Progress is Relative: Assessing Philanthropy’s COVID-19 Response in 2020
/
The Tarrant Area Food Bank in arlington, Texas, in November. Sara Carpenter/shutterstock
In August, the Center for Disaster Philanthropy (CDP) and Candid published a report analyzing COVID-related giving from foundations, corporations, high-net-worth donors and selected donor-advised sponsors in 38 countries. The authors found that funders gave $11.9 billion worldwide in the first half of 2020, blowing away responses to other recent disasters.
At the time, I assigned (somewhat subjective) letter grades based on the report to philanthropy’s efforts in addressing three key priorities we identified in the early days of the pandemic—some agreed-upon tenets of pandemic-era giving that had clearly emerged in philanthropic discourse. The report card was a mixed bag. Funders got an “A” for quickly shoveling an unprecedented amount of cash out the door and a “D-” for earmarking a mere 10% of total dollars to communities of color globally in the U.S. and 5% when including global funding.
Today, CDP and Candid have released a follow-up report looking at philanthropy’s total pandemic-related giving across 2020. On the surface, it’s a more encouraging read.
The CDP and Candid report identified more than $20 billion awarded for COVID-19 globally in 2020. Support for BIPOC communities rose from 10% to 35% in the U.S. and 5% to 23% globally. However, the authors attributed this increase almost exclusively to one individual—you guessed it, MacKenzie Scott. Giving also increased for people with disabilities (1% to 8%) and increased slightly for women and girls (3% to 4%), while support for immigrants and older adults remained flat at 2%.
“The truths of this moment in time have given rise to hard conversations within philanthropy,” wrote CDP President and CEO Patricia McIlreavy in the study’s foreword. “No longer is it sufficient to fund Band-Aid responses to a disaster without exploring root causes—specifically, the structural inequities and systemic discrimination that result in disproportionate impacts on marginalized and underserved communities.”
As with CDP and Candid’s mid-year report, I’ll be using the new report to grade philanthropy on critical COVID-era priorities. But first, let’s take a quick look at some of the study’s high-level findings.
Key takeaways
The report’s data set includes pledges, cash donations and in-kind contributions in Candid’s database as of January 20, 2021. The set also includes contributions made by donors to other donors, so there’s some double-counting of dollars, the report states.
In the first half of 2020, health organizations received the most support (33%), followed by public safety organizations (29%). In the second report, human services organizations, which include food banks, United Ways and YMCAs received the most support (28%), followed by health organizations (26%).
Here’s the breakdown of the grantmaking based on funding source:
Corporations/corporate foundations—$9.4 billion (44%).
High-net-worth individuals—$5.8 billion (27%).
Independent foundations—$4.7 billion (22%).
Public charities—$650 million (3%).
Community foundations—$543 million (3%).
Operating foundations—$330 million (2%).
Some additional highlights:
While corporations and high-net-worth individuals provided the most funding, they gave 5% and 1% of total gifts, respectively, indicating large donations.
Community foundations awarded the largest percentage of gifts (54%). The median award size for community foundations was $10,000, compared with $250,000 for corporate donors.
The top five independent foundations by total funding were the Bill & Melinda Gates Foundation ($1.3 billion), the Rockefeller Foundation ($1.1 billion), the Andrew W. Mellon Foundation ($215 million), Open Society Foundations ($200 million) and Bloomberg Philanthropies ($166 million).
CDP and Candid identified an additional combined $14.6 billion donated through the donor-advised funds of Fidelity Charitable, Schwab Charitable and Vanguard Charitable.
The report provides recommendations for grantmakers to ensure equitable recovery from COVID-19, such as “increase your giving and make unrestricted and flexible grants” and “explicitly target funding to communities that are systematically marginalized and disproportionately affected by COVID-19.”
Now, let’s see if philanthropy improved its performance in the second half of the year. To recap, back in August, we boiled down these three core action items based on the flurry of punditry that emerged when the pandemic hit. I’d say they still hold up as best practices for COVID philanthropy. But did funders follow them?
Action item No. 1: Quickly move lots of money out the door
In the early days of the pandemic, experts asked funders to dial back the paperwork and open the spigot. They did. CDP/Candid’s August 2020 report found that funders’ $11.9 billion in COVID-related support far eclipsed the amounts donated to Hurricane Harvey ($343 million), the Australian bush fires ($152 million), and Hurricanes Irma, Maria and Dorian ($127 million, $68 million and $48 million, respectively).
The CDP/Candid report states that funders’ combined 2020 grantmaking of $20 billion and change was “nearly double the total reached from the first half of the year.” This implies that funders gave slightly less in the second half versus the first.
Corporate support fell from 66% in the first report to 44% of total COVID-19 funding in 2020. “This decline is to be expected, as corporations are typically among the first to publicly respond with pledges of support in the immediate aftermath of a disaster or crisis,” the authors wrote. High-net-worth individuals “stepped up to provide additional support,” but not quite enough, it appears, to match total giving in the first half of the year.
The scenario would be far bleaker were it not for Scott, whose $4.3 billion in giving accounted for an astonishing 74% of the $5.8 billion in high-net-worth individual support across 2020.
Previous grade: A
New grade: B
Action item No. 2: Pivot toward flexible support
Writing in IP last March, Edward W. Hazen Foundation CEO Lori Bezahler implored her fellow funders to convert grants to unrestricted general operating support. While we heard a lot of encouraging anecdotes about flexible funding, the numbers show her plea fell largely on deaf ears. The August CDP/Candid report found that only 3% of funding to organizations “was explicitly described as flexible or unrestricted.” (I gave philanthropy a “C+” at the time; in retrospect, I was too generous.)
The new report found that 39% of dollars and 21% of gifts to specified recipients were described as unrestricted or flexible. This constitutes progress, but again, Scott looms large. Her “very large, unrestricted grants accounted for much of this shift,” reads the report. “Excluding her grantmaking, flexible support reflected only 9% of all dollars awarded to named recipients—still an increase, but a more modest one.”
Corporations remain a stumbling block. The new report finds that Google was the biggest corporate funder. However, at least 23% of Google’s $1.15 billion in grantmaking consisted of $340 million in “in-kind” Google Ads credits to small and medium-sized businesses. ByteDance, the Chinese company behind TikTok, was the second-largest corporate funder, allocating $437 million. But at least 31% of that amount came in the form of ad credits on TikTok.
Brick-and-mortar companies didn’t need ad credits alerting Google and TikTok users that their businesses were closed. Nor does in-kind giving pay for rent, bills or salaries. “What companies need is cash,” said former Google executive Akhtar Badshah back in March. In contrast, Scott’s “large grants to 384 nonprofits in the U.S. were unsolicited and unrestricted,” the CDP/Candid report states.
Previous grade: C+
New grade: C
Action item No. 3: Provide more support for organizations serving BIPOC communities
Support for BIPOC communities rose from 10% to 35% in the U.S. and 5% to 23% globally, thanks to high-net-worth donors who designated a higher proportion of funding (44%) to this demographic compared to independent foundations (32%), community foundations (29%), public charities (21%) and corporations (11%).
The catch? You get one guess. The overall jump in giving for BIPOC communities “was almost entirely due to MacKenzie Scott’s grantmaking,” read the report. “There were only two high-net-worth donors in the data set who awarded grants designated for BIPOC communities: Colin Kaepernick awarded one grant, and MacKenzie Scott awarded the remainder.”
Excluding high-net-worth donors and looking only at institutional philanthropy, which CDP/Candid defines as corporations, foundations, and public charities, “the percentage directed to communities of color dropped to 13%,” the report reads. “Still, this is an increase from the 5% we reported in the first report.”
Old grade: D-
New grade: C
Bonus action item: Mega-donors need to step up
Last April, Jack Dorsey announced he would use $1 billion of his shares in Square to fund COVID-19 relief efforts through a newly formed limited liability company, Start Small. His announcement prompted some commentators to argue that his fellow billionaires weren’t doing enough to address the pandemic’s fallout. Nine months later, what’s their collective legacy look like?
According to the CDP and Candid, the top 10 high-net-worth donors by total 2020 COVID-19 funding are as follows:
MacKenzie Scott: $4.3 billion
Jack Dorsey: $1 billion
Jeff Bezos: $125 million
Jeff Skoll: $100 million
Nicky Oppenheimer (South Africa): $56 million
Johann Rupert (South Africa): $56 million
Mary Oppenheimer (South Africa): $56 million
Reed Hastings: $15 million
Patty Quillin: $15 million
Hugh Grosvenor (U.K.): $13 million.
To be clear, this list omits mega-donors like Bill Gates and Michael Bloomberg, who gave $1.3 billion and $166 million, respectively, through their foundations. Nonetheless, it’s hard to miss the significant drop-off in giving between Dorsey and Bezos.
In related news, on February 24, Americans for Tax Fairness reported that Bezos’s real-time net worth as of February 19, 2021 was $189 billion, up 68% from March 18, 2020. Gates’ net worth rose 26% to $124 billion, while Bloomberg’s wealth grew 14.4%, from $48 billion to $54.9 billion.
The 2020 COVID-related grantmaking of these three billionaires represented roughly 0.07%, 1%, and 0.3% of their respective fortunes as of February 19, 2021. On the other hand, Scott’s $4 billion in 2020 giving constituted a resounding 7% of her net worth ($57.4 billion). Our verdict on the philanthropic response from mega-donors not named MacKenzie Scott and Jack Dorsey? Not impressed.
Grade: D
