The Open Society Foundations has budgeted $130 million to soften the economic blow of the coronavirus and confront the threat of authoritarian responses to the pandemic by nations around the world.
Some of the response, such as $20 million allocated to New York City for a new Immigrant Emergency Relief Program, or $2 million set aside for the National Domestic Workers Alliance’s Coronavirus Care Fund, will provide direct payments to people whose livelihoods are in jeopardy or who are excluded from federal emergency payments.
“We’re making a slight departure from our traditional grant making to have an immediate focus on humanitarian support, because that’s appropriate given the enormous scale of the challenge before us.” said Patrick Gaspard, Open Society’s president, in an interview.
Gaspard said a second phase of the response would be in line with Open Society’s longtime approach of supporting movements that push for policy changes that support society’s most vulnerable. Gaspard will help oversee such efforts in New York City, as part the Fair Recovery Task Force, an advisory group established by Mayor Bill de Blasio. Maria Torres-Springer, vice president for U.S. Programs at the Ford Foundation, was also named to the group. Open Society’s response fund also will be used to challenge leaders who would exploit the pandemic to limit political freedoms and curtail access to information.
Payout Debate
Open Society’s response comes as calls increase for foundations to take money from their endowments, which are often invested to ensure a philanthropy exists in perpetuity.
A group of nine philanthropy organizations in early April called on grant makers to push money out the door, even if it means jeopardizing the life span of their endowment. The call for increased payout has poured gasoline on a slow-burning debate in philanthropy: Should endowed foundations gush money out to grantees when times are tough, even if it means selling off assets when their value has plummeted, or should they maintain relatively consistent grant budgets so later endowment investment returns can help solve societal problems in years to come?
Vu Le, a nonprofit advocate who writes on his Nonprofit AF blog, comes down squarely in the pay-out-more camp.
Following Open Society’s announcement, Le published a post that castigated foundations for “hunkering down” on their endowments in a time of great need.
“There are hundreds of billions of dollars in endowments just sitting there because philanthropy has been continuously saving for a rainy day,” he wrote. “Today is that rainy day.”
Citing an anonymous source, Le said that Open Society will come up with the $130 million by asking program officers throughout the sprawling global philanthropy to kick back up to half of their program budgets to support the response fund.
The post sarcastically calls on readers to contact Open Society Foundations directly.
“Thank them effusively for standing with grantees at this time by releasing new funds and not doing something so horrific and unbelievably appalling as asking their staff to cut existing funds that are supporting so many organizations in crisis,” Le wrote.
Claim Rebutted
Open Society was founded by investor George Soros and last year reported a $20.5 billion endowment. This year it budgeted for about $1.2 billion in spending, including about $278 million in expenses related to operations.
Gaspard said Le’s claim that Open Society directed program officers to attempt to return up to half of their budgets to create the fund was false. Open Society, he said, will honor all its commitments for the current year and will maintain the multiyear commitments already entered into. Gaspard also said grantees have been given increased flexibility to steer money they’ve received for specific projects to their general operating budgets.
The money for the $130 million response fund was previously unallocated, Gaspard said.
However, Gaspard said the foundation was going through “difficult decisions” about how to reallocate resources. There are certain activities that were planned for the year that can no longer take place, and money that went to support those projects could be steered elsewhere.
“There are many aspirations we and our partners had that would require public assembly, that would require convenings of individuals around the globe, or would require strategic litigation in courthouses that are now shuttered,” he said. “So we’re thinking creatively with our program officers and our staff leaders about how we can reallocate and repurpose some of those funds that can’t be used in the way we had anticipated.”
Gaspard noted that Open Society already makes grants that exceed the federal mandate that foundations pay out at least 5 percent of their assets each year. Mulling over whether to dig into its endowment to support a bigger grant budget, Gaspard said the Open Society board decided to “work within our means” during a period of market volatility in which the value of foundation assets has tumbled.
There will be plenty of uses for grants in the future, Gaspard said, beyond the initial health and economic fallout of the pandemic. Open Society, he said, wants to be well positioned to contend with an expected rise in authoritarian tendencies around the world.
“We’re working to thoughtfully respond not just to the wave that’s in front of us,” he said. “We’re attempting to anticipate the tsunami that’s coming.”
