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As many foundations reduce giving to charities, McAuley Ministries is helping nurse them to life.

"In the current economic climate, foundations are seeing their asset bases shrinking and the size of their annual grants tends to shrink with that," said Scott B. Leff, associate executive director of the Bayer Center for Nonprofit Management. "As a result, there's special value to our nonprofit sector having a new foundation appear to fill in some of that gap."

Born last year from the sale of Mercy Hospital to the University of Pittsburgh Medical Center, McAuley Ministries is targeting the neighborhoods of Oakland, West Oakland and the Hill District with money for health and wellness, education and community development.

"We see it as continuing to serve the neighborhoods served by Mercy Hospital, but now in new way, in a way that addresses new problems with resources made available from the sale of the hospital," said Sister Patricia McCann, vice chairwoman of the McAuley Ministries' board of directors.

"In a way, it's a blessing that the funds have become available right at this time, because now is when the needs are great," she said.

The foundation is named for Catherine McAuley, caretaker of Catherine and William Callahan, a wealthy Quaker couple in Dublin. When he died in 1822, he left his estate, now worth about $1 million, to McAuley.

She later founded the Sisters of Mercy, the religious order that established Carlow University, and dedicated her life to serving the sick, the poor and the imprisoned. She is considered by the Roman Catholic Church as venerable, the first step toward sainthood.

The foundation is run by the Sisters of Mercy and located on Carlow's Oakland campus.

McAuley officials say the development of a new arena in the Hill District and improvements Uptown, such as the new recreation center built by Duquesne University, signal rebirth.

"We've come into existence at a time of tremendous change and opportunity in those neighborhoods," said Michele Cooper, executive director of McAuley Ministries.

Because the foundation is targeting three neighborhoods, it has a chance to magnify its impact, Leff said.

"From those communities' perspective, it should have a multiplier effect so that the resulting impact makes it equivalent to a much larger foundation that might be spreading its giving over a broader region," he said.

Since first giving away money in December, the biggest grant has been $500,000 to the YMCA of Greater Pittsburgh. That money will create a "vegetative roof" to help teach children about environmental friendly buildings.

"They see that community as their own community," said Eric Mann, president and CEO of the local YMCA. "Therefore, they want to see it continue to survive and keep kids and families healthier."

Another potential beneficiary of McAuley Ministries is Bethlehem Haven of Pittsburgh. That nonprofit group provides housing to homeless women and their children.

The group's case managers had been doing two jobs — finding housing while meeting the women's other needs. That led to homeless women spending up to two months in shelters and two years in temporary housing.

A housing specialist should reduce that time to six or nine months, said Lois Mufuka Martin, executive director of Bethlehem Haven.

"We need a faster way to take people out of our shelter and transitional housing into permanent stable housing," she said.