How are philanthropists responding to the Covid crisis?

A summary of recent events and the results of Philanthropy Australia’s survey of grantmakers

Everyone has been in plenty of webinars these past few weeks as we all strive to get a handle on what is happening in the not for profit community and the best ways to move forward. It seems not surprisingly that different sectors are affected very differently from one another, with some organisations seeing an upsurge in donations, including major gifts, while others are talking about drastic drops in income.

Meanwhile, members of the Neilson and Ainsworth families and other philanthropists stepped in to offer multi-million dollar support to save Sydney’s Carriageworks from collapse, Philanthropy Australia has partnered with Australian Communities Foundation to create a Covid-19 national funding platform where charities can post their costed projects to be considered for funding, and a group of arts and culture philanthropists combined under the auspices of the Philanthropy Australia Arts Funders Network to provide a $1.5m support program of smaller grants to artists and arts workers.

In his April report  for JBWere, Where to From Here: the outlook for philanthropy during Covid-19, John McLeod predicts that after growth of almost 5% in each of the last two years, total philanthropic giving in Australia will fall by about 7% in 2020, and by a further nearly 12% in 2021, taking the total figure back to 2012 levels.  Specifically in relation to foundation and structured philanthropy, he suggests that the main downward effect of giving is likely to be seen in the year following a major equity market fall, and also suggests that, as in 2008, we will see a slowing in the rate at which new PAFs are established.

This week, Philanthropy Australia surveyed their grantmaking members on their response to the challenges of Coved-19, with some very interesting results.
 
Of 101 surveyed, 88% were changing their granting approach in response to C19; responses include increased flexibility, untying restricted funding, increasing support, and establishing dedicated C19 grant programs
 
Specific initiatives have also included funding additional capacity-building in digital, supporting advocacy work for vulnerable groups, providing expertise and mentoring, and offering non-financial support
 
Interestingly, it isn’t all going to existing partners – 60% say they are offering grants to new partners around C19, with nearly 40% saying they will increase 2019-20 funding amounts and less than 8% saying they will decrease funding. The picture for 2020-21 is less clear, with the majority saying either that funding will stay at the same level or that they have not yet considered this question. 22% are saying they will increase funding in 2020-21.
 
It seems likely that some of the increase will be related to the actions government has taken to encourage PAFs and PuAFs to give more than their required donation percentages, in return for the ability to proportionately decrease future distributions, and does raise the question of what the longer term effect will be on distributions, especially as these foundations will expect that their investment income will be affected by any economic downturn.
 
Related to this, 30% of respondents say they have already decided to use, or are considering using, capital to offer loans or other social finance options to increase support.
On the question of whether the value of their corpus has declined since C19, 32% say that it has, and it will result in lower distribution levels, although a higher number, 51%, said it has, but they will maintain giving levels.
Both of these things have the potential to affect longer term levels of giving.
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Anecdotally we’re hearing that some organisations are holding back from asking for gifts, especially major gifts, often due to board members thinking it is inappropriate right now; at the same time we are hearing great success stories from those organisations who think about their core purpose and stay in clear and open communication with their supporters about the needs they are addressing.
 
We’ve even heard that some major donors who will never accept invitations to physical events are showing up to Zoom meetings or engaging in long and productive phone conversations. One of the really interesting outcomes from the present time will be to see how far innovative organisations maintain the new and productive methods they’ve come up with to keep fundraising.  And the thing we do know, is that it’s vital to keep fundraising.
 
It may be a difficult time to recruit new donors unless you are an organisation with a purpose directly related to the current crisis, but it’s more important than ever to maintain your links to existing supporters, whether they are individuals or foundations, and to deepen your understanding of who your supporters are.
 
​Links
Philanthropy Australia
JB Were
Carriageworks story
https://communityfoundation.org.au/covid-19
https://myerfoundation.org.au/news/national-assistance-program-for-the-arts/
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