When the stock market drops by more than 500 points as it did yesterday, it is not only bad for the many companies who lost value, it is also bad for the endowments of the foundations that fund many of our grant recipients at Share Our Strength. During the last market turndown, foundations ranging from Annie E. Casey to the Bill and Melinda Gates Foundation saw their endowments shrink by double digit percentages.
The fragility of our economy underscores the need for nonprofits to diversify their revenues, and to not be completely dependent on traditional philanthropic giving.
The conventional wisdom was that if Congress did not agree to a debt ceiling deal the markets would react negatively. Despite everyone’s unhappiness with the substance, there was relief and self-congratulation on Capitol Hill when the deal was reached.
So why did the markets react so negatively anyway? Unfortunately it did not occur to the politicians who are so acclimated to political spin, that achieving a deal in name only, especially one that kicked down the road the tough decisions to yet another commission, would not be enough to reassure investors whose livelihoods are at stake.
It’s also a deal that threatens to tear at some of the basic fabric of American society: programs like WIC, Medicaid, the military while it is fighting two wars, and the unknown of potential across the board cuts in all government agencies. Our political system is failing to create either community or wealth. But putting them together, by aspiring to create community wealth as we do at CWV and Share Our Strength, may be the best way forward for our nation.