If State-wide Giving is at an All-Time High, Why Are Chicago Nonprofits Struggling?

According to a report released by the Donors Forum and the Foundation Center, philanthropic giving in Illinois is at an all-time high. In 2013, statewide giving reached a record $3.1 billion. This figure includes all grants of at least $10,000 reported by 1,000 of the largest U.S. independent, corporate, community, and grantmaking operating foundations by total giving.

According to Donors Forum, this sample included 51 Illinois foundations with giving totaling $671 million. However, it should be noted that there are more than 5,200 foundations that make grants to a variety of causes in the state of Illinois.

And it should come as no surprise that most of these foundations are headquartered in Chicago and the surrounding suburbs. For example, Cook County-based foundations accounted for 56 percent of Illinois giving in 2013. Foundations here are growing at a slightly faster rate than the national average, and overall foundation assets have grown at least a little bit every year over the past decade.

There's no data on 2014 yet, but it's a good guess that local giving last year was even higher than it was in 2013, given that overall national trends have been upward. 

But here's an obvious question: In light of these upbeat statistics, why are Chicago nonprofits still struggling?

One big reason is that there's no way that philanthropy can ensure that nonprofits have everything they need at a time when government cutbacks are rising. You don’t even have to keep up with local politics to know that the city of Chicago and the state of Illinois face huge debts, deficits, and budget crises. In 2013, the Illinois state budget General Revenue Fund totaled nearly $30 billion, while the state's budget deficit was estimated at $48 billion.

As K. Sujata, president of the Chicago Foundation for Women, recently pointed out, “We definitely have hard choices to make when facing a $6 billion budget deficit and $111 billion in unfunded pension liabilities. But does the governor think that cutting social services—only a tiny fraction of the budget—is a good way to begin to tackle our state’s financial woes?”

Regardless of how you answer that question, it makes perfect sense that foundations throughout the city and downstate are feeling an extra dose of pressure in light of the approved and proposed public budget cuts. But there’s rarely a direct correlation between an increase in pressure and an increase in assets.

Foundations feel the pressure to do more in this situation, but individual donors can make an even bigger difference. Approximately 80 percent of charitable funding in Illinois comes from individuals. 

The state’s budget crisis isn’t getting resolved anytime soon, and local foundations have already been kicking into higher gear for the causes they support. Yet it’s not enough.

Now is the time for individual donors to either connect with community foundations to channel their resources or personally put the time and effort into understanding where the greatest needs lie. 

To see more insights about the local and regional giving scene, check out the full publication, Giving in Illinois: 2015 Edition