It pulses through us, we believe it without reservation, still there are those who respond like they are from Missouri. Show me. The December 2008 publication by Robert J. Shapiro and Aparna Mathur shows everyone full flag, The Social And Economic Value Of Private And Community Foundations. You can get a copy online at http://www.philanthropycollaborative.org/
Applying economic analysis to the grants made by foundations of all sizes across the United States, Shapiro and Mathur determine the benefits that accrue from those grants. “Each dollar of a foundation grant also produces indirect economic benefits by boosting employment and incomes for the beneficiaries of these private and community foundation activities, and new government revenues based on this additional income. While these indirect benefits also vary substantially across grant areas, we find that the $42.9 billion in foundation support extended in 2007 helped to generate nearly $512 billion in additional household income and some $145 billion in additional government revenues.”
The average estimated return produced by a dollar in grants and support last year was $8.58 in direct, economic welfare benefits. The authors broke the benefits into 11 borad, grant areas with multiple examples in each grant area, all from 2007. In Arts and Culture some $5.2 billion in grants and support generated $51 billion in social and economic benefits for a return on investment (ROI in the publication.) of 9.7:1
Education which included scholarships as well as institutional and research support turned $9.7 billion in grants and support into $49 billion in benefits for a ratio of 5.08:1 For county libraries, considered a part of this broad area, the return ratio was 5.02:1
For Environment and Animals/Wildlife the grants and support totaled $2.57 billion and generated more than $17 billion in benefits with an average ratio of 6.72:1 Four-fifths of the grants were for environmental programs with the remaining going to animals and wildlife.
The Health area covered a very wide range of programs and activities. Health-related organizations and programs received $9.86 billion and generated $75 billion in benefits. Hospitals And Medical Care received 21% of the grants as did Public Health. Medical Research received a 26.4% share. An average social rate of return was 7.60:1 with examples varying from Treatment for Heart Attack at 1.10:1 to intervention for infants with haemophilus influenzae Type B at 22.99:1
Human Services was divided into eight subcategories of (1) Crime, Justice and Legal Services, (2) Employment, (3) Food, Nutrition and Agriculture, (4) Housing and Shelter, (5) Safety and Disaster Relief, (6) Recreation and Sports, (7) Youth Development, and 8 multipurpose Human Services. An estimated $5.94 billion was given to Human Services with benefits valued at more than $64.7 billion. The estimated return on investment was 10.91:1
Public Affairs/Society Benefit divided into (1) Civil Rights and Social Action, (2) Community Improvement and Development, (3) Philanthropy and Voluntarism, and (4) General Public Affairs and Society Benefit. This area gets big results. For $4.58 billion given the benefits amounted to $101 billion, giving the category an average 22.04:1 ratio of return on investment. An Offender Aid And Restoration project produced a ratio of 48.7:1 There is more to be learned about this program at www.oaronline.org
Science and Technology received $1.24 billion and returned $6.13 billion for a ratio of 4.96:1 Some programs in this area could have been placed in the Medical Research subcategory of Health.
International Affairs, Peace, Human Rights received $2.29 billion but there are no scientific metrics to measure the economic or social benefits for many of these programs. Creating public pressure to relieve the suffering of political prisoners is not a numbers thing. The authors “assume that these programs yield returns of approximately 1.0:1″ The Social Sciences area presents the same kind of problem as International Affairs, Peace, Human Rights. Examples are The Aspen Institute, the Center for Economic and Policy Research, and the Alliance for Justice, so the area is given a ratio of 1.0:1 for the $581 million given to it.
Finally the last two areas of Religion and “Other” are handled in the same way. Religious-related programs received $926 million and another $37 million for programs that don’t fit in any other area. They too are given a ratio of 1.0:1
The authors end their report with brief comments on the indirect benefits of foundation support and the damaging impact of taxing foundations and nonprofits.
There are ill winds in Congress that we must watch closely. Racist politics and a disrespect for foundations and nonprofits may gain more support. If those forces are successful the damage would be massive. Be forewarned and informed. Charles Marlin