New Study Finds Foundations Adopt Greater Flexibility and Responsiveness During Pandemic

Media contact: Grace Nicolette – Vice President, Programming and External Relations: 617-674-0763

FOR IMMEDIATE RELEASE

Cambridge, MA — In response to this year’s crises, almost all foundations surveyed in the latest research from the Center for Effective Philanthropy (CEP) report loosening or eliminating restrictions on existing grants, making new grants as unrestricted as possible, and reducing what they are asking of grantees. Many plan to continue these practices in the future, though to a lesser degree than during their pandemic response, the study finds.

Released today, Foundations Respond to Crisis: Toward Greater Flexibility and Responsiveness? is the final report in CEP’s three-part series examining the extent to which staffed foundations have changed their practices in response to calls for change to meet the unprecedented challenges of 2020.

“The data from foundation leaders we’ve gathered and shared throughout this series suggest that foundations, which are often perceived as notoriously process-heavy and resistant to change, say they are making significant shifts in response to this year’s crises,” says Ellie Buteau, CEP’s vice president, research, and co-author of the three reports. “However, it remains to be seen whether or not this turns, over time, into more permanent, transformative change in how funders operate.”

Findings in the study are based on survey data gathered from 236 foundations — 170 of which signed the pledge hosted by the Council on Foundations to act urgently in response to COVID-19, and 66 of which had not — as well as in-depth interviews with leaders of 41 foundations that signed the pledge. All data was collected between June and August 2020.

Among foundations surveyed for the study, across most or all program areas, 92 percent say they are loosening or eliminating restrictions on existing grants and 80 percent say they are making new grants as unrestricted as possible. When it comes to the provision of general operating support, 75 percent of foundation leaders surveyed report that the current percentage of unrestricted grant dollars they are providing is higher than it was in their pre-pandemic practices.

Further, 90 percent of foundations surveyed report reducing what they are asking of grantees across most or all of their program areas. In particular, most foundations have postponed site visits, reduced or simplified reporting requirements, and postponed reporting requirements for at least half of their grantees.

Among the foundations that began these practices in response to the pandemic, more than half say that they will continue them in the future. However, most foundations report that they will do so to a lesser degree than their current pandemic practice, and about 30 percent are unsure whether they will continue these practices.

The first report in CEP’s series considers how 2020’s crises are shaping the thinking and actions of U.S. foundations; the second focuses on how foundations say they are reckoning with racism and supporting communities — Black, Latino, Native American, immigrant, low-income, and people with disabilities — hit hardest by the public health and economic consequences of the pandemic. CEP plans to follow up on this research in 2021 by surveying and interviewing foundations about the changes they began making this year.

“It is welcome news that foundations are demonstrating greater flexibility and responsiveness in a moment of unprecedented challenge for nonprofits, but this is only a first step,” says CEP President Phil Buchanan. “In the year to come, CEP will continue this line of inquiry and examine, among other things, how the crises of 2020 have influenced foundation philanthropy for the long term and what might help or hinder foundations from implementing more permanent changes to their grantmaking.”

The Ford Foundation provided funding to support this research, along with Charles and Lynn Schusterman Family Foundation, David and Lucile Packard Foundation, Raikes Foundation, Weingart Foundation, and the William and Flora Hewlett Foundation.

All three reports in the series are available for free download on CEP’s website.

ABOUT THE CENTER FOR EFFECTIVE PHILANTHROPY

The Center for Effective Philanthropy (CEP) is a nonprofit organization with a mission to provide data and create insight so philanthropic funders can better define, assess, and improve their effectiveness and impact. CEP received initial funding in 2001 and has offices in Cambridge, Massachusetts and San Francisco, California. For more information on CEP’s work, including its research, publications, programming, and assessments and advisory services, visit cep.org.

The Center for Effective Philanthropy – Improving funder performance through data and insight.

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