less with less, but doing it so that effective organizations can survive and critical services can continue.
More than ever, in this environment, the American Savings Foundation will review grant proposals in light of the long-term planning and fiscal viability of programs and organizations. It is critical that grant-seekers provide us with more information about their financial challenges, and show us how they are planning to adapt. This economy is forcing both funders and grant-seekers to come to terms with the new normal and to re-set plans for the future.
Along with many other funders we are prompting nonprofits to consider partnerships, affiliations and mergers. These are not instant solutions, nor do they apply to everyone. However, we are collaborating with our foundation colleagues to provide guidance and technical assistance to agencies looking for help with planning and restructuring.
Towards the end of the summer, together with the Community Foundation of Greater New Britain, we will offer a follow-up to the Partnership Matrix program that we hope will enable agencies to pursue strategies for success. We are similarly working with the Connecticut Community Foundation in Waterbury to support agency planning.
Our lasting commitment at the American Savings Foundation is to keep faith with our core mission and build on our 15 year legacy, making grants and scholarships with an emphasis on benefiting children, youth and families.
David Davison
President & CEO
American Savings Foundation