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Now Is the Time for Philanthropy to Give More, Not Less

By  Aaron Dorfman and 
Ellen Dorsey
March 19, 2020
0319WallaceDorfman_GettyImages-1148108241web
Getty Images

This week, amid global panic surrounding Covid-19, financial markets took the worst hit of any single day since 1987. Investors and portfolio managers began preparations for austerity and continued belt-tightening as governments grappled to respond to the growing crisis. Both publicly and privately, philanthropy began to wonder whether it should hold off on making grants or liquidating investments.

We will say this plainly: As markets collapse and nonprofits face drastic drops in government and private support, it is no time for philanthropy to think about cutting back. Instead, we must give more. We must give more to address the public-health crisis while continuing to fund existing social and systemic change efforts. There is a real risk that philanthropy will be tempted to cut back on its investments and grant making. After the 2008 market collapse, for example, philanthropic gifts dropped by more than 15 percent. This left $30 billion sitting in private coffers instead of being used to further the public good.

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This week, amid global panic surrounding Covid-19, financial markets took the worst hit of any single day since 1987. Investors and portfolio managers began preparations for austerity and continued belt-tightening as governments grappled to respond to the growing crisis. Both publicly and privately, philanthropy began to wonder whether it should hold off on making grants or liquidating investments.

We will say this plainly: As markets collapse and nonprofits face drastic drops in government and private support, it is no time for philanthropy to think about cutting back. Instead, we must give more. We must give more to address the public-health crisis while continuing to fund existing social and systemic change efforts. There is a real risk that philanthropy will be tempted to cut back on its investments and grant making. After the 2008 market collapse, for example, philanthropic gifts dropped by more than 15 percent. This left $30 billion sitting in private coffers instead of being used to further the public good.

Our tendency in philanthropy has been to continue making the minimum legally required payout instead of thinking first about maximum impact to prevent long-term societal damage. In the midst of this crisis, too many foundations will be tempted to continue that practice — but this moment is both a mandate and an opportunity to fundamentally question that approach. The virus will eventually dissipate, but its effects will be longstanding and will exacerbate the social inequalities we already face.

What’s more, we are already dealing with a number of existential threats that will not evaporate and that will require long-term changes. Philanthropy must use this moment as an opportunity to fundamentally rethink past practices and upend the status quo.

Nonprofits are already facing a drop in donations, and many are increasingly concerned about their ability to pay and support their staff, and have incurred losses from canceled fundraising events and program-related travel. Within nonprofit organizations themselves, most lower-level employees — often the first to be let go when finances get dire — come from marginalized communities themselves.

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A number of foundations have begun announcing plans to give more, many notably altering the terms of their grant making by turning funds earmarked for programs into money for general operating expenses. This is a good start, but others must join them. We simply cannot justify leaving our vast resources — whether they be held in foundations, private investment accounts, or donor-advised funds — on the table this time around. The stakes are too high.

Philanthropy has a particular responsibility to give more to support these organizations given that the last several years have been highly profitable for wealthy donors and philanthropy. These gains — a significant portion of which are ill-gotten gains from the Trump administration’s tax cuts, if we are honest — never reached the middle class, much less the most vulnerable members of society. And today, to add insult to injury, service-industry workers face the lack of paid sick leave, shortened hours or layoffs, and jobs that put their health at risk. Gig-economy mothers are forced to deal with an inability to afford or secure care for their children who are out of school. Immigrant families, many of which are of mixed status, are grappling with the fear of going to the doctor or hospital because of draconian immigration policies that place entire communities in harm’s way.

Given this reality, our increased funding must focus squarely on promoting social justice — and provide immediate support those who have been most negatively (and disproportionately) harmed by the public-health crisis. As well, we must continue supporting existing programs and projects for needed long-term social and systemic change. Philanthropy must give more in unrestricted funding, give strategically to organizations that are filling gaps in the society safety net, and support efforts to undergird the temporary protections put in place for Covid-19 and make them permanent. That is the only way to ensure we are better prepared the next time a pandemic comes along.

One potential silver lining of Covid-19 is that it has revealed broad public support for a government that works for the people. Government officials — including elected officials on both sides of the aisle — are calling for subsidized or free health care, paid sick leave, reduced public travel and consumption, and economic policies that support the working class, not the billionaire elite.

It has also revealed the extent to which governments can take drastic action in response to a public health emergency. After weeks of reduced global travel as a result of quarantines, closures, and government policies, pollution is so much lower that it is noticeable from space. Our actions are, for once, having a brief positive impact on the environment. Can you imagine if we took the same public-health approach to planetary crises like the climate emergency? Philanthropy can and must help governments and activists lead the way as we work to simultaneously address a public-health crisis and the catastrophic risks of climate change.

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This response cannot be a one-off, either. Even beyond Covid-19 responses, philanthropy must double down on its investments in public health, social justice, and economic and environmental justice. We must understand, too, that these investments have far-reaching returns and will help society prepare to address a climate emergency that will likely kill many more people.

It will be a hard fight, but we have both the resources and the capacity. For the world, now is the time to consume less, travel less, and prepare for change. For philanthropy, it is the time to spend more.

We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Foundation GivingFundraising from Individuals
Aaron Dorfman
Aaron Dorfman is CEO of the National Committee for Responsive Philanthropy.
Ellen Dorsey
Ellen Dorsey is executive director of the Wallace Global Fund.

Op-Ed Submission Guidelines

The Chronicle’s Opinion section is designed to spark robust debate about all aspects of the nonprofit world. We welcome submissions that provide new insights and promote innovative thinking about leadership, fundraising, grant-making policy, and more.
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