This blog post originally ran in the Triangle Business Journal, as part of their "A Better World" piece, a monthly column from philanthropic leaders.
After the shock of a crisis wears off and the initial surge of charitable giving dies down, what comes next?
The philanthropic response to the COVID-19 pandemic has been largely positive, with many corporate funders, foundations, and individuals pledging dollars swiftly to rapid response efforts. But as we move into a stabilization phase for nonprofit organizations across the country, it isn’t hard to imagine that with the significant market downturn, there will be an increased and extended need in the years to come.
While we don’t have a crystal ball, and a pandemic event of this nature does not directly compare, funders and donors can use previous data to guide our decision-making in the future. As we’ve seen with this current crisis, we know that people give quickly and with their heart. For example, in a time of sorrow and turmoil, 58% of Americans gave money to 9/11-related causes within a month after the terrorist attacks, and the response was so great that several large organizations issued public statements saying they did not wish to receive more money[i]. And in fact, charitable giving held firm in 2002 despite uneasiness and a slumping economy.[ii]
But we learned in the years following the economic downturn of 2008 that the connection between lost wages, unemployment, and declining investment dollars equaled “one of the largest year-over-year declines in charitable giving since the late 1960s.”[iii] However, what we also learned from the decline was that for some nonprofits, it was short-lived and did not impact everyone. Nonprofits addressing poverty-related and human service causes were often targeted by philanthropists who saw increased need for these programs throughout their communities.[iv]
What can we use from this past data as we look forward to an uncertain future? What is the role of philanthropy?
Funders have a responsibility to look towards the long-term. We must focus on strengthening the sector, so that holistic and collaborative services are able to continue, for the health of our communities, and the increasing number of people who rely on them in times of crisis. Federal dollars are vital to this work, but they will not fill the gap entirely, leaving many organizations unable to fulfill their mission, deliver services, and build their capacity. This will require increased and sustained charitable dollars. It is up to all of us to ensure that these organizations do not meet extinction in the years to come.
Many philanthropic leaders are learning quickly how to pivot and be flexible, lifting restrictions for grantees and working to quickly get grants out the door, so that organizations have funds in real time to continue operations. It is important that we embrace the call for flexibility and trust in our nonprofits, now, and in the future.
But how do we maintain, or even increase funding in a time when so many donors may be struggling themselves, or uncertain of their own investments?
As a community foundation, we certainly understand this uneasiness. We are largely made up of donor-advised funds (DAFs) and have limited unrestricted dollars. And our mission states that we will be a permanent fixture in the region so that we can ensure a thriving Triangle for generations to come. But the unique role community foundations play is to provide expertise, guidance, and opportunities for our donors. We are seeing DAF giving increase, as it always has, in times like this. Our donors have granted out several million dollars in the last two months, and we see that level of giving in other community foundations across the state, and around the country as well. And many of us are collaborating with other corporate funders, foundations, United Way chapters, and individual donors to maximize our flexible grantmaking, coming together to make every drop of unrestricted funding we have available count - for rapid response, stabilization, and recovery efforts - in the months and years ahead.
This pandemic will no doubt have long-term implications, and we must be planning for an increase of innovative funding, rather than passing the economic shock of the crisis along to our nonprofit organizations. We must pivot and change course, and hold to those changes in the future, while we learn from our past.
[i] The Philanthropic Response to 9/11 A Report Prepared for the Ford Foundation https://www.fordfoundation.org/media/1721/2002-philanthropic_response.pdf
[ii] CHARITABLE GIVING HELD FIRM IN 2002, 'GIVING USA' REPORT https://philanthropynewsdigest.org/news/charitable-giving-held-firm-in-2002-giving-usa-report-finds
[iii] Charitable Giving and the Great Recession, Stanford University https://inequality.stanford.edu/sites/default/files/CharitableGiving_fact_sheet.pdf
[iv] What Fundraisers Can Learn From the Great Recession, CCS Fundraising https://ccsfundraising.com/what-fundraisers-can-learn-from-the-great-recession/