February 17, 2014; Philadelphia Inquirer
While many foundations have in recent years been forced to reevaluate funding priorities and scale back programs owing to the recession’s impact on endowments, one long-running charity in Philadelphia found itself making changes for another reason: Its original mission had essentially become obsolete.
The Merchants Fund was founded in 1854 to provide financial assistance to indigent merchants, retired merchants, and spouses of deceased merchants. For more than 150 years, the foundation continued to help Philadelphians from the small-business community who had fallen on hard times, even as government support and social services expanded during the twentieth century. Seven years ago, the directors of the Merchants Fund realized it was time to reconsider their mission. They hired Patricia Blakely to make “most purposeful in the 21st century” the still-considerable resources of the charity.
The result? A new focus on making grants to the city’s small businesses and commercial corridors, grants intended to help owners and developers invest in new technologies or accelerate growth, often creating jobs along the way. Since the Merchants Fund decided to redirect its resources, the organization has provided $1.5 million to 243 businesses, with most grants capped at $10,000. As reported in The Inquirer, grantees have included “a dog groomer, a movie theater, a laundry service, a bakery, a trophy shop, a fashion truck and a custom bookmaker.”
Executive Director Blakely estimates that all but about ten of the grants have been successful to date. She says, “We’re meeting that unmet need, that thing that can change the way they do business.” Like allowing Wash Cycle Laundry, a cleaning service that provides pickup and delivery by bicycle, to invest in electric-assist cargo tricycles to reach hillier neighborhoods. Or replacing the 50-year-old walk-in freezer and refrigerator at Swiss Haus Bakery, which reduced the electric bill by about 60 percent, allowing the business to invest in other areas that will fuel growth.
The shift in giving at Merchants Fund grew out of the waning need for the charity’s original purpose (although about 20 legacy clients still receive support), but the shift happened just as the economy collapsed, when banks were less able to gamble on loans to small businesses. Of course, the Merchants Fund experienced considerable investment losses during the recession, too, which limited the grant funds available during the first years of the new giving model.
In 2014, with an endowment of $15 million, the Merchants Fund expects to make grants totaling about $500,000.
Do you work for or know of a foundation that has refreshed its mission because it was no longer relevant? NPQ would welcome other examples of grantmakers hitting the “reset” button.—Eileen Cunniffe