Community Matters

I love history – particularly 20th-century American history. I believe it all began when my first grade teacher Miss Lodestro chose me to present a gift to Governor Nelson A. Rockefeller when he came to my hometown of Jamestown, New York, to dedicate the new community college campus.

I love history – particularly 20th-century American history. I believe it all began when my first grade teacher Miss Lodestro chose me to present a gift to Governor Nelson A. Rockefeller when he came to my hometown of Jamestown, New York, to dedicate the new community college campus.

That was in 1960. Fortunately, I had other opportunities to meet Governor Rockefeller – a man who represented one of the most philanthropic families in the United States.

My grandmother – Mary Martinelli – was born in 1903 and lived through the entire 20th century. In the spring of 1929, she became a widow with two young children. A few months later, the Great Depression hit the country and Mary Martinelli lost most of her savings. Suddenly, providing food and shelter became the priority. Many times she told me how painful and difficult it was for her to recover from that economic cataclysm. She often said, “You are so lucky that you will never live to see banks close and your hard-earned money ‘go poof.’”

Guess what? My grandmother was wrong. I did live to see banks fail. During the summer of 2008, I was driving to my office and saw a huge crowd gathering outside the Pasadena headquarters of Indy Mac. That was the day Indy Mac failed – and I was a witness to history repeating itself.

It seems no one was immune from the crisis. People saw a rapid decline in the value of their hard-earned retirement funds, savings accounts and home values. In my view, the financial market crash has served as a defining moment for our generation, much as the Great Depression did for our grandparents.

What does this have to do with charitable giving? Most of the charitable giving in this country is provided by individuals. Why do individuals give? Loyalty to an alma mater. Gratitude toward a local hospital for care received or a life saved. A desire to honor the memory of a loved one. Our social contract has always stated that we give to those less fortunate.

What is the impact on philanthropy? Many of us were taught us that if you worked hard, went to college, got a good job and saved money, you would be able to meet your family obligations with enough left to give back to society. But those pensions that you counted on could be evaporated by a court procedure. Insolvency, liquidation, foreclosure, dissolution, and bankruptcy have become daily news headlines.

So the first impact on philanthropy is obvious – people are not feeling like they have achieved economic security, causing them to reconsider their generosity toward non-profits. Individual donors seem less inclined to make a multi-year commitment due to the turmoil in their balance statement.

In 2009, Americans made gifts totaling approximately $300 billion. But the federal government, through a new acronym known as A.R.R.A. (the American Recovery and Reinvestment Act), made nearly $800 billion available through stimulus funding. Charities are scrambling to get in line for this new source of funding.

Therein lies the second impact on philanthropy. People think that the government will handle an organization’s capital needs. There are countless examples throughout the country where a private organization, charitably organized, was struggling to get the message out that it needed private dollars. Along came federal government money, and the focus shifted from philanthropy to “who can best understand A.R.R.A. funding?”

Perhaps this has made philanthropy less appealing to private donors. Why would a private donor, already feeling vulnerable due to declining assets, make a significant gift when the federal government is exercising its largesse? As someone who considers himself quite philanthropic, I have altered my giving based on the harshness of the new economic realities. Rebuilding my personal assets, funding my son’s college education, and planning for retirement have taken more of my hard-earned dollars.

Economic security is something that people strive to achieve as a prerequisite for being generous, and many of the pillars of that security were put at risk by the changes that took place in our economy. My concern for the future is how non-profit organizations will navigate the waters brought on by this sea change.

Nelson Rockefeller figured it out. He and his brothers created the Rockefeller Brothers Fund because they were not satisfied meeting their obligation to society through the foundation that their grandfather had created. And my grandmother figured it out. When she died, she had a bag stored in her bedroom that contained several thousands of dollars – because she never regained the trust in those banks that closed.

So hopefully we can weave together the lessons of Nelson Rockefeller and Mary Martinelli and develop a new attitude that will be based on the core values of stewardship, justice, philanthropy and the social contract.

Joseph M. Zanetta, J.D. is president of the Providence Little Company of Mary Foundation and has 30 years of experience as a fundraising executive.

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