Covid-19 is forcing foundations to change the way they work, with many increasing their payout, embracing looser grant restrictions, and reducing “what is asked of grantees,” according to a report released Thursday from the Center for Effective Philanthropy.
The report is the first in a series of three that examine how foundations are responding to the pandemic in their grant making.
The report frames its questions and conclusions around the Council on Foundation’s “call to action” pledge, released in March, that pushed foundations to change how they approach their grant making amid the coronavirus pandemic. The pledge called on foundations to implement eight changes in their grant making, including loosening restrictions on current grants, increasing unrestricted grant making, and reducing reporting requirements. Since its release, nearly 800 foundations have signed on to the pledge.
The survey sought responses from more than 800 foundations in August. Of those, 236 foundations responded, including 66 groups that had not signed the pledge. The report was augmented with interviews from 41 foundation leaders whose groups had signed the “call to action” pledge. The survey asked which provisions of the pledge have or have not been implemented, as well as which provisions foundations already had in place before the pandemic.
Since the pandemic began, 66 percent of foundations surveyed have begun loosening or eliminating restrictions on existing grants, 64 percent were reducing what they asked of grantees, 57 percent were making new grants as unrestricted as possible, and 52 percent had contributed to an emergency fund.
Ellie Bureau, vice president for research for the Center for Effective Philanthropy, said the survey shows just how much foundations can pivot their operations and raises the question of why it took a crisis for these to be implemented.
“Foundations could make the changes much more easily than perhaps they had anticipated,” said Buteau. “There were some elements in this research where we asked what were some of the challenges they ran into, and many of them didn’t have many to share. I’m just not sure the motivation and urgency had been there before.”
Buteau said the results of the study don’t have a margin of error because it was a research survey and not a poll.
Meeting the Pledge
While most of the respondents had either implemented the pledge’s eight principles before the pandemic or have done so since, one principle stood out for being the least likely to be implemented by the respondents — “supporting grantees’ advocacy, which had been implemented by all but 31 percent of foundations.”
Jeanné Lewis, vice president at the National Committee for Responsive Philanthropy, said the report underscores an ongoing need for more data from foundations about how they are responding to the pandemic.
“The conversations I’ve been involved in point to the need for better, more accurate, quantitative data about actual funding shifts,” said Lewis. “One challenge we saw with the pledge was that funders could sign on to the whole thing, and it wasn’t clear if they were agreeing to one of the items or agreeing to do all of the items.”
Foundations could make the changes much more easily than perhaps they had anticipated.
The report also asked if, and by how much, foundations were increasing their grant-making budgets. Among groups that had reached a decision in this area, 72 percent said they “had or will increase grant making in 2020 beyond what was previously budgeted for the year.”
Of those, 41 percent said they would increase their grant making budgets by 10 percent or less, 18 percent said they would increase it by 11 to 20 percent, and 12 percent said they would nearly double their grant making budgets, increasing grant making by 91 to 100 percent.
Buteau said the next two reports of this research series will be released in December. The second report will focus on how foundations are making changes to focus on diversity and racial-equity goals. The third report will provide a more in-depth examination of changes in foundation grant-making practices.
