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Foundations are generous to social service agencies, but have limits
THE FRAYING SAFETY NET
Sunday, March 27, 2005

When remnants of Hurricane Ivan flooded Etna, Carnegie and other communities last September, Pittsburgh's foundations came through with more than $3.4 million in grants. For many business owners, frustrated that federal officials were offering only loans, the foundation money meant the difference between reopening or walking away.

In February, William Trueheart, president and chief executive officer of The Pittsburgh Foundation, headed a group of nonprofits that offered $6 million to ease the city's financial woes.

Time after time, the Pittsburgh region has benefited from the generosity of local foundations, which have funded everything from disaster relief projects to city swimming pools when public money fell short. One group lists Pittsburgh as second only to Seattle in per capita foundation spending.

But if federal and state cuts threaten vital human services programs, can the people of Southwest Pennsylvania look to its foundations to rescue them?

The short answer is no.

In fact, some think we may already have become more dependent on foundation dollars than is healthy.

"The foundations are putting very large amounts of money into our community and I think the foundations will continue to make those kind of investments. But there is an upper limit, and I don't know what that upper limit is," said Trueheart, who in November was named board chairman of Independent Sector, a leading national organization of foundations, nonprofits and other charitable groups.

Marge Petruska, who oversees grant making for The Heinz Endowments, describes the foundations' role as "a strategic filling in," primarily through collaborations with public agencies.

But she and others say foundations can't possibly take over the government's role in providing services for the needy and vulnerable. "Foundations don't have enough money in the world to meet the needs that government has been meeting," said Gerri Kay, vice president for program and policy at The Pittsburgh Foundation.

The same is true for the United States as a whole.

Nationally, foundations account for less than 3 percent of the funding for human services. Locally, even when combined with money raised through United Way, the total looks like a sapling next to the oak-size county human services budget.

As it is, foundations must turn down far more requests than they fulfill.

Petruska said The Heinz Endowments receives about 2,000 funding requests each year, ranging from new providers wanting startup money, to established agencies who need a van to transport their clients. About 100 of those applications, or 5 percent, are successful.

Also, a 2003 Forbes Funds study suggests that Pittsburgh may be leaning too heavily on the foundation community. Because they've come to depend on that money, "nonprofits in Allegheny County have inadequately developed alternative streams of incomes, especially income derived from individuals' contributions," the study found.

As public money tightens, that's an inadequacy that may loom larger in coming years.

First published on March 27, 2005 at 12:00 am