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From: Stacy Palmer
Subject: More Foundations Borrow to Boost Grants; Giving Ticks Up
More dollars are flowing out of big foundations these days because grant makers are embracing a new approach to their financing: They are borrowing money to make it easier to spend more right now without digging into their endowments.
The California Endowment in January issued $300 million in debt, following the path of grant makers like Ford and MacArthur, which announced last spring that they were taking out bonds. So far at least $3 billion in debt has been issued by nine foundations, and more might be on the way, writes Alex Daniels.
“The philanthropic sector now realizes we have another tool in the belt to strategically overspend,” says Robert Ross, head of the California Endowment. “This is an approach worth at least kicking the tires on and considering.”
Advocates of the foundation bond offerings say the time is right. Endowments are rising as the stock market continues to perform well. Meanwhile, interest rates are at historic lows, raising confidence that foundations can pay off the bonds in the future without eating into their endowments.
But not all foundations are buying in, with some worry about their ability to respond to future crises. “I don’t know that I have the insight to know that this is a once-in-a-century crisis,” says Adam Falk, president of the Sloan Foundation. “It could be a once-in-a-decade crisis. It could be a twice-in-a-decade crisis.”
Here’s What Else You Need to Know
Big nonprofits fared far better in donations than small groups in 2020. Gifts to charities increased over all by 2 percent in 2020, according to the Blackbaud Institute, but only the largest nonprofits benefited from the boom, writes Michael Theis. Big groups chalked up increases of more than 5 percent while small ones gained just a little over 1 percent. But small nonprofits had an edge when it came to online giving, which over all rose 21 percent last year.
Pandemic nonprofits have benefited as more money has gone in and out of donor-advised funds. Fidelity Charitable reported a banner 2020, with grants surging 24 percent from 2019, to $9.1 billion, writes Glenn Gamboa, who covers philanthropy for the Associated Press. At the same time, donors deposited $14.4 billion into their Fidelity donor-advised-fund accounts. Contributions to nonprofits that fight hunger rocketed up twelvefold, while contributions to the CDC Foundation, which advances the mission of the Centers for Disease Control and Prevention, jumped 9,582 percent. And the surge is continuing: Fidelity says donors are continuing to move dollars out of their funds to charities at a rate that is 50 percent higher than it was at this time last year.
Take advantage of the rise in giving from donor-advised funds: See the Chronicle’s Guide to Donor-Advised Funds.
How philanthropy can fight extremism. The nation is facing parallel pandemics — not just Covid but also the rise of hate, which could prove just as dangerous to our institutions, our civic life, and our nation’s long-term well-being, writes Sarah Ruger, vice president for free speech and peace at Stand Together and a director at the Charles Koch Institute. Grant makers from every political viewpoint can make a difference, she says, by investing in research, prevention, and treatment. “Ultimately, we can’t cure intolerance by shouting at each other across a political and cultural divide,” she writes. “To win the battle against viral hate, leading thinkers and philanthropists must join with those across the culture — in politics, education, and business — to build a societywide effort to match the efforts of those who are spreading hate and misinformation.”
The power tilts to fundraisers in the social-distancing era. After a decade of jumping on planes to chase donors on their time and turf ― at a ranch in Aspen, an airport lounge in San Francisco, or a hair salon in New York City — one nonprofit leader noticed some remarkable changes during her self-imposed Covid lockdown. "People I’d been trying to meet for years started reaching out to me — asking for a call as they explored opportunities to make an impact with their dollars," writes Abby Falik, chief executive of Global Citizen Year. “Those with more money than they needed saw that I offered a scarce resource: the opportunity to make an investment in a better future.” And, she says, that’s not all that shifted the power dynamic between fundraiser and donor: “In video calls, everyone gets the same two-dimensional box with intermittent sound and iffy lighting. Pedigree, title, wealth, and social status are leveled. On Zoom, we are all exactly the same size.”
And as you get ready for the week ahead, focus on building new skills: Join us on Thursday for a webinar to learn how to attract donors of color and others from diverse backgrounds. We hope you have a good weekend.
Gifts RoundupPlus, Arthur Blank donates $17 million to the National Center for Civil and Human Rights, and several university land big gifts.
Q&ADemocracy in serious trouble, says Rajiv Vinnakota, and he is upending the mission of the 75-year-old Woodrow Wilson National Fellowship Foundation to respond.
DispatchesToo often financial supporters think they are helping by making recommendations to people who already know how to carry out nonprofit missions. Let’s focus on what we have to give that truly matters.
OpinionIn a new book of essays, grant makers and nonprofits share what happened when they loosened the strings on grants and offered generous, multiyear support and focused on the experience of grantees, not the pedigrees of their leaders.
Grants RoundupAlso, the MacArthur Foundation has awarded $18 million to reduce over-incarceration in 15 U.S. cities and counties, and the Harold Grinspoon Foundation is giving $11 million in matching grants to re-open Jewish summer camps.
TransitionsAlso, the Community Foundation for Palm Beach and Martin Counties has a new president and CEO, and Beth deHamel, who was recently interim CEO at Mercy Corps, has joined the Conrad N. Hilton Foundation.
What We’re Reading Elsewhere
Here are some of the articles that attracted our attention in the past week. We provide these summaries every day in our free Philanthropy Today newsletter. (Sign up now)
A donor sues to get his money back. A conservative financier who gave $2.5 million to a nonprofit claiming to ferret out voter fraud after last year's election has gone to court to get his money back. Fred Eshelman wrote a big check to True the Vote after a 20-minute conversation with its president the day after the election. Then for about two weeks he waited to see the results. The organization's efforts came up empty, and Eshelman said True the Vote "directed much of his money to people or businesses connected to the group’s president, Catherine Engelbrecht." True the Vote said it spent the money properly and Eshelman is not entitled to get it back. (Washington Post)
Racism scandal ends museum leader’s career. The director of the Indianapolis Museum of Art has resigned after a job posting set off a furor over the institution's approach to diversity. Charles Venable, who has led the museum since 2012, apologized this week for an ad seeking a new director who could broaden the museum's appeal while maintaining its "traditional, core, white audience." Eighty-five employees and board members of the campus where the museum sits, called Newfields, urged him to resign. (New York Times)
Scouts push back on sex-abuse claims. Insurers for the Boy Scouts of America want to examine documents and depose some of the tens of thousands of people who say they were sexually abused while in the Scouts. The insurance companies' lawyers note that before the organization entered bankruptcy last year in a bid for protection against a mountain of abuse claims, it “had been named in 275 lawsuits and told insurers it was aware of another 1,400 claims," a far cry from the 95,000-plus claims that ended up being filed. Insurers' lawyers say some documents are incomplete and seem to have been signed "machine-gun style" to get them in before the deadline in November 2020. Lawyers for those alleging abuse say the request is premature because the Boy Scouts have not yet filed a reorganization plan so it's not yet clear what, if any, role the insurance companies will play in the cases' resolution. (Associated Press)
More than 150 current and former scholars who have benefited from Blackstone CEO Stephen Schwarzman's largess are asking him to cut off funds to lawmakers who voted against certifying the 2020 election results. In a letter emailed to Schwarzman, participants in the Schwarzman Scholars program, which pays to send graduate students to China to study Chinese culture and politics, urged him to exercise the values he espouses — integrity, honesty, and courage — by shunning politicians who tried to overturn "a free and fair election for their own political gain." One analysis found that Schwarzman and his wife, Christine, were the third-largest donors to the objecting members of Congress. Schwarzman declined the request, saying he would take into account the politicians' behavior on the day of the attack on the Capitol but that he valued his constitutional right to choose whom he votes for. (New York Times)
New Grant Opportunities
Your Chronicle subscription includes free access to GrantStation's database of grant opportunities. Among the latest listings:
- Health care and racism. The Rita and Alex Hillman Foundation supports efforts to advance nursing-driven models of care for people who have historically struggled against oppression, discrimination, and indifference. For 2021, the program is issuing a special call for submissions that address racism and its impact on health. The program will award two grants of up to $600,000 each. The deadline for letters of intent is March 30.
- Clean energy and forests. The David and Lucile Packard Foundation supports grassroots organizations based in the southeastern United States and British Columbia, Canada, that are working toward a clean-energy and forest-positive future with social justice at its heart. Grants will be provided for programs focused on one of the following: forest protection and community land rights; frontline community organizing and power-building around social, environment, or climate justice; and combating extractive energy industries (i.e., oil, gas, bioenergy). Expressions of Interest must be submitted by March 8.