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Three tips for Community Foundations as recession fears grow

Kevin Karpuk//December 16, 2022

Three tips for Community Foundations as recession fears grow

Kevin Karpuk//December 16, 2022

In the shadow of potential economic hardship, it can be difficult for service-oriented organizations to plan for 2023. The economy has posed a myriad of obstacles across the country and in the Lehigh Valley, and the community has certainly felt the impact. As ours and other communities struggle to navigate an increased cost of living, housing shortages and a roll back of COVID-era government relief programs, the role of community foundations is more important than ever.  

Community foundations are experiencing the same economic pressures as individuals, families and business owners across the country. To move forward successfully, community foundation leaders need to be thinking long term. Making rash decisions focused on the short-term, rather than taking the time to think strategically and consider the overall long-term goals of the foundation, could be damaging. Community foundation leaders should take a deep breath and keep the following considerations in mind in the new year and beyond:   

  • Conduct a Temperature Check: The very purpose of community foundations is to serve the community. When the market is less than favorable, corporate leaders may be tempted to reduce spending until the economy picks up again. This is not an option for community foundation leaders, as the demand for their foundation’s services often increases during difficult times. This is a good time to reach out to the community to understand where they are hurting and find strategic ways to meet the community’s needs. This tactic can help ensure the foundation’s resources are being allocated productively. 
  • Engage: Volunteering, networking and fundraising events are vital to the culture of a community foundation. Taking a boots on the ground approach can help a community foundation build stronger relationships with the community at present and over time. This is vital to the longevity of the organization and when times are difficult, events can give the community a tangible place to connect with the foundation and voice their concerns and needs. 
  • Freshen the perspective: In addition to engaging the community, foundations need to listen to different perspectives to serve the community to their fullest potential. To go a step further, community foundation representatives should look at their leadership and ask themselves if they truly represent the community – taking age, economic and educational background, family structures and more into consideration. If the foundation does not make decisions reflective of the entire community, it could be difficult to serve them. Additionally, new and broader perspectives may bring fundraising and service ideas to the table that would have otherwise gone unheard. 

It can be difficult to continue to forge ahead given the uncertainty that comes with economic downturns, and many foundations may seek to hunker down and rein in spending. However, unless foundations are already dramatically overspending, it is important to recognize that these periods of downturn are temporary, but the need for community foundations is not. Push back on the urge to lie low during trying times and tap into the knowledge, experience and support of the people who need the organization most. In the long term, the effort a foundation makes today could translate to significant growth when the economic environment inevitably shifts again.  

Community foundations already possess what they need to get through any economic hump – the support of the community. Work with your financial advisors to develop a plan that increases donation drives to support short-term needs, while maintaining a constant view of your long- term mission. A new year always presents a new beginning, a time for change and fills most with a sense of optimism. Let’s bring that optimism to 2023, prepared for an unpredictable future, but grounded in the noble purpose of community foundations – to support those around us.  

Kevin Karpuk is Chief Investment Officer at Cornerstone Advisors Asset Management. Kevin joined the company in 2000 after graduating from Lehigh University with a B.S. and M.S. in Economics and earned his CFA charter in 2005. Kevin supports many charitable causes and has established a donor-advised fund to support his philanthropic interests. 

 

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