Study Finds Large Funders Became More Flexible During COVID-19. Will it Last?
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New Yorkers wait in line at a food pantry in Queens over the summer. Ron Adar/shutterstock
Throughout 2020, as philanthropy has responded to the COVID-19 pandemic, we’ve reported frequently on many grants for social services, vaccine research, and more. But a larger question remains: Have the biggest givers fundamentally changed how they conduct the business of grantmaking, including their relationships with grantees?
A recently released study by researchers at the University of Washington crunched data collected from nearly 500 of the country’s largest funders to characterize how foundations are shifting strategies, and engaging grantees and stakeholders. Also in focus is whether the pandemic has sparked increased foundation commitment to communities most sharply affected by COVID-19, and whether these large funders have become more willing to collaborate across organizations and sectors.
“(T)he dramatic growth of foundations and their endowments in recent decades has intensified charges of plutocracy—the claim that foundations are more interested in protecting their power and privilege than in contributing to the public good,” wrote the study’s three authors. “The COVID-19 crisis has brought this critique into sharp focus, leading to the question, ‘How are large foundations acting to stem COVID-19’s impact and help in the process of recovery?’”
The paper, “Philanthropic Foundation Responses to COVID-19,” was co-authored by Emily Finchum-Mason and Kelly Husted, Ph.D. candidates at the University of Washington’s Daniel J. Evans School of Public Policy and Governance, and David Suárez, an associate professor.
Their study leveraged data collected during a broader research effort conducted by the Ford Foundation into participatory grantmaking—a growing push to yield philanthropic decision-making power to the communities that funders seek to serve. (The broader study of participatory grantmaking has not yet been released.)
As the authors note, compared to other wealthy countries with broader publicly provided social services, the United States is uniquely reliant on philanthropy to support nonprofit human services, the arts, science and research, and more. But the importance of the largest foundations and individual mega-donors, along with their ever-expanding wealth, has prompted public policy scholars and other critics to question whether funders are wielding too much control over the communities they purportedly serve.
Data suggests foundations have indeed acted decisively to address needs during the pandemic, according to the authors. This is, of course, not an unexpected conclusion to draw—throughout 2020, large philanthropic organizations have made many dozens of swift and substantial funding moves, suggesting that American philanthropy has acted in response to emergency needs. For example, five of the country’s largest foundations—Ford, MacArthur, W.K. Kellogg, Mellon and Doris Duke Charitable—pledged dramatic increases in COVID-related funding. Community foundations, too, were early responders.
At the same time, a report earlier this year from the Center for Disaster Philanthropy and Candid found that while the philanthropic response was indeed robust, there was room for improvement in terms of grant flexibility and support for groups led by and explicitly serving people of color.
For this latest study, the authors used survey data from about 500 of the largest private and community foundations in the U.S. by assets. They looked at four questions surrounding the issue of COVID-19 response, seeking to understand how funders are evolving in four key areas:
Giving strategy.
Relationships with current grantees.
Giving with respect to various higher-risk groups (such as seniors, Black, Latinx or Native American communities, those with job insecurity or homeless, among others).
Collaborations with other organizations, including government entities, international agencies, companies, and others.
Notably, while most respondents established new funds for COVID-19 issues, some of the pandemic response appears to be previously budgeted grantmaking with a new label, suggested the writers. “Our survey data show that only about a third of foundations that reported establishing a new fund also reported increasing their payout percentage, suggesting that about 67% of foundations are not paying out more money than they otherwise would have.”
At least as important as grantmaking dollars, though, is the nature of grantee relationships and agreements. A substantial 75% of the foundations surveyed relaxed restrictions on grants, making it easier for recipients to use the funds to meet emergency needs.
According to survey responses, many funders shifted additional focus to high-risk communities as the pandemic continued, prioritizing low-income people, Black, Latinx, and immigrant communities. But fewer than 19% of foundations said they prioritized Native American communities in their COVID-19 response—a finding that underscored the longstanding under-addressed needs among these communities.
Also encouraging was the survey’s finding on collaboration. Big foundations are working together more—with each other, with philanthropic associations, and with government entities—to pool funds and cover the last mile into target communities.
Overall, the study suggests a laudable financial response to COVID-19, along with other positive operational and strategic changes by many of the largest funders. But as the authors point out, the study may be biased in a number of ways, including the fact that funders with more aggressive responses may have been more eager to respond to their survey. They also note tha even though foundations indicated they are prioritizing vulnerable communities, it’s not clear what that prioritization looks like in practice, or if funds are going to groups led by people of color. “Despite these limitations, the study provides evidence that many foundations have been responsive to the pandemic and lays the foundation for future research,” they wrote.
On that note, the authors couldn’t say whether this is a true shift in practice within the sector, or just a blip in a unique moment in history. “Whether the COVID-19 crisis will serve as a catalyst for institutionalizing these changes in foundation–grantee relations remains an open question.”
