Image by Mashiro Momo from Pixabay

March 16, 2020; Nonprofit AF (blog)

Nonprofit wag Vu Le just left his executive director position at Rainier Valley Corps a few weeks ago, and now he’s toying with the idea of becoming a meteorologist. There’s a need for one, he says, because foundations don’t seem to realize that “this is the rainy day you have been saving for.”

Foundations, I am begging you, if there was ever a time for you to increase your payout rate and get more money out the door, this is it. Please do not do what many of you did in 2008, when the markets tanked and people were crying out for help, and many of you lowered your giving instead of increasing it. I know that you mean well. In your mind, you are thinking of the future. You think that if you spend beyond the five-percent minimum payout rate as required by law, you will whittle down your corpus to nothing. You think of the future crises that humanity will face, and you want to be adequately resourced to handle them. You think that you are being prudent, saving up so that when society needs the funding the most, it is there.

But the reality is that your prudence has perpetuated so many of the problems you are saving up to solve, creating a self-fulfilling prophecy.

Le thinks the missives we’re getting from foundations regarding their willingness to relax grant terms (and add a bit in some cases) to overcome specific problems should be replaced with easy-to-access grant offers that double each foundation’s payout rates. We’ll need that extra money to remain responsive while continuing to advocate for the underlying policy issues this pandemic further exposes.

Get funding out to advocacy organizations who are fighting for paid sick leave, increased wages, universal healthcare. Get funding out to intermediary organizations that are coordinating relief efforts. Get funding out to nonprofits and people in general.

A silver lining of COVID-19 is that it is forcing us to question so many constructs that we take for granted. Why doesn’t the US have paid sick leave? Why don’t we have universal health care? Why are nonprofits scrambling to do so many things that should be done by a functioning government? I hope that when we overcome this pandemic, we will work to change these things.

We will pile on with a suggestion of our own: Foundations can assume that the unexpected expenses of operating a nonprofit during this period will run far higher than usual. So, we urge philanthropy to go back six months to a year and increase each of those grants you have made by 50 to 100 percent. Our need for networking, coordination of service, tailoring of services, organizing, and advocacy will be at least significantly higher. We may also be losing access to certain revenue sources as the direct result of a recession coming just at the point when we need all the political oomph and collective purpose we can muster. And, as Kevin Johnson points out:

So, our urgent suggestion is that if you think your grantees are doing good work, just add a match to their most recent grant. It’s not just that they will they need it; we all will need to get out of this unhealthy space we’re in as quickly as possible and with some important policy gains achieved.—Ruth McCambridge