Five foundations on Thursday jointly pledged over $1.7 billion to assist nonprofit organisations across the globe weather the storm created by the deadly coronavirus, which has killed thousands across the globe and shut hundreds of businesses.
They include the Doris Duke Charitable Foundation, Ford Foundation, W.K. Kellogg Foundation, the John D. & Catherine T. MacArthur Foundation, and the Andrew W. Mellon Foundation.
They announced a joint commitment to increase their payouts to non-profit organisations with more than $1.7 billion within the next three years to help stabilise and sustain the sector facing devastating economic effects due to the global pandemic and the ”epidemic of social injustice”.
This financial commitment, published on the MacArthur Foundation website represents new funding above the previously approved budgets by each foundation’s board. Each foundation will determine priorities for the distribution of the new funds based on its grantmaking guidelines and priorities.
Generally, in the aggregate, funds will cover grantmaking aligned with each foundation’s mission, including racial equity and social justice, arts and culture, higher education, human services, climate solutions, and other areas to provide financial support to communities that are most vulnerable and hardest hit by the impact of COVID-19, the statement explained.
It also said the economic crisis caused by the pandemic is already impacting the financial health and well-being of nonprofits.
”In the U.S., nonprofits employ more than 10 per cent of the private workforce or approximately 12.3 million people. According to a Nonprofit Finance Fund survey in 2018, almost 75 per cent of nonprofits do not have six months of cash reserves. The financial fallout of COVID-19 is being felt as nonprofits are experiencing postponed programming and revenue-generating events, threatened academic enrollments, cancelled artistic seasons, fewer grants from foundations given lower endowments, reduced corporate sponsorships, and prospects that government contracts are at risk due to shortfalls in state and city budgets.
”In a recent CAF America survey, 73 per cent of nonprofits said they have already seen a decline in contributions, and half said they expect to see revenue a decline by more than 20 per cent over the next year, while the need for services is expected to increase due to the coronavirus pandemic,” the statement added.
It said economists and fundraising experts predict that the drop in charitable giving ”will likely be more significant than that of the Great Recession in 2008, and recovery will likely take longer.”
‘To the rescue’
The donors, according to the release, said they are hoping that this infusion of capital will help the nonprofit recipients to ”be more resilient and durable organisations, able to proactively work to build more sustainable and viable operating models in a post-coronavirus environment.”
Ed Henry, President and CEO of the Doris Duke Charitable Foundation, said amidst the global crisis, there is an opportunity and obligation to intensify the commitment to addressing inequities to ensure a future that improves on the past.
“The nonprofit sector is essential to building a just and thriving society, and in this moment, their work is more critical than ever,” Mr Henry said.
“Working with foundations across the country, we will drive forward with a reinforced dedication to our missions and step up our support to vitally important human services, public health, research, environmental, and arts and cultural organizations.”
Also, Darren Walker, President of Ford Foundation, was quoted as saying, “COVID-19 presents an existential threat to nonprofits, and we must respond in creative and innovative ways. The pandemic has brought into sharp relief the results of decades of growing inequality. The virus is only compounding that inequality, taking a disproportionate toll on the poor, people of colour, immigrants, people with disabilities, and others who were already marginalised before the crisis hit.”
“This is a time that calls for bold leadership and innovation,” said La June Montgomery Tabron, W.K. Kellogg Foundation President and CEO. “Philanthropy needs to respond to the scale of the challenges we are facing. Post-pandemic, our grantees, communities, and partner organisations will need to be strong to re-imagine and rebuild systems centred on racial equity.”
Elizabeth Alexander, President of the Andrew W. Mellon Foundation, also reportedly said, “Together, we are experiencing the extraordinary pain of a pandemic, an economic depression, and relentless violence and racial threats against African Americans. The transformative and provocative power of artists, cultural institutions, and humanities scholars will prove even more essential to our country’s future vitality.”
“At this moment of massive disruption, we see opportunity,” said MacArthur Foundation President, John Palfrey. “The pandemic is wreaking tragedy across the world and, in particular, in African American communities. In the face of an extraordinary social and economic crisis, our city, country, and global communities require a transformation. Our response to the pandemic will focus on supporting the reinvention of systems that create a more just, equitable, and resilient world.”
The statement said each foundation, in the coming weeks, will share its plans and timing of deployment of the new grantmaking funds.
”In order to generate additional funds for grantmaking, the foundations are exploring different mechanisms, including using funds from their endowment or issuing long-term debt via the capital markets.
”This joint effort is an extension of growing collaboration in philanthropy and reflects recent efforts among many foundations to adopt more flexible grantmaking and administrative approaches to supporting grantees during this crisis.”