How Corporate, Institutional and Individual Philanthropy Has Evolved Since the COVID-19 Pandemic
The COVID-19 pandemic tested the core principles of the corporate, institutional and individual philanthropic sectors, as nonprofits around the world had to adjust to a rapidly-shifting economic environment. Adversity, however, created new opportunities. With deep instability and rapid change catalyzing a secular pivot within the philanthropic sphere, charities have met growing creativity among donors with a flexibly resilient response focused on fostering deeper relationships built on long-term trust.
The pandemic’s sudden onset brought immediate impacts and shifts to the philanthropic landscape. By March, 95% of charities surveyed were based in countries that had imposed pandemic restrictions and two-thirds had already seen declines in funding as individual donors lost income or started to save for future needs. Not surprisingly, 97% began projecting year-over-year decreases in funding and many expressed serious concerns about operational continuity. Most organizations had never dealt with a crisis of this magnitude and needed help adapting their operations during the disruption while continuing to focus on their intermediate- and long-term goals. We were encouraged to have seen that our donors — and philanthropists across the world — remained committed to effective change and engaged in reformulated strategies for maximizing responsive and effective donor responses.
Donor Flexibility During the Pandemic
Fortunately, corporate donors remained resilient during the pandemic, giving more unrestricted funding, lengthening reporting cycles and deadlines and, consequently, expediting many priority grants. This enabled nonprofits to survive and thrive during the downturn’s most challenging times.
By May 2020, two-thirds of charities told us that they had a critical need for unrestricted funding, but support from individuals started to drop sharply as donors lost jobs, were furloughed or started to save funds in anticipation of economic turmoil. However, an environment of shared adversity also forged closer donor relationships as all hands rallied together to fight the virus and its community impacts.
In June, 72% of corporate donors reported increased giving in response to the pandemic. They understood the vital role of organizational resources in meeting needs when individual donor resources were under stress. Giving strategies adapted flexibly, moving to broader, issue-based foci, giving more grants, funding new grantees and providing evidence-based, targeted rapid relief funds during a pivotal inflection point for philanthropy.
The Future of Philanthropy
The crisis forced everyone to rethink how they give and receive charitable aid, which led to a more flexible and equitable approach to giving funds. In April 2021, 90% of charities surveyed reported that their donors had offered them greater flexibility. While half reported better preparedness for the next crisis, these survey results underscore the potential for growth in philanthropic resiliency for our next time of shared need.
The pandemic did impact the philanthropy space, and organizations took a turn for the worse. However, it forced charities and donors to show their resilience during a crisis, which led to a positive outcome of a stronger and more resilient global charity sector that is prepared for any challenge moving forward.
Ted Hart is the president and CEO of CAF America, president of CAF Canada and CEO of CAF International. As an internationally recognized speaker, he has more than 35 years of experience in advising philanthropy and is an expert in regulatory frameworks governing both domestic and global grantmaking and risk management. Since being appointed president and CEO of CAF America in 2012, he has transformed the organization into a donor-advised fund sponsor that now provides more than $725 million per year grant-making intermediary service from the U.S., U.K. and Canada to more than 135 nations worldwide.
Ted is the co-editor of the book “Cross-Border Giving: A Legal and Practical Guide” and has co-authored eight published books on philanthropy. Ted is a member of the Association of Fundraising Professionals and the International Association of Advisors in Philanthropy and a Certified Diversity Executive.