The coronavirus pandemic was topic No. 1 in the philanthropic sector this year. Donors stepped up their activity to meet the fallout from the crisis, but some key players demanded that foundations and donor-advised funds do more. A powerhouse in philanthropy took down its shingle after four decades. And some not-so-good news about donors and recipients in the year ahead.
A survey conducted in August by Foundation Source found that 42% of private foundations had increased the dollar amount of their grantmaking since the beginning of the year, and the same percentage expected to do so for the rest of the year. The survey also found that 39% of private foundations had modestly or significantly shifted their mission since the beginning of the year, with 85% citing the effects of the coronavirus, 52% increased need among nonprofits, 32% social justice concerns, 20% high unemployment rates and 17% the struggling economy.
An analysis by the Center for Disaster Philanthropy and Candid found that some $12 billion in philanthropic funding in the first half went to meet immediate critical needs and services arising from the coronavirus pandemic in the U.S. and abroad. At the same time, some troubling trends emerged in the results. Few awards were specifically identified as general support, and only 5% were explicitly designated for vulnerable populations that have been most affected by the pandemic. In addition, public health organizations received 80% of the $476 billion in health funding, whereas mental health organizations got less than 2%.
Closure and Trust
In September, Charles Feeney signed dissolution papers for The Atlantic Philanthropies after 38 years of global philanthropic work. Established in 1982 by the billionaire co-founder of the Duty-Free Shoppers Group, the foundation provided some $8 billion in support through more than 6,500 grants to people and organizations in two dozen countries. The foundation acted anonymously for 15 years until 1997, when Feeney’s name became public upon DFS’ sale to Louis Vuitton Moet Hennessy.
Many commentators this year have remarked on the decline in trust in the nation’s institutions in recent years. The charitable sector is no exception. New research from the Better Business Bureau’s Give.org showed that the importance donors place on trust before giving eroded between December 2017 and August 2020, with the portion of those who place high importance on trust dropping from 73% to 63.6%.
“Charity trust is important because it leads to engagement and giving,” said H. Art Taylor, president and chief executive of Give.org. “Our research shows that individuals who attribute low importance to trust are less likely to donate.”
The Year Ahead
In a chilling note for nonprofit groups, a survey from Eagle Hill Consulting found that 35% of Americans planned to give less to charity in 2021, though this differed by generations. Three in five younger donors said they would either increase their giving or keep it at the same level, while only one in 10 donors 55 and older said they would increase their giving.
Melissa Jezior, president and chief executive officer of Eagle Hill Consulting, said nonprofits may need to recalibrate both whom they ask for support and how they do that so their approach is more personalized and responsive to the specific preferences and values of their stakeholders.
A coalition of foundation and nonprofit leaders is urging the incoming Biden administration to add an emergency charitable stimulus to its “First 100 Days” agenda. Organized by the Institute for Policy Studies, Patriotic Millionaires and the Wallace Global Fund, the coalition has been prodding Congress since May to temporarily double private foundations’ mandatory payout rate to 10% and mandate a 10% payout rate for donor-advised funds, arguing that this would free up an estimated $200 billion in funding for charities affected by the pandemic.
“As Congress works to come to agreement on the size of a new COVID relief package, a straightforward proposal can send $200 billion over the next three years to struggling nonprofits at no cost at all to taxpayers and the Treasury,” the coalition wrote in a memo to the Biden transition team.
— Related on ThinkAdvisor: