One of humanity’s most stunning achievements is that we have lifted so many people out of poverty. Indeed, for the first time in human history, the proportion of people living in extreme poverty has fallen to less than 10 percent of the world population. But the gains we’ve made against the indignity of poverty could be wiped out — and hunger and inequality could worsen drastically — unless we act fast to stem the economic fallout from the coronavirus pandemic. Alongside action by business and governments, big philanthropy and people of both ordinary and extraordinary means have a crucial part to play in averting calamity.
The Covid-19 pandemic is a black-swan event — an unexpected event with severe consequences. Even if we are optimistic about curbing the public-health threat over time, particularly given the underlying economic tenuousness exposed and exacerbated by this crisis, the pandemic stands to produce sudden misery and human suffering at unprecedented scale.
Projections by the International Monetary Fund and the World Bank suggest that a failed pandemic response could result in half the world population of 7.8 billion people soon living in poverty.
Philanthropy’s Moment
Already, people are giving to people, immediately and directly. Stories of people helping people abound.
Meanwhile, despite market volatility, an end-of-March survey found that 30 percent of individual donors expected to give more this year than they did last year in formal charitable giving. Nevertheless, nearly 90 percent of nonprofits in a recent survey said they were concerned about remaining financially stable through the end of the year.
But with unemployment climbing, markets remaining volatile, and the global economy entering a recession, we might reasonably ask who is able to give at a time like this?
Will the Ultrawealthy Give?
Forbes reported that the 2,095 billionaires globally — even accounting for market downturns through mid-March — have fortunes that total $8 trillion. Roughly one in 10 billionaires have announced a commitment to give away at least half of their wealth during their lifetime or upon their death.
Foundations worldwide have assets of $1.5 trillion. Meanwhile, the 400 wealthiest American individuals had wealth pegged by Forbes at worth nearly $3 trillion in 2018 — twice the amount held by foundations globally.
Critics rightly will say that deciding to give away wealth doesn’t obviate injustice in amassing it. A degree of skepticism is warranted when billionaires purport to want to do good with their giving.
But here we are, and those who have amassed vast fortunes surely have a part to play alongside the rest of us. We are all in this together. Even if by just staying home for a time, each of us is needed. Even big philanthropy. Even billionaires. Given that astronomical fortunes exist, and many with extreme wealth already plan to allocate some portion of it to philanthropy, what better time than now?
What Individuals With Wealth Can Do
We are starting to see signs that the wealthiest individuals will rise to the occasion. Inaudibly to most of us, some wealthy individuals have been using their stature and affinity with peers to encourage giving. True leadership is each of us doing what we can. In the face of this seismic pandemic, nothing less is asked of each of us. We need everyone.
Those with immense wealth can stave off enormous suffering and play a part in charting the course toward a more resilient future.
Below are some of the steps that today’s billionaires and other wealthy individuals can take.
Give cash directly to people who need it, and support efforts that focus on direct cash transfers.
People are hurting all over the world, and they need cash now. In the United States, more than 10 percent of the $2.3 trillion CARES Act relief package was designated for direct payments to American households. In April, the government of Bangladesh announced that it would send cash to its poorest people via mobile phones.
When the world’s poor run out of cash, not only might they be pushed into abject poverty, but we could see an explosion of other humanitarian crises from starvation to increased child trafficking and mass migration. This is the time to support efforts of direct cash transfer.
People of even modest means are offering to send cash to folks who need it via PayPal, Venmo, or CashApp. So, too, philanthropist and former Apple and Microsoft executive Mike Murray urged, “If you have [it], share it . . . $100 . . . $10,000. Just do it. Now.”
GiveDirectly, a global charitable organization that has delivered $150 million in direct cash transfers to people over the last decade, launched a response fund that reports more than $3.5 million in donations as of mid-April 2020. Give to it or adapt its model.
Special funds have been created to help specific types of adversely affected works, such as the Plate Fund in Seattle, set up by the Schultz Family Foundation in partnership with area nonprofits, to help individual restaurant workers with a one-time cash grant of $500. Such efforts to help restaurant workers alone are already underway across the country and could be adapted for other populations as well.
Funds and efforts such as these in different parts of the world can deliver much-needed cash to those hurting most. New funds could be created in all parts of the world to take donations and transfer cash to those who have been economically hurt or dislocated. This stands to help the most vulnerable and pumps cash into the economy.
Give now to nonprofits working locally and around the world.
Provide gifts of cash that are unrestricted. Enable them to weather the short-term loss of revenue from canceled fundraising events, lost income from suspended services, and other factors that now pose an existential threat to a vital element of our economy and social fabric.
Nonprofits often are on the front lines of providing the needed services to the poor or are working in other ways on behalf of their interests. Some nonprofits are pivoting amid the pandemic to serve emerging needs. Many of these groups have been serving the hardest-to-reach communities with sophisticated delivery systems.
Nonprofits are also employers, so if they are forced to fold, it also increases the number of individuals made unemployed as a result of the pandemic. American nonprofits account for 10 percent of the gross domestic product and employ 12 million workers. We are hearing from many nonprofits around the world that they need six months of support. As one wrote in an appeal, “It has become critical to raise donations to survive this period, pay pruned salaries, [and] cut other costs . . . otherwise, all our efforts over so many years will go to waste.” If we can save even just 70 percent of nonprofits from extinction, perhaps we can ensure the civil-society safety net that has taken decades to build does not collapse.
Give to the organizations that you have supported.
Build them up so they can survive the economic downturn and continue with their work. If you have additional capacity:
- Note that it may be that smaller organizations without ultrawealthy benefactors already in their camp who face acute distress.
- Recognize what can be achieved through policy advocacy in arenas including public health and economic health. Appreciate what can be accomplished through advocacy on behalf of nonprofits, as demonstrated by successful coalition work to ensure nonprofits’ interests were represented in the recent federal relief bill.
- Consider organizations working to draw out the best of business and the future of capitalism with support from individuals and foundations who saw addressing inequality as a priority even before the pandemic hit.
- Reflect not only on what reduces suffering but also on what is balm to the soul. What are the forms of shared beauty that have the power to refresh, unite, and transcend — connecting us with a sense of being part of something larger?
Listen to those asking for help and inviting your partnership. Ask what issues you care about most, but also ask what the world most needs. Give to organizations positioned to have an impact in those arenas.
Give more and give faster.
Draw down your DAF. Transfer more to your philanthropically focused limited liability corporation or private foundation. Bypass traditional giving vehicles, and make larger gifts directly to operating charities doing vital work. Contribute to relief funds. Invest in nonprofits — 501(c)3s and 501(c)4s — poised to play an important role in the recovery and rebuilding. Invest in the public-health needs for testing, vaccines, delivery, and health services. Invest in preparedness and community resilience.
As billionaire John Arnold urged in March, “To the philanthropically inclined whose giving hasn’t matched your intent, now is the time. Almost every nonprofit is being asked to do more with less. That money sitting in your donor-advised fund doesn’t help people; the nonprofits doing the work help people.”
If you run a company or are heavily invested in companies, ensure companies are doing their part. Ask what your companies can do.
Keeping people employed is one of the ways companies are mitigating hardship. Companies that can afford to can donate cash to response funds and nonprofits. Consider what products and expertise might be relevant to the response, but know that cash is often needed more than in-kind donations, which can be of more value to the giver than those such gifts purport to benefit.
Give visibly.
Every time someone announces a commitment publicly, it inspires others and nudges norms. Now is not the time to give anonymously. Communities are suffering and need to know that solidarity comes in many forms including just systems and policies but also in the form of giving, sharing, and caring.
It is clear philanthropy will not be able to respond to this black-swan event or solve the ensuing crises on its own. The role of government and business cannot and should not be underestimated. And at some point, we will shift from emergency response to re-imagining and rebuilding. However, there is an urgent and important role that people with wealth can play to intervene quickly and avert aspects of a rapidly deepening crisis.