How COVID Has Altered the Philanthropic Landscape
2020 was an extraordinary year in so many ways. At this writing, a global pandemic has infected more than 82 million individuals, including almost 20 million in the US, with more to come. The need to physically distance has led to serious downturns in economies across the world, and required widespread adoption of new technologies for education and businesses. Longstanding racial inequities and social injustices have been exacerbated and resulted in more individuals and families being out of work, going hungry and falling into homelessness. Healthcare access, mental health and substance abuse issues, an increase in domestic violence and the closing of arts and performance venues are among many other challenges communities faced in 2020.
Thankfully, the philanthropic response to these issues was also extraordinary. The Center for Disaster Philanthropy’s report issued in August, 2020 documented the following:
In the first half of the year, more than $11.9 billion was awarded for COVID-19 globally
Corporations accounted for nearly two-thirds of funding
Gifts by high-net-worth individuals accounted for at least $1.6 billion
Recent media stories indicate the giving trend has continued in the second half of 2020. Though we don’t have final figures for the year yet, gifts such as McKenzie Scott’s totaling over $4 billion in December will surely raise the bar for what was already a remarkable philanthropic outpouring. As of December 24, 2020 Candid, a group that connects nonprofits with resources and expertise and tracks giving trends, had documented over $20.6 billion in funding that was distributed by 1,221 funders to more than 18,500 groups.
In my home state of Maine, three organizations received gifts from Scott’s largesse, including Coastal Enterprises, Inc, Goodwill Industries of Northern New England and Good Shepherd food bank. The donation to CEI of $10 million is equivalent to the organization’s entire annual operating budget.
In addition to these stunning figures, I have witnessed the smaller but still important ways in which Maine philanthropies are responding to this “once in a hundred years” crisis. A poll in the spring of over 300 nonprofits conducted by the Maine Association of Nonprofits found:
Eighty-seven percent of nonprofits in Maine were experiencing a revenue shortfall
In total, responding organizations estimated a loss of more than $141 million in 2020
Responding organizations estimated an average revenue shortfall of 25% of typical annual operating budget
And yet funders-large and small, public and private- immediately took steps to respond. Examples include:
Waiving grant reports requirements or allowing report extensions and removing grant restrictions from existing grants
Doubling the amount of funding to existing grantees
Providing general operating support and flexibility with funds
Providing funds for organizations to purchase the tools to be able to work from home (computers, workstations, Zoom subscriptions)
Encouraging peer funders to be flexible with their grants
Rapid deployment of funds to safety net organizations such as food banks and pantries
Providing grantees with technical assistance from accountants to look at their finances and help with forecasting and contingency planning
Creating designated funds for the most vulnerable populations such as the immigrant and refugee communities that were affected disproportionately by the coronavirus
These and other actions by Maine funders, and many other foundations across the US, helped the nonprofit sector to weather some of the toughest obstacles caused by the pandemic, but much uncertainty still lies ahead in 2021 and beyond.
I’d like to close with a bright spot that is particularly close to my heart. When the pandemic first struck, I was in conversations with many environmental and conservation nonprofits that I work with in Maine. At the time, these organizations were not considered “front line” entities, and we were all concerned that giving to conservation groups would decline as donors shifted funding to safety net organizations developing vaccines and combating food, housing and income insecurity. However, despite reduced giving from some donors who have been financially challenged by the pandemic, or who have shifted their giving to organizations providing emergency relief, many conservation organizations have actually gained new donors and members, and existing donors have increased their giving. Some organizations I have spoken with have seen existing donors increase gifts by 30-50% in 2020!
It turns out that being in nature and recreating outdoors is increasingly recognized as an essential mental and physical health activity for many Americans, in a way that it wasn’t previously. And as more and more individuals and families needed that outlet during 2020, they became better acquainted with the organizations that have been protecting and stewarding these lands where so many are now walking, hiking, skiing and snowshoeing. While the increase in usage of protected lands has posed some challenges for our land trusts (increased trail maintenance, safety issues, parking, etc.), overall the organizations see this surge in activity as a positive opportunity to engage with new constituents and educate them about the importance of protecting our ecosystems and wild and public places.
It certainly has been a strange and very difficult year. But I am grateful to be part of a philanthropic community, both locally and globally, that has come together to support vital organizations that lead to an enhanced quality of life and healthy planet for all of us.
Our team at SustainabilityNext looks forward to continuing to work with our nonprofit and private sector partners in 2021 to create a cleaner, more just and ethical world. Best wishes for the New Year!