How philanthropic giving has shifted amid COVID
The COVID-19 pandemic and its resulting variants have changed our behavior about … well, almost everything, it seems. It also seems at times like we really never get back to “normal,” even as our concept of normal continues to change. No sector in our society has been untouched by the pandemic’s effects, and that most certainly includes the nonprofit sector and its donors.
Individual Giving
Early on in the pandemic, Fidelity Charitable conducted a survey of philanthropic individuals to get a reading on their thoughts about philanthropy in response to the pandemic and how the situation could affect their giving and volunteering behaviors. The survey showed that most donors planned to maintain or even increase the amount they were going to donate to charity that year. Younger generations notably planned to step up their donations – 46 percent of Millennials said that they would give more in response to the pandemic, compared to 14 percent of Baby Boomers and 25 percent of Gen X.
The good news is that the survey’s responses held true. Most American donors maintained their charitable giving, while corporations responded with increased giving and multiyear pledges, as a report from the Indiana University Lilly Family School of Philanthropy finds. The report, Understanding Philanthropy in Times of Crisis: The role of Giving Back During COVID-19, found that that the share of individuals reporting that they gave to charitable organizations, individuals, or businesses increased between four percentage points and six percentage points between May and September 2020. End-of-year giving made up a larger portion of individual giving than in the previous two years, with 64 percent of annual giving occurring in December 2020, compared with 58 percent and 56 percent in 2018 and 2019.
The even better news is that giving in 2022 is predicted to be strong in 2022 because the stock market is expected to keep growing, according to “Trends that Will Shape Philanthropy in 2022,” Dec. 16, 2021, in Giving USA. Another positive indicator is GivingTuesday 2021 in November 2021, which raised $2.7 billion – a six percent increase over 2020. The number of donors also rose – up six percent over last year’s already high numbers.
“Donations to Advised Funds and other funds at the foundation continued at a robust level,” John Zell, vice president of development for the Community Foundation for Northeast Florida said about 2021 giving. “Many donors took advantage of appreciated stock gifts, as a result of record high equity markets pricing. We also helped donors to utilize the 100% of AGI tax deduction for gifts of cash by establishing designated funds to benefit a single organization in perpetuity.”
Jessica Browning, principal and EVP at Winkler Group, who penned the Giving USA article, predicts an increased interest in endowments, a philanthropic funding tool that traditionally has been an afterthought for most donors. The pandemic has impressed on them the perilous financial position in which the organizations which they most want to support find themselves in the midst of crises, and they want to ensure that their favorite causes can weather the next one.
Foundation Giving
Foundations have stepped up to address the pandemic in major ways. From the launch of community-based rapid-response funds to the development of diagnostics and vaccines, they have helped to address both immediate, crisis needs and address the inequities the crisis has unsurfaced over the long term. COVID-19 has accelerated moves to relax grant requirements, speed up decision making, and give recipients additional flexibility in how they use funds. According to the Council on Foundations, almost 750 foundations have signed a public pledge to streamline grant-making processes, and individual donors are partnering with their peers to make sizable grants with less paperwork.
Five practices have emerged in foundation giving during the pandemic that are worth building on into the future. First, many foundations have reduced the burden that nonprofits have faced in applying for funding. Second, foundations have accelerated the pace and volume of giving. Third, many have partnered with other donors to go further faster. Fourth, foundations are investing more in local communities by supporting partners that understand and have roots in the community and specifically to support nonprofits that are led by people of color. Fifth, foundations are moving to support the public sector by providing risk capital to support new government initiatives, cross-agency work to solve underlying problems and government organizations that train leaders and attract top talent.
“The Community Foundation responded to the impact of COVID-19 on nonprofit organizations in a number of ways,” said Kathleen Shaw, vice president of programs for the Jacksonville-based foundation. “This included relaxing reporting criteria, changing objectives in the grants, extending deadlines and even converting grants meant for specific programs into general operating support.” The foundation also worked in collaboration with other funders to provide additional funding opportunities for nonprofits – both those meeting basic human needs and also cultural institutions.
“Longer term the foundation has revised our Discretionary Grant process to a more streamlined approach requiring less time to apply for a grant, and we have also created new opportunities that specifically support smaller nonprofits providing very important support in our community,” Shaw said.
One creative idea that has emerged from the pandemic is that of a common application for grant seekers, similar to the Common App platform that enables students to apply to many colleges using a single application. There could be a central clearinghouse with data-collection tools that nonprofits could use to share information with any donor, thus eliminating the burden of bespoke application forms and different data-reporting requirements. The platform could also store each organizations’ grant-approval history, as well the reviews of those grants. It could even spur donors to adopt a shared calendar of application and decision deadlines, allowing nonprofits to plan their annual budgets.
“Grants from Donor Advised Funds continued to be strong in 2021. We saw donors supporting organizations that were important to them and those doing relief work connected to the pandemic,” Zell said. “Most grants were for unrestricted, general operating support, giving organizations maximum flexibility to use grant dollars in the ways most needed to strengthen the organization and its work in the community.”
By Karen Rieley
Resident Community News
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