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The Role of Philanthropy During the Coronavirus Pandemic

by |March 24, 2020

In crisis, we often see philanthropy in action, such as donations following a hurricane or earthquake. Individuals band together, and contribute to relieve daunting circumstances. Philanthropic institutions — grantmaking foundations — also tend to direct some attention to respond to crises.

hands with latex gloves exchanging money

To combat the impacts of COVID-19, philanthropy must be called into action, but perhaps on a different scale than ever before. Photo: Pexels

At this moment, we are perhaps seeing a crisis like none other in modern history — a global pandemic that is grinding major cities and entire countries to a halt. It is radically changing behavior. An immediate economic impact is already apparent, as so many have lost their jobs due to halted economic activity. The long-term effects of COVID-19 on public health and the economy are beginning to materialize. One can only imagine how lifestyles might change substantially for years to come.

Here again, philanthropy must be called into action, but perhaps on a different scale than ever before. As talks of a potential $2 trillion government relief package for the U.S. progresses, what exactly is the role of philanthropy in society at times such as this? The hundreds of billions of dollars in U.S. philanthropy can make some difference. But it seems these resources would have to be deployed carefully and strategically in order to add value.

First and foremost, the role of philanthropy is not to replace government. At times such as this, it is very apparent that government has a unique and vital role that is irreplaceable. But why do we even have philanthropy? Shouldn’t philanthropic resources simply be converted into taxes that help government do its job better? Indeed, those who are required to pay taxes should pay their fair share. Tax evasion by the wealthy is a pressing problem that must be addressed. However, philanthropy can play roles that transcend what we might expect from government. In an effective democratic society, philanthropy should in fact complement government action and resources. This reality becomes apparent in crises.

In observing some of the myriad activities that have been underway in philanthropy during the COVID-19 pandemic, a number of roles are evident.

Philanthropy can bring people together, and stimulate the human spirit.

Individual acts of kindness are often characteristic in moments of crisis across all walks of life. It is always important to recognize how people help each other in moments of need. We often think of the wealthy when discussing philanthropy. The truth is that all persons are capable of some form of philanthropy.

In Macomb County, Michigan, a restaurant prepares free bagged lunches for children and families who need food during the outbreak. One landlord in Portland, Maine, is waiving April rent for his burdened tenants.

Some communities are pooling fiscal resources to aid marginalized populations whose vulnerabilities are exacerbated by coronavirus impacts. The Native American Community Response Fund (COVID-19), launched by several community organizations, is fueled by financial donations from community members and civilians. These donations are used to help support Native American families and communities made even more vulnerable by the coronavirus.

Across communities, grassroots groups have risen in response to the crisis, offering a space where residents can offer and ask for help from others in the community. People are giving away food, offering to foster animals, picking up medication for others, and more. This list contains the vast number of regional groups across the U.S. and internationally, and across a broad range of issues.

Philanthropy can champion, support, and strengthen nonprofit organizations.

The nonprofit sector plays a unique role in democratic societies in particular. Nonprofit organizations are positioned to represent civil society. They can fill voids that are not sufficiently addressed by the public or private sectors. They can also hold those sectors accountable. They can advocate regarding important issues and give voice to communities that are often underserved. Nonprofit organizations rely on philanthropy. They especially rely on private philanthropy for resources that are flexible enough to help them focus on their mission and build the capacity to achieve their goals.

In response to the coronavirus pandemic, a number of foundations have signed a pledge to ease restrictions on recipients of their grants. This pledge commits signees to numerous actions that allow grantees flexibility in their crisis responses and provide support to partners and communities. The foundations pledge to alleviate logistical and reporting demands for grantees during the COVID-19 crisis period. Signees also pledge their aid outside the direct grant-making processes. They aim to support community-based emergency response funds and efforts towards equitable emergency response action that addresses the disproportionate health and economic impacts of COVID-19. During this unprecedented time period, foundations sign this pledge to ask less of but do more for their grantee partners and communities.

Philanthropy can raise crucial concerns, such as equity, that might get overlooked.

In the United States, philanthropy is becoming increasingly organized. Numerous associations (often known as philanthropy-serving organizations) have been created in recent decades. These organizations represent particular regions, populations, or issues in philanthropy. A number of these associations developed a statement highlighting the importance of issues such as racial equity, which might not receive attention in the midst of a crisis. Crises actually tend to exacerbate existing inequities. Those who lack access have even less in crisis. Those with limited resources are least able to make it through a crisis.

In this recent statement, philanthropy is coming together to shine a light on these complexities. The coronavirus outbreak raises concerns regarding equity for the elderly and disabled, those without easy access to health care, those without sufficient health insurance coverage, persons living in close quarters, low-wage workers, non-salaried workers, communities of color, and more. Such populations are left vulnerable and less able to cope with COVID-19 illness. This is why philanthropy’s response to the crisis requires considerations of the communities that will most likely suffer disproportionately during this crisis due to the exacerbation of historic and systemic issues.

The statement suggests some actions for funders to ensure that equity is not overlooked during emergency response. The deployment of rapid-response funds allows organizations to quickly respond to immediate multisectoral challenges. Foundations can also provide financial resources in areas where workers will be most impacted by reduced income due to the crisis. As community leaders, foundations should also work to dispel misinformation while advocating for equitable governmental emergency response. It is important for philanthropy specifically to play a role as an equitable responder because of its close ties in communities and its investment in long-term solutions.

Philanthropy can help fortify and rebuild communities.

While this is a global crisis, it hits people hardest in their communities. Many foundations, such as community foundations and others, are designed to strengthen their localities. In a crisis such as COVID-19, locally focused foundations are faced with tremendous needs. There are far too many examples of recent community-based philanthropic activities to mention here, but here are a few:

The COVID-19 Response Fund, hosted by the Seattle Foundation, aims to provide flexible resources to ‘front-line’ community organizations that work with populations disproportionately affected by the COVID-19 crisis in the Puget Sound region of Washington state. Created through a coalition of philanthropy, government, and business partners, the fund looks to address response capacity to COVID-19 consequences in health and economic sectors. As of March 19, the fund total amounts to $13.3 million.

The Brooklyn COVID-19 Response Fund, created by the Brooklyn Community Foundation, proposes to give resources to borough residents who are disproportionately vulnerable across health, economic, and social factors to COVID-19 impacts in the immediate and long-term. The fund’s first step is to issue grants to community partners that provide front-line services to such vulnerable populations, especially communities of color.

Locally focused foundations are not the only philanthropic responders creating community emergency funds. The Carnegie Corporation of New York, a foundation both national and international in its grant-making, is hosting the NYC COVID-19 Response & Impact Fund. Providing $75 million in grants and loans, this fund supports NYC nonprofit organizations in their responses to emerging needs during the coronavirus crisis, as well as help them cover financial losses and continue their work.

Key in the creation of each of these emergency funds is fluidity — the partnering foundations recognize the rapidly evolving nature of the COVID-19 crisis and the need to subsequently adapt the structure and functions of the funds in order to respond to community needs.

This is only a snapshot of the breadth of activity that has taken place over recent weeks; and this is concentrated in U.S. only. Certainly, the philanthropic industry is more robust in the United States, but there is much more to be said about how philanthropy is transpiring in all corners of the world during this pandemic. But it is important to reiterate that philanthropic acts in a vacuum can accomplish only so much. In order to demonstrably help communities navigate this crisis, philanthropy will have to be coordinated with many other partners as well as effective and consistent policy.

Long-term challenges

In the midst of these various contributions, philanthropy is far from perfect. While there is no direct modern comparison to COVID-19 because of the magnitude of its impact, philanthropic responses to disasters in the past have often not, shall I say, finished the job. In many instances, philanthropic responses to disasters have been immediate, and relieved shorter-term crises without necessarily changing underlying dynamics. For example, philanthropy to relieve disasters in developing countries has often not contributed to longer-term infrastructure or left behind significant locally grown and controlled philanthropy. Philanthropic efforts such as TrustAfrica were created to address such dynamics, as discussed in my latest book.

Furthermore, we should consider the nature of the current crisis that faces us. This is not a disaster concentrated in a particular geographic setting. It is truly global. Additionally, its economic impact is evident in a downward-spiraling stock market, which directly affects foundation endowments. As foundations are required to spend a particular percentage of their assets per year, will they shrink their spending in accordance with their financial losses? Lower income and vulnerable communities and nonprofit organizations will have increased needs in the wake of the recession (or worse) left behind by COVID-19. Will foundations and donors increase their giving to meet this challenge even with reduced assets? We will see. This is the challenge ahead for philanthropy. Its role is significant, and always in need of improvement. The years to come will bring the opportunity for philanthropy to rise to an unprecedented occasion.

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