How will COVID-19 change philanthropic giving? It’s still too early to tell two months into the pandemic, but one sign comes from a survey recently released by Exponent Philanthropy.
Exponent, formerly the Association of Small Foundations, is an organization for funders who practice “lean philanthropy,” which it defines as “those who practice philanthropy with little or no staff.” In April, the organization surveyed 900 of its members about how the pandemic had changed their grantmaking and office culture.
Exponent’s members say, by a 79-21 percent margin, that their practices had changed as a result of the pandemic. Nearly half (49.8 percent) say they are increasing their payout, while 32.4 percent say their payout won’t change and 17.8 percent gave another unspecified response.
A majority of Exponent’s members say they have shifted their funding priorities. Just over half (53 percent) say they are giving to “individuals economically affected by COVID-19,” although only 14 percent say they are giving grants to individuals medically affected by the disease. A full 41 percent say they are giving to “nonprofits outside of [their] typical funding portfolio.”
The funders Exponent surveyed largely indicated that their grantmaking had increased and had become more flexible. 73 percent of those surveyed said they had made emergency grants, and an additional 13 percent were considering making these grants. Over 60 percent said they had increased grants to their grantees and had decided to lessen restrictions on grants, such as turning grants for a particular project into general operating grants. Between 45 percent and 55 percent said they had expanded the range of grants outside of their traditional ones, given grants to organizations that helped support people affected by COVID-19, and contributed to local relief funds. Fifty-six percent of respondents are delaying or canceling reporting deadlines.
Exponent’s members also said they had changed the way they did business. Virtual meetings were now common, as 71 percent of those surveyed said they held virtual board meetings, 59 percent said they held virtual staff meetings and virtual meetings with grantees. Sixty-six percent said they had closed their offices and everyone was working remotely. Fifty-five percent said they had postponed or suspended site visits.
Here’s the big question: Will these changes be permanent? My guess is that remote work will be increasingly common, but I can’t imagine that remote working will completely control a future foundation office. In-person meetings provide information that simply can’t be gained through virtual meetings.
I especially hope the COVID-19 crisis does not mean a permanent end to site visits, because donors can’t get an accurate picture of how their money is used from a report or a teleconference. Site visits are particularly important for aid that helps the poor, because many poverty-fighting organizations can’t afford the tools and resources—even high-speed internet for virtual meetings—to present themselves well over a teleconference. Sharing their work in person is crucial to gaining the trust and interest of funders.
The Exponent Philanthropy survey shows that many lean philanthropists are responding to the COVID-19 crisis with flexibility and dynamism. That is, overall, a healthy development. Far too many foundations, particularly those endowed in perpetuity, become sluggish, more concerned about preserving their endowments than in putting their money to work where it would do the most good.
Foundations, particularly perpetual ones in middle age or old age, can use COVID-19 as a way to clear away the cobwebs. But in doing so, they shouldn’t abandon time-honored general commitments, particularly if their spending reflects their founders’ vision. For example, Bill Gates has announced that the primary task of the Bill and Melinda Gates Foundation will be to fight COVID-19. As the Gates Foundation’s creator, Bill Gates is entitled to spend his money for he wants. But I hope that as his foundation changes, the Gates Foundation’s long-standing commitment to battling malaria and other diseases is not curbed or eliminated.
Foundations need to balance the need to be dynamic with the principle that “when it is not necessary to change, it is necessary not to change.” The COVID-19 pandemic will be good for foundations if it encourages rethinking about what their organizations ought to fund but bad if it means that in 2025 the primary commitment of most foundations, including ones formerly concerned with funding the arts or fighting poverty, is supporting spending on public health research.