2020: A Moment of Transformation for Philanthropy?

Naomi Orensten

In early spring this year, as the coronavirus pandemic worsened, foundations in the U.S. began to respond by shifting resources and practices. Some funders, nonprofits, and others in the field called for fundamental changes in how funders approach their work — including upping the provision of long-term, flexible funding, shifting the funder–grantee power dynamic, placing greater trust in nonprofits, and increasing foundation payout.

As the pandemic exacerbated long-standing structural inequities — especially in Black, Latino, Native American, and low-income and working-class communities, and for people with disabilities — foundations were also called on to invest in communities hit hardest by the pandemic, and to integrate racial equity more comprehensively into their work.

One such call to action is Philanthropy’s Commitment During COVID-19, a pledge hosted by the Council on Foundations that charges funders to act with “fierce urgency to support our nonprofit partners, as well as the people and communities hit hardest by the impacts of COVID-19.” Nearly 800 funders have now signed the pledge.

At the same time, following the murder of George Floyd by police officers in Minneapolis and the nationwide protests that followed, many foundations were moved to reckon — in a deeper way than perhaps they had before — with anti-Black racism and what it means for their work. Demands for foundations to step up intensified and, increasingly, more foundations have taken action.

Given all the calls for change, the question becomes: what’s actually changing in foundations’ practices? And what does this mean for the future?

This summer, CEP set out to explore these questions.

In our new report, titled Foundations Respond to Crisis: A Moment of Transformation?, we share some answers, honing in on how the crises of 2020 are shaping the thinking and actions of U.S. foundations.

Insights in this report, the first in a three-part series, are based on what we learned from surveying and interviewing foundation leaders. We based many of our questions on elements of the aforementioned pledge. In July and August, we surveyed more than 800 foundations and received responses from 236 (170 of which had signed the pledge and 66 of which had not). Additionally, we conducted hour-long, in-depth interviews with leaders of 41 foundations that signed the pledge.

In analyzing this data, we learned that the crises of 2020 have catalyzed foundation leaders to reconsider their choices about how they conduct their work. These leaders say that the events of recent months have prompted them to reevaluate — and reevaluate quickly — how they approach their work and incorporate new or different practices, with less of a focus on traditional norms. As one leader said, “This has been a wakeup moment for philanthropy.”

All interviewed foundations and almost all surveyed foundations reported making changes in how they go about their work. Among the most frequent changes were loosening or eliminating grant restrictions, reducing what is asked of grantees, and making new grants as unrestricted as possible. (How foundations are being more flexible and responsive with grantees will be explored in more depth in the third report of this series.)

When it comes to increasing giving, 21 percent of foundations said they had not decided whether they would change their grantmaking level in 2020. Among those that had decided, 72 percent said they had or will increase grantmaking in 2020 beyond what was previously budgeted for the year. One leader explained it in plain terms: “The organizations we partner with need more. Foundations have been able to recover from past recessions. But some communities have not.”

Foundation leaders report placing a newfound emphasis on listening to grantees and the communities they serve, finding that this practice has significant importance during this time. As one leader said, “We’re really just beginning to learn how to develop the culture and practices to listen more effectively to communities least heard and most affected by inequity. As we look ahead, it’s going to be critical for our organization.”

Foundation leaders said they are also investing in communities hit hardest by the pandemic and doing more to address inequities, especially racial inequities. (How foundations are supporting these communities and how they are reckoning with racism will be the subject of the second report in this series.)

Foundation leaders hope that, overall, funders will continue to build on the changes they are making rather than return to ways of the past. They express a sense that this is a vital moment for philanthropy to change for the better. As one leader said, “The commitments in the pledge need to be the new status quo. That’s easy, right? We did it in a couple of months. We can keep it that way.”

Many of those we interviewed view the changes they’ve made as long overdue and hope these crises transform how funders do their work after the current crises fade. Said one leader:

The pledge was really a baseline. All of these things should be part of philanthropy. This hopefully will transform philanthropy. But if this is as far as philanthropy’s going to go, then I don’t think we’re stepping up to the moment.

Whether that occurs, of course, remains to be seen.

CEP is grateful to the Charles and Lynn Schusterman Family Foundation, David and Lucile Packard Foundation, Ford Foundation, Raikes Foundation, Weingart Foundation, and William and Flora Hewlett Foundation for funding this research.

Please join in the conversation. Share your thoughts in the comment section below or email me at naomio[at]cep.org.

Download Foundations Respond to Crisis: A Moment of Transformation? here.

Next month CEP will be releasing the next two reports in this series. The second report will explore how foundations are supporting communities — Black, Latino, Native American, immigrant, low-income, and people with disabilities — hit hardest by the pandemic and how they are reckoning with racism. The final report will explore the extent to which foundations are being more flexible with, and responsive to, grantees.

Naomi Orensten is director, research, at CEP.

SHARE THIS POST
Previous Post
Seeding a Better, More Equitable Normal
Next Post
Foundation Leaders, It’s Time to Shrink the Gap Between Words and Deeds

Related Blog Posts

Menu