Within a few weeks of the COVID-19 Pandemic crisis, daily routines were upended, and communities across the globe were impacted in unprecedented ways. The effects of the pandemic touched almost all corners of our societies, including the nonprofit charity sector.
The COVID-19 pandemic has forced donors, nonprofit organizations and volunteers to change how they give charitable aid. From emergency-response funds to mutual-aid networks, nonprofits and communities sped up efforts to take help where it was needed most.
Individuals in many communities banded together to offer direct help to those in need. For instance, the Ananke Foundation was launched by Dr. Malini Saba, a self-made entrepreneur, to cover all her philanthropic activities focusing on human rights, education and healthcare. This foundation, under Dr. Saba’s leadership, made a series of donations to its ‘Save the Children’ COVID-19 response.
Let’s look in more detail at how the philanthropy space has been affected by the pandemic.
As lockdowns were being imposed across the world, the COVID-19 pandemic put an enormous strain on people’s lives. During these uncertain and challenging times, philanthropists have remained committed to supporting the vulnerable groups facing acute and existential threats, including combating depression related to the pandemic.
The coronavirus pandemic caused many humanitarians to change grant-making procedures and make emergency funds available to quickly get money into the hands of nonprofits. To move that money quickly, fund administrators streamlined how they award grants.
To bring immediate lifesaving support, emergency funding in the wake of the coronavirus pandemic supported the following interventions:
- Provision of emergency relief to the affected groups, including shelter, food, sanitation needs, protective equipment, healthcare-related costs, and transportation, among others.
- Increased capacity for NGO advocacy to ensure that the government response reached those in need of assistance as they monitored the needs of vulnerable groups.
- Issuing micro-grants to self-help groups, loans and savings groups, and other community structures to offer credit and help in absorbing financial shocks.
According to Candid, which provides information about nonprofits, and the Center for Disaster Philanthropy, which manages donor disaster funds, several COVID-19 response funds were created in the US, and they helped to bridge the assistance gap while making relevant authorities aware of where help was needed and push for action.
Mutual-aid networks seek to address needs that are not met by traditional charities or government agencies. During the COVID-19 pandemic, informal networks of neighborhood volunteers formed across the country to provide rental assistance, check-in on vulnerable members, buy groceries, or just do errands to assist those in need. The solidity of mutual-aid networks across the US has been strengthened by the scope and duration of the pandemic.
Many mutual-aid networks were formed in March and currently include more than tens of thousands of people. It uses apps such as Venmo to collect donations while organizing volunteers via Slack. At the peak of the pandemic, mutual-aid networks could purchase and deliver up to a week’s supply of cleaning products, diapers and groceries, as well as assisting the elderly, disabled, sick and people adversely affected by the pandemic.
Backing Minority Nonprofits
For years, the support given to nonprofits despite the racial make-up of their leadership and staff has been a common practice in philanthropy. However, recent research has proved that this practice ultimately favors white-led organizations.
According to an influential report that supports emerging social entrepreneurs, Black-led nonprofits face the barriers of connecting and sustaining relationships with donors as a result of racial bias in philanthropic funding. Some foundations have directed a portion of funding to minority-led nonprofits during the pandemic in a bid to address such racial inequities.
The COVID-19 pandemic along with the death of George Floyd has disproportionately affected minority communities. As a way of sustaining larger civil-rights movements, these events further encouraged donors to fund Black-led organizations – whether this implies fewer funds to other kinds of nonprofits is yet to be seen.
Amid the COVID-19 spiking numbers were moments of generosity. Many nonprofits established new programs to assist the most affected people. This drove home the need to fund nonprofits for more general support, rather than to grants encompassing specific projects and outcomes.
When the pandemic was at its peak, the Council on Foundations – which is a group of grant-making, endowed organizations – pledged to issue new grants that were as unrestricted as possible to help nonprofit partners attain maximum flexibility when responding to the crisis. This pledge was signed by about 700 organizations, and also called for reducing administrative burdens and reporting requirements on grantees.
If funders could shift away from narrow grants, then nonprofits would easily pursue objectives and focus more on results and outcomes, as opposed to very specific initiatives or processes. This could practically mean issuing multi-annual grants to cover the operating costs of nonprofits. In this regard, it is believed that going forward, donors and foundations could start acting more like venture capitalists.
How Donor-Advised Fund Donors Responded
In many communities, people banded together to directly help neighbors as the COVID-19 pandemic spiked. Meanwhile, institutional donors created COVID-19 emergency funds to invest more in minority-led charities while making grants less restrictive. According to individuals who had long been advocating for philanthropy reform, the changes were bound to result in more equitable and flexible forms of charitable giving.
In regard to their charitable contributions, donor-advised fund donors tended to engage more in philanthropy. Their response to the coronavirus pandemic reflected some unique qualities, including:
- Almost 70% of donor-advised fund donors felt that they had sufficient information and knowledge to direct and target their support towards addressing COVID-19, while only 51% of general donors did the same.
- They were more likely than general donors to enhance their giving in response to this pandemic. Compared to just a quarter of general donors, a third of donor-advised fund donors are expected to continue increasing their donations in the years to come.
- Rather than directing their donations towards organizations that had been responding to the pandemic, donor-advised fund donors will remain on course in their approach to giving.