Everyone is wondering how donors will respond to the economic downturn. Here are some recommendations for donors—we need you to help keep nonprofits and civil society strong.
I won’t lie. I’m a little worried about the impact of all this chaos and uncertainty on the nonprofit sector, perhaps even on your grantees. With COVID-19 shutting down local economies and hitting many employers hard—not to mention the dive in the stock market—it’s only a matter of time before we start to feel the impact of widespread job loss.
It’s not too difficult a leap to imagine that many people will be feeling less generous—and nonprofits that rely on donor support may suffer because of it. That’s especially true for organizations (like churches) that rely on weekly collections or program-based revenue and (now canceled) events for much of their income.
But the fact is that our nonprofits matter more than ever right now. There are isolated seniors to care for. Families to feed. Souls to minister to. Violence to prevent. Children to teach. Leaders to advise.
We started Philanthropy Daily because we care about civil society, and about strengthening the institutions that are so vital to its flourishing. I know that’s a cause that’s near and dear to many of you, too. We’ve talked with many, many nonprofit leaders in the past week and they’ve got a lot on their minds. Are their donors going to abandon them? Are they going to be able to adapt quickly enough to keep themselves afloat?
As a donor, you’re probably thinking a lot about how you can make a difference right now for the organizations, people, and causes you care about. First as a foundation officer for a major foundation and now as a partner at American Philanthropic, I’ve worked with dozens of donors and hundreds of nonprofits.
I’ve been thinking about how donors can best support nonprofits right now. I wanted to share a few ideas with you based on what we’re hearing:
- Stay the course. If you’re able, continue to give to the causes that you care about. They need your support, but they also need your encouragement right now. That’s true not just of your local institutions, but of more cerebral causes like policy shops too. Who knows—they might have some incredible opportunities to take advantage of in the coming months. When healthcare, education, and government monopolies collapse, there’s appetite and need for change and we’ll need all the good ideas we can get.
- Stay in touch and reassure. Your nonprofit leaders are fearful that they’ll face huge budget shortfalls at the end of the year. If you’re able, reassure the organizations you support that you remain committed to them and their success right now (even if you plan to give later in the year) so they can have some peace of mind. And if things change on your end, such as your giving budget, board meeting dates, application deadlines, or other practicalities, let them know so they can plan accordingly. Don’t make them read your mind.
- Minimize the paperwork. Your grantees have a lot on their plates right now. They’re worried about their programs, the people they serve, their employees, and how to keep the lights on. Many are doing their best to work from home with no childcare (and perhaps you are too!). Now is not the time to drown them in bureaucracy. Give the people you trust the money and reassurance they need with as little hassle as possible.
- Look home. Consider giving emergency funding within your community to help those who are (or will be) on the front lines of dealing with the fallout from this disaster. Support your local soup kitchen, health clinic, churches, schools, and other civil-society institutions. They may not be the one out asking for money right now because they’re scrambling so hard to catch up—but they’re the ones that will be doing the most in the coming months.
- Get creative and be generous. Your foundation exists to realize a vision, to improve the world in some way. Now is not the time to be penny-pinching with your endowment. Despite our best efforts, we can reasonably expect to see a shrinking in charitable giving this year. Your first job is to avoid being part of the problem—don’t withhold your own giving. But you can also be part of the solution: consider going even farther and dipping into your corpus this year to fight against a shrinking nonprofit sector. This, I think, would be in your best interest in terms of advancing your mission and realizing your goals as a grantmaking organization. There are likely ancillary benefits, too: political pressure to tax endowments is on the horizon (look at universities under the new tax law), but if more foundations demonstrate that they aren’t beholden to a 5% distribution maximum, we might be able to stave off that pressure a little longer. Or if you're holding money in a donor-advised fund, now is a great time to tap into that. That money is already donated—the trick is just getting it where it can be of great value to nonprofits.
- Help them in other ways. Many nonprofit leaders right now are upset and confused, unsure where to turn. In addition to giving them support and encouragement, you could help share their work with other donors, and encourage your peers to stay the course in their giving as well. You could also consider helping them access quality advice and capacity-building services in areas such as marketing and fundraising to help them pull through in this time of need. We launched a weekly webinar as one way to support nonprofit leaders. If you think your grantees would like to join, please feel free to pass this information along. We’d also be happy to talk with you about how we can partner with you to help the organizations you support more directly through risk assessment, focused consulting, and some good old-fashioned elbow grease. Making smart investments now can help the organizations you care about mitigate longer-term losses and grow their ability to weather future crises.
Whether you give a lot or a little right now, you have an opportunity right now to be of material service to the people and causes you care about. Take advantage of it.
Lastly: we’d love to hear from you so we can share your good ideas with other funders. What are you doing right now to help your grantees? How is this pandemic affecting your giving? If you’re major donor or foundation representative, please share in the comments below or by email.
For the next several weeks, Philanthropy Daily will be a resource for fundraisers in the midst of the COVID-19 pandemic. Check back daily for new articles addressing news about coronavirus and philanthropy and providing strategic and practical recommendations for weathering this storm as a fundraiser.
And please join us on Thursday afternoons at 2:00 eastern time for a webinar on “Fundraising During Uncertain Times.” American Philanthropic leadership and Philanthropy Daily authors are hosting a weekly webinar to discuss the impact of the pandemic on fundraising and to answer your questions. Sign up here.