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Before the coronavirus began its march around the world, philanthropy to education was on track to exceed pre-Great Recession giving levels. Annual giving per student at independent schools had risen from $1,276 in 2009–2010 to a high of $1,650, according to NAIS’s Data and Analysis for School Leadership. As people lost jobs and the stock market faltered in the spring of 2020, advancement professionals feared the worst, gearing up for the kinds of losses they had faced in 2009. But unlike the Great Recession, parts of the economy rebounded quickly amid the pandemic, and many donors stepped up when schools needed them most.According to the Fundraising Effectiveness Project, a partnership of the Association of Fundraising Professionals and the Center on Nonprofits and Philanthropy at the Urban Institute, overall “charitable giving rebounded in the second quarter of 2020, boosting total giving in the first six months of the year by nearly 7.5% on a year-over-year basis.” The 2020 Fundraising Effectiveness Survey Q2 report also noted that the number of donors had increased by 7.2% compared with the same period last year—promising news as the number of donors had been steadily shrinking since the onset of tax reform in 2018.
GivingTuesday, held the Tuesday after Thanksgiving, also demonstrated the persistence of donors when times are tough. According to the GivingTuesday Data Commons estimates, there was a 23% jump in the number of people in the U.S. giving in 2020, donating a collective $2.47 billion—a 25% increase in total dollars over the previous year's efforts. Fidelity Charitable also reports that “it has distributed 32% more grants and seen a 20% increase in people setting up investment accounts for charitable giving this year.” It’s not all good news, however, as Fidelity also reports that two-thirds of the donors it surveyed decreased or stopped volunteering during the pandemic.
Worldwide, individual donors, corporations, and foundations reached deep in their pockets to contribute more for COVID-19 relief than any other disaster in recent history. Thus far, more than $11.9 billion has been given to the effort, dwarfing other previous epidemic giving. By contrast, giving to the Ebola epidemic in 2014 garnered $363 million in donations.
How COVID-19 is Changing Philanthropy
In addition to spurring giving, the pandemic has accelerated many pre-COVID-19 philanthropy trends and birthed new ones. Four are of particular interest: increased collaboration among donors, the emergence of community giving initiatives, a growing flexibility in how foundations are approaching giving, and the rise of the mega impact donor.Donor collaboration. Because of the oversized impact of global challenges like the pandemic, many donors are now pooling resources to influence change. “A Transformative Moment for Philanthropy,” a May 2020 McKinsey & Company article, explored how these collaborative efforts are making a difference. For example, the article notes, “seven foundations have partnered to create the Families and Workers Fund, providing flexible funding to organizations working to prevent people from falling deeper into poverty because of the effects of COVID-19.” Another collaborative effort according to the article, “the COVID-19 Therapeutics Accelerator was formed to develop treatment options, anchored by $125 million in funding from the Bill & Melinda Gates Foundation, Wellcome Trust, and Mastercard,” with many other entities now joining this effort.
Although there were examples of philanthropic collaboration pre-pandemic, they were rare. McKinsey poses the question, “Going forward, what if each foundation and donor aimed to allocate at least 25% of their funding to support initiatives led by other donors?” If we see this kind of collaboration grow, we may finally solve some of the world’s largest global challenges, including access to high-quality education for all children.
Community giving. Another trend of note is the emergence of “mutual aid networks.” These networks are not traditional charities, rather they are neighborhood groups made up of volunteers who work together to meet the needs of the community. According to “How 2020 Has Transformed Charitable Giving,” a December 2020 Los Angeles Times article, these networks focus on organizing a community and promoting an ethos of cooperation rather than just providing money. “While traditional charities operate unidirectionally, with donors and recipients as distinct groups, ‘the spirit of mutual aid allows for participation, including from the people who are benefiting,’ ” says Michael Dickerson, a source in the article who is an organizer for the grassroots organization KTown For All. “In other words,” the article notes, “those who benefit from a mutual aid group are welcome, though not required, to join in and offer their own resources to others.”
Foundation flexibility. Another positive movement coming out of the pandemic is the lifting of funding restrictions and reporting requirements by many foundations. As reported in IUPUI’s philanthropy blog, “many foundations like the Mary Reynolds Babcock Foundation and the Libra Foundation have committed to giving more than the minimum distribution of 5% this year. The Ford Foundation is leading the way nationally by taking on debt to give more in this moment and spark more philanthropy from peers.” Will this movement continue after the pandemic? Many in the philanthropic sector are calling on donors and nonprofits to work together to reimagine what a vibrant civil society would look like and how it would be funded.
Mega impact donors. Another accelerating trend through the pandemic is the rise of the impact-oriented mega donor. Author and philanthropist MacKenzie Scott has given away more than $4 billion in the past few months to 384 organizations focusing on outcomes for the most disadvantaged, saying, “This pandemic has been a wrecking ball in the lives of Americans already struggling. Economic losses and health outcomes alike have been worse for women, for people of color, and for people living in poverty. Meanwhile, it has substantially increased the wealth of billionaires.” Scott is part of the Giving Pledge, in which the world’s wealthiest individuals and families dedicate the majority of their wealth to giving back. Although she is new to this group, many hope her bold moves will inspire others to act now when need is so high and collective action can disrupt systems of historic oppression.
How COVID-19 is Reshaping Fundraising Practices
Just as the pandemic is shifting donor attitudes and approaches, it is also reshaping how development officers are conducting their work. Virtual strategies are taking root and peer-to-peer networks are becoming more essential. Given that large-scale events may not come back any time soon, fundraisers are hosting events and stewarding donors through offerings like virtual runs and pajama galas. Given the savings of both time and money in hosting events in a virtual world, many development officers will likely incorporate some of these practices into post-pandemic plans.And given that the pandemic has created so much isolation, fundraisers also are finding renewed success in launching peer-to-peer fundraising efforts, which are extending reach and increasing engagement. Of course, peer-to-peer fundraising has been around for a long time, but its focus is now shifting from live events to virtual ones. According to GivingTuesday, “The approach of peer-to-peer fundraising allows nonprofits to effectively tap into the personal networks and relationships each donor possesses. Rather than the nonprofit asking the community to give, the campaign becomes about the community rallying together to support a cause they all are connected to and care about.” The organization OneCause recently released a study outlining how nonprofits need to work with peer-to-peer fundraising participants, suggesting that “the experience” matters greatly. OneCause encourages fundraisers to ensure that their message is concise and compelling, the digital experience is streamlined and user-friendly, and the impact of dollars raised is communicated clearly and continually. Eighty percent of study respondents said it was very important to them to receive information on the impact of the money they raised, but only 19% said they received such data.
