With the Ax Starting to Fall at MacArthur, Housing Takes a Hit

On Twitter, lots of folks in the nonprofit sector are passing on the news of the end of MacArthur's work in studying and building affordable housing. There is very little commentary, yet. It seems like people just don't know what to say.

The article in the Chicago Tribunethe only article available online about the announcement so farreads like a grim obituary, sharing the highlights of MacArthur's investments in housing initiatives, and quoting housing leaders who are already feeling the pain as MacArthur bows out. Other leaders pay tribute to MacArthur's housing work and recall a lot of big things could not have happened without the foundation's support.

Of course, housing is compelling work, says newly appointed president Julia Stasch. It's just not work that MacArthur will be doing anymore. Stasch explained that the foundation has been "challenged to say, 'Are we doing too much across our entire portfolio?'" She cites the decision to end housing work as a "tough" one, but notes that "no initiative in any foundation lasts forever."

In a way, this is not so surprising. Recently, in discussing the new appointment of Julie Stasch to lead MacArthur, we argued that MacArthur was trying to do too much and that Stasch would like to consolidate grantmaking:

How bad is MacArthur's overstretch? Bad. The foundation currently lists 18 programs on its website, with various special projects and research networks on top of that. In 2013, it sliced and diced a $228.4 million grantmaking budget across its many priorities by making 556 grantsnone of which were over $5 million and many of which were more modest program grants. A study looking at Mac's 2011 grants found that just 20 percent took the form of general support. 

Kudos to Stasch for moving swiftly to make difficult choices that allow the foundation to focus in more depth on fewer initiatives and, ultimately, have more impact. Let's hope other overstretched foundations will find inspiration. 


On the other hand, there is no doubt that Mac's housing work will be missed, particularly in Chicago, and we can't help but wonder whether this was the right place to swing the ax. With new construction still recovering from the Great Recession and more than a quarter of families spending half their income on rent, we need more philanthropy for housing, not less. Julia Stasch hopes other funders will be willing to pick up the work that MacArthur is ending. So do we. 

There's a "Nixon Goes to China" irony about the fact that it's Stasch who's whacking Mac's housing work, since it's an issue she's closely associated with. Remember, she was once commissioner of Chicago's Department of Housing, where she led a huge push for more affordable housing. The internal message here, maybe, is this: If I can slaughter my sacred cow, you can slaughter yours. As we said in our last piece on Stasch, she's a savvy operatorwhich is a must for streamlining a big legacy foundation. 

Stasch sees funders working on employment and income issues as a good fit to take on the housing work, since sustainable housing depends on the people being able to support themselves financially. Whether these funders will want to extend their focus and their portfolios to incorporate the complicated work of housing philanthropy remains to be seen. 

Meanwhile, there is growing excitement about the role that market-based solutions can play in solving the housing crisis. While mainstream private investors have often shied away from bankrolling affordable housingdue to low returns, the fast rise of impact investing is potentially a game changer. MacArthur has shown leadership in that area, and we wonder whether any of its housing impact investments will continue, even as grantmaking winds down.

Related - How Many Birds Can MacArthur Kill With One Impact Investment?

We also wonder whether Stasch thinks she has a crystal ball, and sees traditional philanthropy easing out of the housing field as impact investing scales up. The question of which problems funders should try to solve is very much in flux right now, and housing is one place where things are topsy-turvy. Swinging the ax at housing may look random, but maybe Mac's high command has a grand theory about philanthropy's evolving role that they're not sharing just yet. 

We've reached out to the foundation to learn more about this big change: what's behind it and what it means for grantseekers. We'll update this piece when more details come in.