Due to the COVID-19 pandemic, many philanthropists are rethinking their commitment. How can they use their funds to achieve maximum benefit?
Le Parisien, a family-run restaurant in Manhattan, has launched a GoFundMe campaign to raise $20,000 to help its employees and their families during the Covid-19 crisis. Former New York City mayor Michael Bloomberg has given $6 million to World Central Kitchen to supply meals to frontline health workers. And the Coalition for Epidemic Preparedness Innovations has issued an urgent call for $2 billion to develop a Covid-19 vaccine.
These initiatives show the extreme diversity in the type and scale of funding needs that have emerged since the Covid-19 outbreak. But with pandemic causing mass unemployment in rich nations and chaos in developing countries already grappling with conflict or famine, philanthropists can be forgiven for feeling overwhelmed.
For those who want to ensure their charitable dollars have maximum impact, the pandemic has prompted tough questions: With the needs so great, where do you start? If you’ve been funding the arts, should you change course and focus on global health or poverty?
It’s important not to rush into a decision, says Natalie Ross, vice president of resource development and strategic opportunities at the US-based Council on Foundations. Ross points out that while the arts might now seem like a less urgent cause, working artists are among those struggling financially. "Take the time to pause," she advises. "The reality is that the scale of this disaster means that almost every person is impacted in some way."
Many philanthropists are starting at home, says Greg Ratliff, who manages client engagements individual, family and corporate donors at New York-based Rockefeller Philanthropy Advisors. "I have so many donors who want to give to their local restaurants," he says. "They go there three times a week and don’t want to see them go out of business."
Philanthropists are also making adjustments to the way they make their grants, such as allowing non-profits to be more flexible in how they spend the money. In the US, for example, 660 funders have signed a pledge in response to the Covid-19 crisis whose promises include converting project-based grants to unrestricted funds and making any new grants as unrestricted as possible.
"At the core of the pledge is the idea of trust and empowering recipients," says Ross. "It’s reducing the restrictions and the element of control around reporting and site visits to enable grantees to determine what is needed."
Giving more is also an option. In the US, where to qualify for tax relief, foundations must give away at least 5 percent of their endowment’s value annually, some are increasing this percentage.
In April, the Wallace Global Fund, founded by former US vice president Henry A. Wallace, announced that in 2020 it will spend 20 percent of its $100 million endowment to support of Covid-19 relief and recovery efforts and has calling on other foundations follow its lead.
Meanwhile, the pandemic is increasing the popularity of another philanthropic approach—collaborative giving. Recent years have seen more philanthropists pool their charitable funds with others in order to have greater impact. Now, given the scale of the funding needed to address the Covid-19 pandemic, this form of giving has become much more relevant.
"In normal circumstances I’d recommend joining a community versus going it alone," says Natalie Rekstad, founder and CEO of Black Fox Philanthropy, a fundraising strategy firm. "Now it’s vital."
This approach has another advantage. It enables donors to share expertise and resources when it comes to identifying the most effective non-profits working on any given challenge to doing the due diligence on prospective grantees.
One example is the Maverick Collective, part of global health non-profit Population Services International (PSI). Members of this network of female philanthropists make a seven-figure commitment over two-to-three years to invest in projects that benefit girls and women in the developing world.
However, as importantly, they also share knowledge, experience and best practices. "Whether you’re 23 and just staring out in your philanthropy or 63, with a lifetime of philanthropic giving behind you, we find a deep mentorship that is cross-generational," says Rena Greifinger, who leads PSI’s Experiential Philanthropy division, including the Maverick Collective and the MaverickNext fellowship.
Greifinger points to another powerful benefit to collaborative giving. "We see women making lifelong friendships," she says. "Collective philanthropy is not only smart but, if it’s done right, it can provide some of the most fulfilling and enlightening experiences of your life."
About the LGT Venture Philanthropy Foundation
LGT Venture Philanthropy (LGT VP) is an independent charitable foundation striving to improve the quality of life of disadvantaged people, contribute to healthy ecosystems, and build resilient, inclusive, and prosperous communities. LGT VP deploys philanthropic capital to organizations with effective, innovative, and scalable solutions to social and environmental challenges, thus directly contributing to the Sustainable Development Goals. The foundation primarily supports organizations based in emerging markets, focusing on high-impact sectors, including education, health, and environment. LGT VP is the venture philanthropy arm of LGT Group. LGT Group is a leading international private banking and asset management group that has been fully controlled by the Liechtenstein Princely Family for over 80 years.
Further information on LGT VP can be found on the LGT philanthropy website.