Funders Must Take Swift and Unprecedented Actions to Support the Nonprofit Sector
There has been much written in the past few days about how foundation and corporate funders can best support their grantees and community-based emergency response initiatives in light of the COVID-19 pandemic. As of this writing, 512 funders have signed on to a Council on Foundations’ pledge to act “with fierce urgency to support our nonprofit partners as well as the people and communities hit hardest by the impacts of COVID-19.” Signatories to the pledge have agreed to a set of eight actions designed to support grantee organizations through the crisis, which include:
Loosening or eliminating restrictions on current grants and making all new grants unrestricted, given grantee organizations maximum flexibility to spend funds as needed.
Identifying and supporting organizations most affected by the pandemic, including those that have not previously received funding from their organization.
Postponing reporting requirements, site visits, and other burdens placed on grantees.
Communicating openly and honestly with grantees about decision-making processes, listening to grantees, community organizations, and stakeholders about their needs and experiences and most importantly, acting on their feedback.
Supporting grantees that are advocating for crucial public policy changes to address the pandemic, including expansion of economic relief for working people and families, access to paid sick leave and affordable health.
In response, the Center for Effective Philanthropy issued a statement applauding the Council on Foundations’ pledge, but pointing out that it doesn’t go far enough to get emergency funds to the people and organizations that need them now. “Deploying philanthropic assets to strengthen vital organizations doing crucial work in extremely challenging circumstances is more important right now than preserving endowment capital.”
There is no doubt that philanthropic funders are stepping up in new and unprecedented ways to address this crisis, which may involve making dramatic shifts in their grant-making priorities, policies, and procedures. If all of this seems overwhelming, here are some immediate and concrete steps that your organization can take:
Review your current ongoing grant agreements. Look for opportunities to lift restrictions on project-based grants, waive or postpose reporting requirements, and accelerate payments under multi-year grant agreements.
Look at your grant-making policies to determine whether any changes are needed to make the type of grants that this crisis requires. This can generally be accomplished with a board or committee resolution.
Begin issuing unrestricted emergency grants based on a simplified application process. This means accepting grant applications by email or online with minimal attachments – many people working from home don’t have access to a printer and cannot send applications by mail. Understand that it may be impractical for grantees to get multiple signatures from directors or officers.
Review your investment policy and determine if any changes are needed to increase the amount of funds allocated for expenditure from your endowment this year. Again, this can generally be accomplished by a resolution of the board or the investment committee. Your endowment is your rainy-day fund, and it is raining like we’ve never seen before. Do not hesitate to spend down your endowment fund.
Review any donor-imposed restrictions on funds held by your organization to determine if any portion of those funds can be deployed now. If your organization does not believe that such restricted funds can currently be deployed, there are legal avenues that may be available to lift or modify the restrictions.
If you have any questions or would like support reviewing and updating your grant-making and investment policies, please contact Carly Leinheiser, Partner, Bromberger Law, at email@example.com.