Group for Liberal Foundations Closes After Financial Crisis

A financial crisis has forced the National Network of Grantmakers to close, shuttering one of the nonprofit world’s most vocal advocates for liberal and minority causes.

“It is with sadness we announce that the NNG will close its doors and cease operations,” said a message on the organization’s Web site. “We are confident, however, that our colleagues, friends, supporters, and fellow practitioners are willing and able to pick up the baton and move forward with the work that has inspired us.”

The group moved several times in its 27-year history, but most recently was in Minneapolis, where last year it had three staff members. According to its most recent informational tax return, the group raised about $600,000 in 2005.

According to Elsa Vega-Perez, the chairwoman of the group’s Board of Directors, the National Network of Grantmakers was unable to raise enough money from donors or membership fees to remain open during the past year. While she said the association had about 300 members when it shut down, dues were barely able to cover the cost of the group’s annual conference, the last of which was held in Chicago in December.

Indeed, in March the organization posted a desperate plea on its Web site for support.

“Many of you are in the habit of paying your dues just before NNG’s annual conference. However, NNG will not be hosting a national conference this year and we really need your dues NOW!!!” it said. “As NNG leaders, we do not have the life force and financial resources to do this by ourselves.”

The group was also hampered by its own success, said Ms. Vega-Perez. When it began in 1980, the organization was a lone voice encouraging foundations to support social justice and fight problems facing gay people, black people, and other minorities, she said. Today numerous groups with similar missions exist, such as the Funders for Lesbian and Gay Issues and Grantmakers Without Borders. The National Network helped create some of the new organizations, but by doing so, it increased competition for scarce philanthropic dollars, Ms. Vega-Perez said.

The National Network of Grantmakers rose to prominence, and courted controversy, in the late 1990s when it started the “1% More for Democracy” campaign. The effort called upon its members to increase their annual payout rate of net assets by 1 percent above the legally required minimum of 5 percent, on average.

The campaign met with stiff resistance from leaders at large foundations and only a few dozen charitable funds pledged to increase their giving.

Despite the mixed results, Teresa Odendahl, president of the New Mexico Association of Grant Makers, in Santa Fe, who served as executive director of the National Network of Grantmakers from 1993 to 2001, said the organization “spearheaded philanthropic reform.”

“There’s so much more to do,” she said, “but it accomplished a great deal.”