Home Donors, Volunteers Organizations How the Coronavirus Pandemic Is Changing Philanthropy – The Wall Street Journal

How the Coronavirus Pandemic Is Changing Philanthropy – The Wall Street Journal

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The Mutual Aid Bushwick community group worked with volunteers to deliver food to New York City families in need amid the coronavirus outbreak in the spring.

Photo: Braulio Jatar/Zuma Press

The Covid-19 pandemic is forcing donors, volunteers and nonprofit organizations to rethink how they give and receive charitable aid.

In many communities, individuals are banding together to help neighbors directly. Elsewhere, institutional donors are creating Covid-19 emergency funds, making grants less restrictive and investing more in minority-led charities. Those who have long advocated for philanthropy reform say the changes—if they take root—could result in more flexible and equitable forms of charitable giving.

Here is a look at how Covid is affecting the philanthropy space:

Mutual-aid networks

Informal networks of neighborhood volunteers have cropped up across the country to buy groceries, provide rental assistance, do errands or just check in on vulnerable members of local communities. Known as mutual-aid networks, these groups often seek to address community needs that aren’t being met by government agencies or traditional charities.

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Bed-Stuy Strong, a Brooklyn, N.Y., mutual-aid network that formed in March, now includes 4,000 people. The group organizes volunteers via Slack, often collecting donations through apps like Venmo. Bed-Stuy says it has purchased and delivered a week’s supply of groceries, cleaning products and even diapers, for more than 17,000 people—85% of whom were elderly, sick or disabled.

“The scope and duration of the pandemic is likely to strengthen mutual-aid networks throughout the country,” says Laura Tomasko, a policy program manager at the Urban Institute.

Emergency funding

The pandemic has caused many philanthropists to create emergency funds and rethink grant-making procedures to get money into the hands of nonprofits quickly.

About 850 Covid-19 emergency-response funds have been created in the U.S. to date, according to the Center for Disaster Philanthropy, which manages disaster funds for donors, and Candid, a provider of information about nonprofits and foundations.

Some fund administrators have streamlined how they award grants to move that money quickly.

Communities Foundation of Texas, along with 30 other foundations and United Ways, created a Covid-19 emergency-funding collaborative in early March called North Texas Cares. Among other things, the collaborative uses a common application to make it easier for nonprofits to request funds and foundations to join forces on grants, says Sarah Cotton Nelson, chief philanthropy officer at Communities Foundation of Texas.

She says her foundation was able to make grants within two weeks, instead of the normal three to six months. Between April and mid-July, North Texas Cares awarded 1,400 grants worth $40 million to 630 area nonprofits.

The hope is that more philanthropists will allocate some part of their budget to emergency funding as part of standard operating procedure, says Maya Winkelstein, chief executive of the Open Road Alliance, which provides bridge loans and grants to nonprofits. “You can’t predict the next crisis,” she says, “but there will be another one.”

Backing minority nonprofits

Colorblind grantmaking—or supporting nonprofits irrespective of the racial makeup of its staff and leadership—has been common practice in the philanthropy industry for years. Recent research, however, suggests this practice often ends up favoring organizations led by white people.

Cheryl Dorsey, president of Echoing Green, an organization that supports emerging social entrepreneurs, and co-author of an influential report on racial bias in philanthropic funding, says connecting and sustaining relationships with donors are among the barriers Black-led nonprofits face.

To address such racial inequities during the pandemic, some foundations have committed to allocating a certain portion of funding to minority-led nonprofits. The Greater Washington Community Foundation is one. Its Covid emergency fund has made a total of 224 grants to date, and 57% of that funding—about $5.3 million—has gone to organizations led by people of color, it says.

The pandemic, which has disproportionately affected minority communities, along with the death of George Floyd and subsequent Black Lives Matter protests, are likely to further encourage donors to fund Black-led organizations as a way to sustain a larger civil-rights movement, says Jane Wales, vice president and executive director of the Aspen Institute.

Whether this means less money for other kinds of nonprofits remains to be seen, says Grace Sato, director of research at Candid, adding that her organization doesn’t have enough data yet to say for sure.

Less-restrictive grants

When the pandemic spiked, many nonprofits created new programs to help people most affected. That drove home the need for more general-support funding for nonprofits, as opposed to grants tied to specific projects and outcomes.

In March, the Council on Foundations, a membership group of endowed, grant-making organizations, issued a pledge to “make new grants as unrestricted as possible, so nonprofit partners have maximum flexibility to respond to the crisis.” The pledge, signed by more than 700 organizations, also calls for reducing reporting requirements and administrative burdens on grantees.

Sonal Shan, executive director of Georgetown University’s Beeck Center for Social Impact and Innovation, says it would be easier for nonprofits to pursue their objectives if funders shifted away from narrow grants, focusing more on results and outcomes rather than very specific processes or initiatives.

In practice, this might mean issuing multiyear grants that cover nonprofits’ operating costs. Hilary Pennington, executive vice president of programs for the Ford Foundation, believes that going forward foundations and other donors might start to act more like venture capitalists.

“We need to be better partners and assume some of the risk from our grantees,” she says.

Ms. Ward is a writer in Vermont. Email her at reports@wsj.com.

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