Earlier this month, BoardSource joined with CEP and seven other colleague organizations to call on foundation leaders to acknowledge and respond to the devastating and unprecedented realities of the COVID-19 pandemic by increasing grant support beyond their normal payout (which, for most, is 5 percent of their assets).
While there are many reasons that we believe this to be both the humane and strategic response to this global public health disaster, we also understand that — for some foundations — the idea of increasing payout may seem counterproductive to their larger philanthropic goals.
There’s no question: significantly increasing payout is a big decision. It’s a decision that gets at the heart of who you are as a foundation and an institution. It’s driven by your reason for being, your philanthropic goals, your strategy, and your institutional values.
So, while we understand that foundations will make different decisions about their paths forward, we highly recommend that all foundation boards grapple anew with several essential questions as they consider what to do right now. Foundation boards should be asking themselves:
- Why do we exist as an institution? What is the purpose that we seek to fulfill? What values do we hold most dear as we do our work?
- If our purpose and values were the sole guides for our decision making, what would we do or not do in response to this crisis?
- If preserving our endowment or asset size were the primary guide for our decision making, what would we do or not do in response to the crisis?
- If there are differences between these two realities, how do we reconcile them? How comfortable would we be articulating our rationale to external stakeholders? If not, why not?
- What is the likely impact of this crisis on our current nonprofit partners? What will the impact on our philanthropic goals be if we allow those nonprofits to falter or lose ground or momentum in their work? How concerned are we about our ability to find strong nonprofit partners through which we can advance our goals once the COVID-19 crisis passes?
- What do we want our legacy to be when we look back on COVID-19? What will make us feel like we did enough or did right by our institutional legacy, our philanthropic priorities, and our nonprofit partners?
These are important and difficult questions for foundation boards to consider. There’s no single outcome or decision to emerge as a result of these reflections — and nor should there be. But not asking these questions is a mistake I hope no foundation board will make.
Anne Wallestad is president & CEO of BoardSource. Follow her on Twitter at @AnneWallestad.