COVID-19 and Philanthropy: Challenges, Insights, and Opportunities for the Field of Grantmaking

Mar 8, 2021Coalitions, Global Health, Perspectives, US Health

This article draws on insights derived from a funder survey distributed by Camber to explore the impacts of COVID-19 on the philanthropic sector and identifies opportunities to catalyze more effective grantmaking throughout the pandemic.

By Roxane Sazegar

The COVID-19 pandemic’s devastating effects on historically under-resourced populations are widely recognized and documented. Beyond its calamitous impact on public health, the pandemic has disrupted nearly every facet of daily life and, by consequence, the economy, with the greatest consequences falling along and exacerbating existing fault lines of race, gender, and class. Nearly a year into the pandemic, the situation has grown exceedingly dire—an October 2020 study found that “1 in 4 Americans are now jobless or earning poverty-level wages”.[1]Stories of eviction, lost livelihoods, and overwhelmed food banks abound, with women, low-income, and BIPOC communities most severely impacted.

Preventing further damage is essential to the survival of communities bearing the brunt of the crisis, and hinges on the ability of government and civil society to administer swift and effective interventions. Absent government assistance in the face of congressional inertia, philanthropic and non-governmental organizations have been left to take on an increasingly daunting burden. And while the development of several viable vaccines remains a cause for hope, the time it will take to produce and distribute sufficient quantities, both on a domestic and global scale, means that it could be years before the economic effects of COVID-19 subside. Ensuring that grantmakers are equipped to adapt and respond to the crisis until then is thus essential.

To gain an understanding of the COVID-related challenges afflicting the philanthropic sector and possible areas of need, we surveyed program managers across a range of grantmaking organizations. The managed portfolios among those who responded ranged from $500k to $325M in size and included grants across a wide range of programmatic areas including health, education, sustainability, and shared prosperity.[2] Here’s a look at some of the noteworthy insights:

In assessing the severity of COVID’s direct and indirect effects on grantmakers’ ability to achieve their stated missions, we learned that few have been unscathed—in fact, most (75%) reported being at least moderately affected by the pandemic. While we anticipated organizations with smaller portfolios to be the most severely affected, owing in part to the limited financial and programmatic resiliency that comes with smaller budgets, our findings revealed a positive correlation between budget size and severity of impact. Large entities with large budgets were among the most highly impacted, while small entities reported the least impact. Several explanations may account for this trend. The severity of the pandemic’s effects on larger grantmakers may be a function of the larger scope and scale of their operations, which could lead to a higher likelihood of COVID-induced programmatic interruptions. Larger entities may also rely on more traditional and entrenched business models, lacking the adaptability and agility of smaller organizations. The protracted nature of the pandemic and its long-lasting effects might compel foundations with a global footprint to reimagine their traditional operating models in order to continue serving their target populations sustainably. Adapting multimillion-dollar programs that span multiple continents over long periods of time is no small feat, however, and will undoubtedly impose major costs if executed without thoughtful, long-term strategizing.

Beyond severity, our survey revealed that the pandemic has affected multiple dimensions of grantmaking, altered funding availability being the most obvious consequence: as expected, most respondents (82%) expect COVID to alter their available grant funding in one way or another. Anticipated increases rather than decreases in funding were cited by 40% of respondents, three-quarters of whom are anticipating their giving to increase by at least 25%, suggesting that funders are seeing the pandemic as a moment of action and correspondingly augmenting their efforts. The second most commonly cited change (30%) was neither a decrease nor an increase in funding, but a reallocation of funds. Respondents reported deprioritizing long-term goals and non-pandemic related issues, instead focusing their resources on the pressing, immediate needs that have emerged from the crisis, including health, domestic pandemic response, food, and eviction prevention.

As for timing, most respondents (96%) anticipate COVID’s greatest impacts to fall within a 2-year time horizon, meaning that while the worst continues to unfold, grantmakers still have the latitude to cushion the pandemic’s impacts and optimize outcomes by adapting their program strategy. However, the uncertain nature of the pandemic has constrained grantmakers’ ability to respond to it meaningfully. In fact, the most commonly cited impediment (40%) to scenario planning was the inability to do so with confidence given the rapidly evolving understanding of COVID and shifting government policies. That said, it is likely that with the initiation of the vaccine rollout and an increasing understanding of the virus, the ability to strategize with confidence will increase going forward.

Notably, despite the uncertainties and respective limitations on long-term knowledge and planning, grantmakers across the board are stepping up to assist existing grantees. Roughly 80% of grantmakers either have or anticipate providing supplemental funding to better support grantees’ immediate needs. Aside from financial support, grantmakers are making a concerted effort to mitigate the impacts of the pandemic on grantees and bolster grantee autonomy—providing additional operational guidance, relaxing reporting requirements, and increasing flexibility grantees have in utilizing existing funds. While these measures are no doubt crucial to the wellbeing of grantees, the conditions under which grantmakers are operating are suboptimal, with imperfect information and tight deadlines impeding the formulation of a clear strategy that can drive desired outcomes.

As reflected in our survey responses, COVID has imposed material changes on grant programming, affecting prioritization, funding, and timelines, in an environment both volatile and lacking in robust information. Innovative, data-driven, and thoughtful solutions are necessary for transitioning toward a less reactive and more strategic approach to grantmaking in the era of COVID. To that end, the vast majority of respondents (85%) indicated that they either have or are interested in engaging with their peers, to discuss themes as varied as information sharing, joint pandemic response, and grassroots and grantee engagement in the era of COVID-19. Cross-sector collaboration in the form of coalitions is one potential avenue for enabling peer engagement among grantmakers as a means of overcoming COVID-related challenges, bolstering the collective pandemic response, and facilitating more impactful outcomes for underserved communities. Coalitions can drive more meaningful impact by allowing grantmakers to coordinate services, pool resources, and ensure optimal allocation of funding. Further, they can provide a forum for data-sharing and exchange of experiences and best practices, bringing together diverse voices and insights that can catalyze the creation of novel solutions that are imperative in such unprecedented times.

The social sector’s demonstrated eagerness to rise to the occasion despite gaps in understanding provides a ripe opportunity to bring together major funders to share knowledge and think critically about key strategic priorities. The pandemic also offers an opportunity to reflect on traditional modes of philanthropy and consider the possibility of a permanent transition toward one that is more flexible and grantee-led in nature. Such a shift may ultimately be more conducive to equitable and impactful sectoral outcomes. We at Camber Collective have a proven track-record of helping funders define strategic priorities and building effective coalitions that have worked to set field-wide priorities while also enabling robust cross-sectoral grantmaking. We bring extensive experience helping partners navigate uncertainty and can assist in the development and integration of a more equitable approach to grantmaking. We are actively engaged in COVID response at the domestic and international scale, and are continually seeking opportunities to channel the catalytic power of philanthropic funding to support COVID response for under-resourced populations. We welcome your perspective on the data points shared above and would welcome your partnership and collaboration in the months and years ahead.

[1] https://www.cbsnews.com/news/jobless-americans-poverty-line-earnings/

[2] Respondents included 30 program managers across 28 organizations.