Lessons from One Year of COVID Philanthropy

Volunteers working at the LA Regional Food Bank’s drive-thru food distribution center. Ringo Chiu/shutterstock

On March 11, 2020, one year ago to the day, the World Health Organization declared COVID-19 a pandemic. Two days later, then-President Donald Trump declared a national emergency and the stage was set for a year without precedent in living memory. Though the pandemic is far from over, what has happened over the past 12 months will stay with us for the rest of our lives, shaping American society—and the world—in ways that are still hard to foresee. 

The same is true of philanthropy. Right at the start of 2020, just two months before lockdowns, masks and social distancing, Inside Philanthropy founder David Callahan shared 16 predictions about what the 2020s might bring. Though some items on that list might require a second look (No. 3—“government will get smaller”—sounds a bit funny now), the final prediction was eerily prescient: “A major crisis will catalyze dramatic change in philanthropy.”

“One upside of this event,” Callahan wrote, invoking the frequent characterization of philanthropy as society’s risk capital, “will be to force the relatively staid world of giving to embrace far greater urgency in its work.” 

We’re one year into that major global crisis—one that has compounded and coincided with a dizzying array of additional crises and emergent needs. So has philanthropy changed? Is there more urgency in the work? And will the changes COVID has brought be lasting ones?

Those are questions we at Inside Philanthropy and a whole host of sector professionals have spent a year pondering. While it’s hard to take conclusive stock of a developing situation, there are at least a few things we can say about how COVID-19 has influenced funder behavior and how it hasn’t. 

It is sobering to consider that as life-altering as COVID has been for everyone, it hardly grants us immunity against further crises borne of climate change, war, even another virus. If philanthropy truly represents society’s risk capital, it’s more vital than ever that the sector take to heart the lessons of COVID. One year on, here are some to consider.

Philanthropy can move fast

To start on a positive note, the onset of a global pandemic was a catalyst for quick commitments. Grantmakers in the U.S. and abroad met the global crisis with giving that ended up totaling about $20 billion during 2020. According to a report compiled by Candid and the Center for Disaster Philanthropy, funders in 38 countries channeled $11.9 billion to COVID responses in the first half of the year alone, far outstripping any other instance of disaster funding we can think of. 

In addition to sheer quantity, many applauded the sector’s nimble response, which one March 2020 op-ed described as “responsible, flexible, agile and adaptive.” Our own analysis in August discussed the sector’s nimble early giving, which amounted to loads of new emergency funding, extensive payout increases, and even some novel strategies like foundation bond sales to raise additional relief money. Corporations in particular were able to make big front-end commitments, as they are wont to do when disasters strike. 

But faster isn’t always better

Nevertheless, despite the many calls to action and individual actors who stepped up, analysis from Candid and the Center for Disaster Philanthropy suggests that COVID funding, overall, did not offer the kind of unrestricted support that many in the sector called for last spring. Other survey data did point to signs of greater flexibility than usual, including relaxed restrictions and timelines on existing grants from large funders. But, as has always been the case, nonprofits still struggled to secure the cold, hard cash they needed.

Over the past year, we’ve run numerous articles on nonprofit sectors that have suffered a hollowing-out, including but not limited to many arts organizations, early-childhood care and education, and, in some cases, charities for women and girls. And even though the events following George Floyd’s murder set off a veritable tidal wave of racial justice rhetoric, Candid and CDP’s second report attributed a 25-point jump in funding for BIPOC communities in the U.S. “almost entirely” to a single person: MacKenzie Scott. 

The hard reality is that while COVID philanthropy’s promising start was far more than lip service, providing for urgent needs during a critical moment, an argument can be made that until the sector accepts the need for a continual crisis footing—and comes to terms with its own complicity in a failing system—it won’t make meaningful headway against the problems it wants to solve. 

As Ryan Schlegel of NCRP put it in an unstinting op-ed for IP, “Many of the sector’s core tenets—perpetual growth, long strategic time horizons, the unassailable legitimacy of charity, the fundamental stability of the American democratic experiment and others—have been badly corroded over the last few years or never really held much water to begin with.”

Intersectionality is everything

Intersectionality and the need to “break down silos” have long been philanthropic buzzwords, particularly among those with a progressive bent. But for many donors and philanthropy professionals, lived privilege makes it hard to get a visceral sense of how society’s inadequacies and inequities combine to trap some people and uplift others. One benefit of the COVID year, if you can call it that, is that more people got a sense of the blurry boundaries between different areas of need—program areas, if you will—a liminal space that less fortunate people live in all the time.

Racial justice and equity has been a powerful entry point into that conversation, with the pandemic laying bare racial disparities in health, wealth, employment, criminal justice and much else besides. Those disparities intersect with those facing women, immigrants and people with lower incomes, along with other groups, shedding light on crises of inequality that predated the pandemic and will still be there when it’s gone. 

It’s OK just to give people money

As a corollary to calls for greater flexibility and fewer restrictions on organizational grantees, COVID prompted a lot more direct aid to individuals and families, often in the form of cash. This marks a significant break from the pre-pandemic norm, in which direct giving was mostly confined to scholarships and fellowships. Now we’ve seen a whole slew of nonprofits—from worker advocacy groups to Google.org—funding and administering programs to give hard-hit people what they say they need most.

One longer-term consequence of this attitude shift could be an increased acceptance of the need for ramped-up government aid. The $1.9 trillion COVID stimulus bill now on its way to President Joe Biden’s desk represents a New Deal-esque expansion of federal benefits, and it’s widely popular among the American public. Though they’re still far from becoming law, ideas like guaranteed income have also moved a lot closer to political reality lately, with prominent funders in their corner. 

The super-rich are still (mostly) stingy

Relative to their wealth, the nation’s richest are far from its most generous givers. The pandemic hasn’t changed that. Our analysis of the “philanthropy scores” Forbes assigns to its list of the 400 wealthiest Americans revealed a mostly reticent bunch of billionaires whose massive gains in net worth during the pandemic did not yield much in the way of increased giving. The problem of the stingy billionaire was already in the mix well before COVID-19, but the pandemic makes it doubly damning. 

To be fair, there have been exceptions. First and foremost is MacKenzie Scott, whose groundbreaking $6 billion in money out the door in 2020 included $4.2 billion in grants for COVID relief. According to the latest CDP/Candid report, Scott’s giving amounted to an eye-popping 74% of COVID funding from high-net-worth individuals in 2020. The only other billionaire in the ballpark is Jack Dorsey, who pledged $1 billion to COVID relief efforts through his giving vehicle, the somewhat inaptly named Start Small. 

We’ve cited Scott and Dorsey (along with Jeff Bezos for climate) quite a bit in our speculations about a potential “apex donor” paradigm of massive grants, few restrictions and low overhead. But it’s pretty disturbing that only two super-rich Americans pledged over $1 billion toward COVID relief during a pandemic year that has seen U.S. billionaires as a class gain over a trillion dollars in net worth. If COVID doesn’t make them pitch in, what will? That is, aside from government regulation.

Good signs for funder organizing and collaboration

On a happier note, COVID has given rise to a wide array of collaborative funding vehicles and organizing efforts. These range from national pooled funds drawing the support of major foundations and individual donors to the most modest local relief funds pooling three- and four-figure contributions. 

The pandemic year also saw plenty of pooled and collaborative funding efforts arise for other priorities like racial justice organizing and democracy protection. I should note that the nonprofit professionals we surveyed in 2020 were not upbeat about the idea that funder collaboration is making gains. Nevertheless, donor organizing as a strategy is very much in vogue among progressive boundary-pushers like Farhad Ebrahimi, Regan Pritzker and Leah Hunt-Hendrix.

Forget big philanthropy for a second—what about small philanthropy?

Specifically, what about the kinds of giving that regular folks are prepared and eager to lean into during tough times—small donations or other acts of kindness to help out struggling family members, friends or neighbors? The explosion of need during the pandemic has triggered a corresponding wave of goodwill from those with a little extra time or money to spare. 

Modest forms of local aid and mutual support have always been integral to the civil society philanthropy claims to support. While Americans’ response to the pandemic has not always been pretty, we have witnessed an outpouring of empathy and neighbor-to-neighbor assistance, including volunteering, cash and food donations, even community fridges. One interesting path forward for bigger philanthropies would be to figure out how to fund or otherwise support these ground-level charitable efforts as they emerge. 

Another somewhat related issue is mental health, which has understandably plummeted during COVID-19. A 2020 guest post asked what would happen if a lot more funders stepped up on mental health, arguing that a greater philanthropic commitment to emotional and mental wellbeing “is a critical stepping stone toward strengthening our society’s resilience and recognizing our common humanity.” If the pandemic era has taught us the need for empathy and human connection, greater investments in mental health seem like a step in the right direction.

This story isn’t over

Like our predictions at the start of 2020, the points above are speculative and very much subject to change by major events. Unlike in January 2020, we now know what at least one of those events will be: the end of the pandemic. It’s hard to predict how philanthropy will fare in the post-pandemic era, and whether these trends and lessons will hold. Nevertheless, I think we can be fairly certain that the pandemic will leave a mark, and that many aspects of the old normal will not return. 

One reason for that is the fact that the potential energy for change was already building up well before the pandemic. Though the process can take years, sustained rhetoric does often manifest in change as norms shift and people get used to talking about things in a different way. The addition of new voices to the table and the frenetic pace of internet conversation have also sped calls for reform. 

Let’s not forget that the philanthropy and nonprofit world isn’t quite as sacrosanct as it used to be. Pandemic relief may endear grantmakers to some, but the wider backlash against extreme wealth and perceived elitism continues to grow on both sides of the political aisle. If the sector doesn’t adapt to fit the post-pandemic norm—whatever that ends up being—it may find itself forced to.