6 Questions for Funders to Consider During the COVID-19 Crisis

Author:
Leslie Pine
Theme:
Strategic Philanthropy
Friday, April 10, 2020

In this unprecedented global crisis, it is easy to get overwhelmed by the magnitude and diversity of needs and wonder, “What can we do?” If you are like many of TPI’s clients – be that a family foundation, independent foundation, company, or individual donor – this question is likely complicated by the reality that you have pre-existing grantee relationships and strategic programs, and that your own financial resources are shrinking under the economic fallout.

With its unique ability to be flexible, nimble, creative, and take more risks, philanthropy can play a critical role in this crisis and its aftermath. Often grounded in community, funders have a deep understanding of and connection to local needs, effective organizations, networks, and leaders. As a sector, philanthropy can respond quickly and be strategic and patient. At this time of great disruption and uncertainty, it is harder to think big and longer-term, but such thinking is just as important as addressing immediate needs. But of course, philanthropy can’t do everything, and so, how do you pick your spots?

Here are 6 questions and observations that are designed to help you sort through the options, put them in context, and figure out a strategy that makes the most sense for you right now.

  1. How can you best support your existing grantees?

    Your current grantees have likely had to make big changes in their programs due to social distancing advisories and mandates. They may be facing serious revenue declines from contracts, service fees, and cancelled fundraising events, and are nervous about future funding given the economic fallout. This is an important time to reach out to them, check in, provide reassurance, and find out what’s happening. Communication, listening, and adapting are the key words here.

    Many funders are offering flexibility in how grantees can use unspent funds, sometimes converting them to general operating support or to address emergency needs. To avoid making additional demands on nonprofits’ time and energy during this stressful time, some funders are streamlining or relaxing reporting requirements and timelines. Other funders are accelerating timelines for grant funding or offering rapid response grants for urgent needs. As one example, one of TPI’s family foundation clients is inviting grantees to repurpose grants for critical short-term needs, allocating additional funds to some grantees for emergency grants, and expediting the review process for the foundation's next round of renewal grants.

  2. How can you balance continued support for grantees with targeted COVID-19 response efforts? 

    This can be a very difficult choice for funders, as those with declining financial resources will have less to go around, and those with already-established grantee relationships and multi-year initiatives will want to follow through on their existing commitments. There is no blueprint for finding the right balance. In the face of today’s urgent needs, many funders are choosing to add on to their grantmaking budgets to support COVID-19 response efforts, or find resources by cutting expenses or streamlining grants budgets. Measures such as reducing trustee discretionary grants, or letting go of grantees that were either falling short of expectations before the crisis or that don’t look strong enough to survive the economic downturn, may be painful but necessary. 

    For corporate funders, there is a range of opportunities to be responsive in fulfilling immediate needs of their communities, customer base, and employees. In addition to adjusting grantmaking strategies to directly address COVID-19 efforts, some companies are exploring creative ways to leverage in-kind resources, manufacturing capabilities, and other valuable skills and assets. 

  3. Do you want to focus on immediate relief, longer-term recovery, preparation efforts so we are better able to handle the next pandemic, or some combination? 

    We know from history that the vast majority of funds raised in a crisis target immediate needs that can include medical assistance, food and shelter, and other needs of victims. More than one-third of private giving ends less than four weeks after a sudden disaster, and funding stops almost completely after five or six months. This timeline will no doubt be longer for the COVID-19 pandemic, given that the disaster is occurring over a much longer period of time and is affecting everyone locally and globally at different times and in different places. But the same challenge will remain. By the time we feel we have a handle on addressing the immediate needs, the next stage of longer-term recovery will be just beginning. These longer-term needs include systemic opportunities to embed lessons learned from the crisis into stronger health care systems, infrastructure, education systems, social services, and much more. This disaster has no clear playbook, but likely it will be wise for funders to “keep some powder dry” to address the longer-term issues and be part of the collective effort to develop a fairer, more equitable, and more resilient world.

  4. Should you pick specific organizations to support directly or contribute to a pooled fund? 

    If you have existing relationships with specific organizations that you have already vetted and you know need additional resources at this time, direct support to these grantees can make sense. As mentioned in #1 above, this is a time when grantees greatly appreciate outreach and open communication with funders, as well as streamlined and expedited opportunities to request resources to address immediate needs. 

    You may also choose to contribute resources to a pooled fund that is equipped to quickly identify high-quality organizations that are well-positioned to support immediate relief or longer-term mitigation and resilience. Hundreds of COVID-19 pooled funds have launched in the last few weeks, sponsored by community foundations, private foundations, nonprofit organizations, and government agencies. These funds offer the advantage of pooling both resources and knowledge to ensure a collective and strategic response to avoid duplication, spread resources, and coordinate efforts across a range of needs and organizations. For example, two regional funders that TPI works with in New York State are pooling resources together with other funders to create a COVID-19 response fund that will provide emergency relief grants in western New York. 

  5. Do you have specific target populations, issues, or geographies of particular concern that can help focus your giving? 

    A funder’s philanthropic mission may be their compass towards a specific type of response to this crisis, like helping immigrants or indigenous people, supporting data-driven solutions, or ensuring students have the resources they need. For those with experience in specific geographies or with certain populations or issues, it will be easier to scan the landscape and connect with other key players. Some funders will choose to focus on areas that have been neglected or people who are most vulnerable and perhaps excluded from major government programs such as those who are homeless or incarcerated.

  6. Can you offer expertise or resources to your partners beyond grants? 

    Money is important, but you can also offer other valuable gifts, such as your technical expertise for those having to quickly adjust to virtual work, or other resources and connections. As noted above, companies are offering in-kind support like the use of private transport, manufacturing capabilities, or logistical support to help coordinate supplies and relief efforts. You can connect your grantees to others who may be dealing with similar challenges and let them know about such resources as financial fitness training or free software. For nonprofits who are experiencing an immediate revenue reduction, the newly passed federal CARES Act is an important resource – and some private funders are also offering simple interest-free lines of credit and other support.

These are just a few of the questions that may help funders and corporate leaders consider how their philanthropy can make a difference in the face of overwhelming needs right now and in the future. While there is no question that the role of government is and will continue to be critical, philanthropic resources are an important piece of the puzzle. The challenge for all of us is to listen, learn, and think creatively and strategically about what path to take.

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For additional resources, visit our COVID-19 resource page. Please reach out to anyone on our info [at] tpi.org (team )to explore opportunities to help, share other resources, or discuss any concerns or questions you might have.

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