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From: Dan Parks
Subject: A Spike in Generosity Aids Big Nonprofits
Good morning. This week we released new Chronicle data showing that giving has soared at big nonprofits, yet nonprofits of all kinds are worried about what comes next. We examine what nonprofit tax policy might look like if Joe Biden is elected to the White House next week and how foundations plan to help front-line nonprofits if the elections are marred by violence or misinformation. And we look at how nonprofits can ensure pay equity, how young wealthy donors are giving in the Covid era, and why small scrappy groups make such a difference in helping communities rebound from crises. Keep this guide to the week’s news, analysis, and opinion with you as you stand in line to vote, and we’ll give you insights, tools, plus inspiration from a Nobel Peace Prize winner.
— Stacy Palmer and Dan Parks
Will the Giving Surge Last?
During the worst economic downturn since the Great Depression, giving has skyrocketed at many of the nation’s biggest charities, a new Chronicle survey finds.
In a spot check of the 116 charities that raise about 10 percent of all contributions from individuals, foundations, and corporations, we found that giving was 22 percent higher during the first six months of the year than it was during the same period in 2019.
Even more surprising: Giving in the second quarter increased 41 percent above the same time last year. You can see all the data, collected by Michael Theis, in this easy-to-sort table.
Significant as the increases are, they are not necessarily keeping up with the spike in need, write Emily Haynes and Eden Stiffman in their analysis of the data and their interviews with more than two dozen nonprofit officials.
Donations to Feeding America’s national office rose by nearly 46 percent in the first six months of the year. That came as the food banks that are part of the Feeding America network served 60 percent more people.
Nonprofits not directly connected to the crisis have also been the beneficiaries of the rise in generosity. The Nature Conservancy, which protects land, also received a surge of donations, with 40 percent more flowing into the organization in the first half of the year. That money came largely from wealthy donors as people at other income levels held back amid job losses and economic uncertainty.
Many other charities are also seeing influxes of donations from the wealthy. “The people who had good jobs, good incomes, had assets — they recovered just fine in most cases, but poorer people, lower-income people, people of color have gotten decimated,” says Brian Gallagher, chief executive of United Way Worldwide. “Anyone who’s in a position to give is giving the same or more. But you’ve got tens of millions who aren’t in a position.”
Across the board, organizations are tempering their expectations for the end of the year. Some fundraisers worry whether individuals who felt compelled to address the crises of 2020 early in the year will continue to give as unprecedented needs spiral and donors remain concerned about their own jobs and finances.
What’s more, many fundraisers expect donors will press pause in their giving while they wait for the outcome of next week’s election.
Some of the biggest donation losses came at charities that rely on in-person events like walkathons and galas. Thirty-one of the nonprofits in our survey saw giving decline in the first half of 2020 compared with last year.
Cultural organizations, suffering from the impact of social-distancing rules, are especially nervous.
“My concern is how long will people stay committed if they can’t come. That’s a huge, huge fear,” says Clyde Jones, senior vice president for institutional advancement at the Metropolitan Museum of Art in New York. “I don’t know how many times we can go back to people and say, ‘It’s an emergency again.’ You become a little like Chicken Little. How often can the sky fall?”
See the entire special report here.
How college giving is faring: One-quarter of college alumni said they had made a gift to their alma maters in the current year, and appeals for emergency relief and annual funds are drawing strong support, according to a study released this week by Anthology, an education technology company, writes Emily Haynes.
Hurricane Sandy: Roadmap for Responding to Covid
As Covid hit, many nonprofit experts fretted that there was no playbook for dealing with such a complex health and economic crisis.
But nonprofits and foundations in New York knew differently: They have been putting into effect what they learned after Hurricane Sandy and using networks they built then to strengthen the response now. They had also quickly realized that Covid and Sandy were similar because they exposed tremendous racial and economic equities in the region.
The Sandy experience is a key reason grant makers are turning to small, community-based organizations. Research conducted by prominent scholars found that they were far more effective than the big national organizations.
Sandy also pushed grant makers to disburse money quickly to grantees, streamline grant processes, and think in new ways about how to identify the greatest needs.
The Brooklyn Community Foundation says it realized it needed to beat its Sandy giving speed in Covid. Over 16 weeks, the foundation issued 420 grants totaling $3.3 million. It asked only two questions of applicants for aid:
- Is your organization responding to the Covid crisis?
- And how does your group’s work address racial equity?
Cecilia Clarke, CEO of the Brooklyn fund, says both crises have taught her the importance of supporting advocacy efforts that focus on persuading governments to meet long-term needs.
“Philanthropy can shine a light on the issues and the populations the government is clearly not thinking about,” she says. “To get the government’s attention, you’ve got to put as much stuff in front of them as possible. That’s activism and advocacy. And that’s how philanthropy can be useful.”
Another idea from Sandy that has gained traction: giving cash to the needy.
For example, the grant maker Robin Hood in New York is distributing cash to individuals, focusing on households with a wage earner who is hospitalized.
“This is about agency. This is about respecting people,” says Emary Aronson, chief knowledge officer and senior adviser to the CEO at Robin Hood. “We are saying you are making what are the best decisions for you.”
Charities Nationwide Gain Trust for Their Crisis Response
Forty percent of registered voters say nonprofits have done a better job responding to the needs created by Covid-19 than the federal government or businesses, according to a new poll of registered voters sponsored by Independent Sector.
Biden’s Tax Plan: Changes for Those in Need — and Those Who Support Nonprofits
There’s a lot for nonprofits to like in Joe Biden’s tax proposals to help the neediest, but his plan to limit the value of itemized deductions for those making $400,000 or more could hurt giving, reports Ben Gose.
The proposal could land hardest on universities, arts institutions, and other charities that rely heavily on big gifts from the wealthiest Americans. “Every nonprofit that gets resources from the top 1 percent of donors should be extremely concerned,” says Arthur Brooks, the former head of the American Enterprise Institute who is now a Harvard professor.
However, other aspects of the Biden plan, such as boosting the capital-gains tax, might increase donations, experts say.
Aaron Dorfman, president of the National Committee for Responsive Philanthropy, says that even if Biden’s plan mildly reduced giving, that’s not sufficient reason for charities to oppose it.
“Too often the analyses of what proposed tax policies will do for the nonprofit sector don’t take into account the substantial role that government plays in meeting the needs of society,” Dorfman says. “We need to think holistically about any tax policy that gets proposed — not simply judge it based on whether it will increase or decrease revenue to nonprofits.”
How Foundations Are Gearing Up for Next Week’s Elections
Fearing the potential for violence, chaos, and a flood of misinformation in the aftermath of Tuesday’s election, foundations are looking to free up more cash to support grantees that will be on the front lines in the event of disputes over the results, writes Alex Daniels.
The Piper Fund, a donor collaborative housed at the Proteus Fund, set aside about $250,000 to respond to events following the election.
Where the money will go depends on how people respond to the election, but the grants could go to groups that provide de-escalation training during protests and to efforts reminding local elected leaders about the importance of the right to protest, according to Julia Reticker-Flynn, a program officer at the Right to Protest at the Piper Fund.
Anita Khashu, director of the Four Freedoms Fund, anticipates that the big need will be for foundations to support a “counternarrative” to messages of voter fraud that could undermine the results.
Rockefeller’s $1 Billion Extra for Covid and a ‘Green Recovery’
The Rockefeller Foundation is the latest grant maker to use a debt offering to free up hundreds of millions of charitable dollars without digging into its endowment, writes Alex Daniels.
The foundation will spend $1 billion over three years, including $700 million from a 30-year bond it offered in September, on grants and investments in Covid-19 testing, tracking, and vaccination development and distribution.
The foundation will also use proceeds from the bond to invest in renewable energy in areas without access to reliable power. The foundation’s work introducing high-yield agriculture across the globe following World War II is referred to as the Green Revolution. Echoing that history, Rockefeller has dubbed its billion-dollar effort a push for a “Green Recovery” from the pandemic.
“When we brought this to the board, we got clear messaging: ‘Do it once, do it big,’” says Dominick Impemba, Rockefeller’s chief financial officer. “So we feel like this is our big shot.”
— The amount Charles and Helen Schwab donated to provide homes to people in the San Francisco area who don’t have a place to live.
How Charities Can Curb Pay Inequities
Some nonprofits are wondering how they can make progress on racial equity — especially efforts to end salary disparities — when they are struggling to stay afloat, writes Lisa Schohl.
But Katie Donovan, founder of Equal Pay Negotiations, a firm that helps employers achieve fair compensation, says now is a “perfect” time to make change. “You’re really using this nice lull in active recruitment to change things,” she says.
What the experts advise: Stop asking job candidates for their salary history or how much they expect to make. These questions can perpetuate inequities. Look at your recent promotions, and assess whether all employees had the same opportunity to apply for those jobs. And set compensation based on the median pay for white men.
Young Wealthy Donors Are Giving Big — and Giving Fast
A new study of affluent young donors found that the Covid crisis, racial reckoning, recession, and other challenges are prompting them to give with more urgency than ever before.
Sharna Goldseker and Michael Moody, authors of Generation Impact: How Next Gen Donors Are Revolutionizing Giving, surveyed 110 young donors about how they and their families are responding to today’s crises.
Donors said they front-loaded their grant making over the spring and summer to get money out quickly to charities that help people most affected by the pandemic and the financial crisis, many of whom are people of color or people who live in low-income areas.
“This moment represents an opportunity to disrupt the top-down donor dynamic,” says Andrew Dayton, a Rockefeller heir who leads the Constellation Fund, which works to raise the living standards of people who live below the poverty line.
A Call for Foundation CEOs to Lead
Many grant makers have loosened restrictions on how nonprofits can use their dollars to help organizations cope with Covid and the recession, but resistance to long-term change remains strong, write Phil Buchanan of the Center for Effective Philanthropy and Hilary Pennington of the Ford Foundation.
“Failure to change funding practices,” they write, stems from “a lack of leadership. It’s time for foundation CEOs to take the lead and send a clear message that their organization’s default practices for supporting nonprofits are no longer acceptable.
“We’re not suggesting that every grant provide multiyear general support. Project funding and one-year grants make sense in some cases,” they write. “But surely grant makers can do better than the current level of barely more than one in 10 such grants. After all, foundations pursue their goals through the nonprofits they support. If those nonprofits lack organizational strength, they are far less likely to meet those goals.”
2 Causes Philanthropy Too Often Overlooks: Opinion
Domestic violence. Abuse from family members is “both a cause and a result of numerous societal problems nonprofits seek to address, such as homelessness, economic instability, health inequities, and gender inequality,” writes Debbie I. Chang, CEO of Blue Shield of California Foundation. “Yet these inherent connections are frequently unrecognized because domestic violence is still treated like an issue of private domain — too complicated and separate from other challenges.”
Black girls. At a time when philanthropy is giving record levels to racial-justice and equity efforts, donations to help Black women and girls continue to lag, writes Monique Morris, executive director of Grantmakers for Girls of Color. Lack of attention from nonprofits, the media, and academe mean Black girls “suffer silently because of the perception that their struggles aren’t important.” She adds: “Philanthropy cannot and should not be a party to perpetuating this silence.”
What Makes Organizations Resilient in Uncertain Times
As Covid has made clear, nonprofits and foundations must plan for multiple scenarios in an era of intersecting calamities, write Jennifer Holk and Gabriel Kasper at the Monitor Institute by Deloitte.
In particular, they note that grant makers and nonprofits “should pay special attention to talk of a K-shaped recovery, where some people and some parts of the economy begin to prosper and grow while others continue to struggle or decline.”
Although it’s impossible to forecast precisely what’s next, they write, “we do know that the most resilient organizations will be the ones that have prepared to respond to an array of options and are ready to shift quickly.”
Working to Avert Global Famine
Covid-19 has made it harder than ever for the World Food Program to achieve its mission of ending starvation around the world. But the program hopes that winning the Nobel Peace Prize this month will boost its work to persuade private donors and governments to move fast to supply funding needed to prevent mass starvation, writes Alex Daniels.
People on the Move
- Melvin Galloway will be the next chief operating officer of the Robert Wood Johnson Foundation. Most recently he was executive vice president and chief operating officer at the Planned Parenthood Federation of America and the Planned Parenthood Action Fund.
- Steve Youngwood, chief operating officer and president of Sesame Workshop’s Media and Education Division, has been promoted to CEO of the organization.
- Najada Kumbuli is now head of investments at the Visa Foundation, where she will help direct private market capital to support the Visa Foundation’s Equitable Access Initiative. Most recently she was investment director at Calvert Impact Capital.
See more in our Transitions column.
New Grant Opportunities
Your Chronicle subscription includes free access to GrantStation’s database of grant opportunities. Among the latest listings:
- Racial equity. Racial Equity 2030, administered by Lever for Change and sponsored by the W.K. Kellogg Foundation, is a $90 million global challenge to drive an equitable future for children, families, and communities across the world. This challenge seeks ideas from anywhere in the world and will scale them over the next decade to transform the systems and institutions that uphold inequity. Solutions may tackle social, economic, political, or institutional inequities. Applications must embrace and reflect the values of racial equity and justice, and proposed solutions should be led by an experienced team that includes communities closest to the issue as part of leadership in the project. The registration deadline is January 28, 2021; applications will be due February 25.
- Rule of law. The World Justice Challenge 2021: Advancing the Rule of Law in a Time of Crisis is a global competition to identify good practices and high-impact projects and policies that protect and advance areas of the rule of law most affected by the Covid-19 pandemic. Proposals should offer solutions addressing any of the following: access to justice for all, accountable governance, anticorruption and open government, and fundamental rights and nondiscrimination. Awards of $20,000 will go to six projects that show demonstrable results and promising prospects for future progress. The application deadline is December 11.