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Wednesday, Jan. 14, 2009 | This year, nonprofits in the social services field are likely to take a triple hit — squeezed by a delayed state budget, falling contributions and rising demand. No one knows how severe this situation will become, but it does not look good.

However, as the American industrialist Henry J. Kaiser once said, “Trouble is only opportunity in work clothes.”

When it comes to philanthropy, the economic crisis presents San Diegans with an opportunity. It is our chance to step up and become leaders; to face the tough decisions and find ways to do things more efficiently. It is our chance to focus on our community and take care of our own.

A few months ago, San Diego Grantmakers and the University of San Diego’s Caster Family Center for Nonprofit Research released the county’s first report on the state of “organized philanthropy,” also known as grantmaking.

The report shows that San Diego’s giving is shaped by our distinctive economy and unique characteristics. We have many small and medium-sized companies, but few corporate headquarters and few large foundations. Most of our philanthropic growth is centered in small family foundations and donor-advised funds. The “asset pool” — the amount of money available to distribute via grants — is dramatically smaller than in San Francisco, Los Angeles, or even cities of comparable size elsewhere.

The end result is that every dollar counts. In a small pool, decisions take on greater magnitude. For example, our study found a trend among some corporate contributors to shift money away from arts organizations and towards environmental causes. In another city, those arts groups might be able to find a different funding source to fill the vacuum. Will that be the case here?

Our research showed that grant dollars appear to be most highly concentrated in Poway, Escondido, La Jolla, Sorrento Valley and Southeast San Diego. The southern border region and Chula Vista also attract a fair amount of grants. But there are pockets that receive little funding, such as Imperial Beach and National City in the south; Valley Center, Vista and Oceanside in the north; and the rural areas of East County. What can we do to create a better match between giving and areas of need?

We discovered that more than half of the private foundation grants received in San Diego come from foundations located elsewhere. This means that local nonprofits are competing on a statewide or national stage. How can we raise our regional profile and bring in more dollars from outside San Diego?

Although our report focused on foundations and corporate donors, individuals play a critical role. In fact around 80 percent of giving, in good times and bad, comes from individual donors, not foundations or businesses. For nonprofit organizations, this is the time to build up relationships with supporters large and small. They are the bread-and-butter that can help even out dips and swings in the grant world. Sean Stannard-Stockton, principal and director of Tactical Philanthropy at Ensemble Capital Management, sees individual contributors as the Second Great Waveof giving. To be in a position to catch this wave, nonprofits must deepen and strengthen existing relationships while reaching out to the online world.

For both grantmakers and grantseekers, now is the time to take a hard look at your strategies, tactics, and operations. Some sacred cows may have to be revisited, including issues such as back-office consolidation, mergers and partnerships. There is an opportunity for board members to set the standard in advocating for greater efficiency and effectiveness.

One way we can become more strategic is to learn from others. For example, San Diego Grantmakers provides forums for our members to network and stay up to date. We share best practices about ways to leverage dollars and achieve the greatest impact. But regardless of whether you’re a member, we invite all philanthropists to use our researchto inform your decisions and guide your investments.

The bottom line is that we must support and inspire philanthropic organizations and individuals to use their money wisely to address the most pressing local needs. We will continue to address this issue with our members, but we encourage every San Diegan to think about ways to stretch limited dollars and help those closest to home.

These are difficult times, no doubt. But we are confident that we can rise to the challenge. The health and well-being of our community depends on it.

Nancy Jamison is executive director of San Diego Grantmakers. You can e-mail her at Grantmakers is a membership association of 90 philanthropic organizations with a mission to connect, educate, develop and inspire a diverse group of foundations and corporations to stimulate effective philanthropy in the San Diego region.

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