New Study Finds Foundations Making Significant Changes in Response to 2020 Crises

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

FOR IMMEDIATE RELEASE

Cambridge, MA — In response to the compounded crises of 2020, foundation leaders report reevaluating and making significant changes to their practices — including loosening or eliminating grant restrictions, increasing their spending levels, and placing a newfound emphasis on listening to grantees and the communities they serve — new research out today from the Center for Effective Philanthropy (CEP) finds.

The report, titled Foundations Respond to Crisis: A Moment of Transformation?, is the first in a series of three reports CEP will release examining the extent to which foundations have changed their practices in response to myriad calls for change to meet to the unprecedented challenges of this year. The second report in the series will focus on how foundations are reckoning with racism and supporting communities — Black, Latino, Native American, immigrant, low-income, and people with disabilities — hit hardest by the pandemic; the third will look at how they are being more flexible and responsive.

“Foundations are often perceived as notoriously process-heavy and resistant to change, sometimes rightfully so,” says Ellie Buteau, CEP’s vice president, research, and co-author of the report. “But the data we’ve gathered suggest that 2020 has indeed led foundations to work differently. Many of these changes are long overdue, and what remains to be seen is if they will continue after these crises abate.”

Findings in the report 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 in July and August 2020.

All interviewed, and almost every surveyed, foundation leader reported that their institution has made changes in how they go about their work this year. Among the most frequent changes they reported making as a result of the pandemic were loosening or eliminating grant restrictions (66 percent), reducing what is asked of grantees (64 percent), and making new grants as unrestricted as possible (57 percent). When it comes to increasing giving, 21 percent of respondents 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, with a range of increased spending levels cited.

One of the big questions remains the extent to which the crises of 2020 will catalyze funders to change how they do their work in the long term. When it comes to listening to grantees and the communities they serve, among respondents whose foundations began this practice in response to the pandemic, 85 percent say that they will continue to do so permanently. More broadly, two-thirds of leaders in the study expressed a hope that foundations won’t return to their past practices after the pandemic ends.

“This is a pivotal moment for philanthropy, and it’s crucial to understand what is actually changing in practice right now,” says CEP President Phil Buchanan. “Our hope is that the data in this report, along with the two upcoming reports in this series, help funders and nonprofits alike to understand where things stand — and what that might mean for the long term.”

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.

The report is 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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