Is Philanthropy’s Pandemic Response Hitting the Mark? Or Making the Usual Mistakes?
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Food Distribution at Central Broward Regional Park in Florida. YES Market Media/shutterstock
In the early and uncertain days of the pandemic, experts, nonprofit leaders and foundation heads created a sort of crowdsourced to-do list of action items philanthropy should take to respond to an exploding global health crisis. Guidance surfaced across blog posts, webinars and other forms of punditry, with some clear common threads emerging.
Foundations needed to open the spigot and accelerate funding to cover emergency losses, provide unrestricted support to allow grantees to think on their feet, focus on low-income and communities of color that are especially vulnerable, reduce administrative and reporting burdens, and help organizations transition to a remote workforce.
Six months later, a new report from the Center for Disaster Philanthropy (CDP) and Candid allows us to assess funders’ progress in addressing at least some of these mandates. The report’s topline finding was that, all told, funders have given an impressive $11.9 billion worldwide in the first half of 2020, blowing away the funding responses to other recent disasters tracked by CDP. The data comes from an analysis of COVID-related gifts from foundations, corporations, high-net-worth donors and selected donor-advised sponsors in 38 countries to recipients in 52 countries.
The report has some limitations. “The level of detail for each award varies dramatically,” write the study’s authors. “Some contain rich descriptions for each recipient, whereas others provide only an overall total without specifying the recipient(s).” For instance, the report states that 85% of funding by institutional donors ($8.9 billion) flowed to “unknown” or “multiple” recipients. “We therefore have little information about most donations and where they are directed,” its authors concluded.
That being said, the study provides us with a baseline, however imperfect, from which we can hold philanthropy accountable to some of the top priorities laid out in the spring. In an effort to put a sharper point on how the sector is doing so far, I thought I’d pull out some of the report’s key conclusions related to three of the top priorities philanthropy was charged with during its pandemic response, add some necessary caveats, and then assign an admittedly subjective letter grade for each.
But first, let’s review some of the study’s high-level findings.
Key Findings: Corporations Lead the Way
Authors pulled data from publicly available sources in English, including press releases, membership reports, surveys and reports directly submitted by funders to Candid as of July 7, 2020. The analysis does not include small-dollar individual giving.
Here’s the breakdown of the $11.9 billion based on funding source:
Corporations/corporate foundations—66% ($7.9 billion)
Independent foundations—14% ($1.7 billion)
High-net-worth individuals—13% ($1.6 billion)
Public charities—3% ($388 million)
Operating foundations—3% ($330 million)
Community foundations—1% ($136 million)
Additional data points include:
Donor-advised funds at Fidelity Charitable, Schwab Charitable, and Vanguard Charitable allocated at least $453 million.
While community foundations gave the least in terms of total dollar amount, they provided 49% of gifts, the most from any category.
Not surprisingly, health-focused organizations received nearly a third of institutional funding.
Jack Dorsey’s $1 billion COVID commitment was the largest gift in the entire dataset. However, at the time of this writing, only $203 million had been disbursed. In addition, his more recent grants address social justice, not COVID-19.
Now that the stage is set, let’s gauge philanthropy’s performance in meeting the following three COVID-response action items.
Action Item #1: Quickly move money out the door—and lots of it
When the pandemic struck, nonprofits asked philanthropy to give like it had never given before. The sector clearly answered the call. Many unlocked tens of millions in emergency funding, while smaller grantmakers blew past 5%-per-year payout provisions. Others found ways to get creative. In June, the Ford, MacArthur and Doris Duke foundations announced they would issue bonds as a way to boost spending.
While institutional philanthropy displayed impressive flexibility in upping its response, it’s important to remember that, according to the study, corporations provided two-thirds of total COVID funding. The top corporate funder, Google, allocated $1.2 billion in total, including the largest single corporate gift in the study’s dataset, a $340 million commitment for Google Ads credits to small and medium-sized businesses. To put this gift in context, it was slightly less than the total given by the study’s most generous institutional funder, the Bill & Melinda Gates Foundation, which gave $355 million in COVID relief. Of course, Google’s gift wasn’t in cash. This, as we’ll soon see, was a problem.
Regardless of the funding source, the data underscores the astonishing scope of philanthropy’s response to the pandemic. Funders’ $11.9 billion in COVID-related support far eclipses the amounts donated to Hurricane Harvey ($343 million), the Australian bush fires ($152 million), and Hurricanes Irma, Maria and Dorian ($127 million, $68 million and $48 million, respectively).
Funders shouldn’t be complacent, however. Commenting on the study, CDP Vice President Regine Webster said, “small community-based organizations, even large multi-state community organizations that are providing wraparound services, a social safety net, they are struggling big time.”
Grade: A
Action Item #2: Pivot to flexible support
Beginning in March, nonprofits implored funders to convert grants to unrestricted general operating support. Again, many—if not most—agreed. The survey notes that to date, more than 775 U.S.-based and international foundations have signed the Council on Foundations’ COVID-19 pledge, which, among other things, calls on funders to “make new grants as unrestricted as possible.”
However, the report found that only 3% of funding to specified recipient organizations “was explicitly described as flexible or unrestricted.”
Google’s $340 million gift underscores how a massive commitment may not be particularly flexible or even impactful. Recipients had to be Google Ads users, and the credits—which, according to CEO Sundar Pichai, sought to “alleviate some of the cost” incurred by small businesses trying to stay in touch with their customers—hit users’ accounts precisely as brick and mortar small businesses began shuttering.
“What companies need is cash,” said Akhtar Badshah, former Google executive and critic of Silicon Valley’s self-serving response to the pandemic, in a Recode article back in March. “They don’t need credits.” (Google.org also provided $15 million in cash grants to nonprofits to provide small businesses with access to capital.)
Similarly, the report states that Mastercard Incorporated announced a five-year, $250 million commitment in financial and in-kind support that includes “financial, technology, product and insight assets.” I suspect a small business owner facing bankruptcy in mid-April didn’t make payroll with “insight assets.”
The CDP/Candid survey found that “some $1.8 billion in funding included an in-kind contribution component,” a particularly inflexible form of philanthropy. It would be a mistake, however, to paint all in-kind donations with a broad brush. For some organizations, they can be just as valuable as cash support. The report noted that the Colgate-Palmolive Company committed $20 million in health and hygiene products to community-based organizations for distribution to vulnerable populations and frontline workers.
Caveat: Funders’ lack of flexibility “likely reflects a lack of detail in the award description,” the study's authors write. “Arguably, awards that reference emergency funds or simply have the description ‘COVID-19 response’ may be for unrestricted support. Therefore, it is unclear how many awards actually met the goal of increased flexibility.” In addition, “funders also allowed current grantees to reallocate their funding to COVID-19 activities, another form of flexibility not reflected in the data set, which largely captured new commitments,” the study states.
Grade: C+
Action Item #3: Provide more support for Black, Indigenous, and people of color (BIPOC)
It became clear from day one that the pandemic was disproportionately hurting communities of color. And yet, the report found that among institutional giving to specified recipients, 5% of total dollars and 12% of awards explicitly identified communities of color or people of color-serving recipients as intended beneficiaries.
Among specified gifts, 3% of awards were earmarked for organizations serving women and girls, 2% for immigrants, refugees and the groups that serve them, and 1% for people with disabilities. The study concluded that most emergency funds were organized by geography, with some focus on specific vulnerable populations, like Borealis Philanthropy's COVID-19 Disability Inclusion Fund.
Caveat: “Some gifts may have been awarded to work serving these communities without naming them specifically,” states the report. Despite this caveat, the lack of explicit support for vulnerable communities compelled CDP President and CEO Patricia McIlreavy to speak up. “As this report shows, BIPOC-led or even BIPOC-serving organizations continue to be underfunded,” she wrote in the study’s introduction. “This trend must be reversed.”
Grade: D-
In the early months of the pandemic, it often seemed like the sector was ultimately getting the message and stepping up to meet the moment. But the CDP/Candid report serves as an important reminder of a phenomenon that all of us working in, reporting on, or relying on philanthropy should always be wary of: Particularly during hyperactive news cycles, it is easy to be wowed by eye-popping figures, high-profile pledges, and outliers that don’t reflect trends on the ground.
There’s a lot to applaud in philanthropy’s response to the COVID-19 pandemic so far, including its sheer size and the many foundations that listened and adapted in the moment. But the highlights shouldn’t overshadow the overblown nature of some corporate gestures, or the ongoing problem areas where the sector has been falling short for decades. Nor should the applause ever drown out accountability regarding how money is being moved, including how much we just don’t know.
Of course, the report only tracks giving through June, just as the nation’s resurgent reckoning with racial justice was taking hold. And there is plenty more opportunity for individuals and institutions to rise to the moment. The study concludes with six suggestions for more effective giving as the pandemic continues to pose ongoing challenges for the nonprofit sector. They include providing unrestricted support, expanding on existing giving, and supporting “local nonprofits and knowledge—in the U.S. and internationally—that focus on communities of color and other vulnerable populations.”
Candid and the Center for Disaster Philanthropy plan to release a follow-up research brief in February 2021.
