Many foundation leaders are unsure of how long and to what extent they will maintain changes made during the COVID-19 pandemic, such as more unrestricted funding and streamlined processes, according to a new report out this week.
The Center for Effective Philanthropy heard from about 300 foundations in response to a survey on whether changes in practices during the pandemic were continuing. Key among its findings was that while almost all foundation leaders said they “plan to sustain at least some of the changes” made in 2020, “only time will tell whether these changes become permanent elements of foundation practice.”
What's changed in global philanthropy, and what more is needed?
The COVID-19 pandemic fast-tracked needed changes in philanthropy, experts told Devex during an event hosted Thursday on the sidelines of the U.N. General Assembly, where they also highlighted the need for further change.
CEP noted that some of the changes had been a long time coming. For more than a decade, philanthropic and nonprofit leaders had pushed funders to adopt certain practices, such as providing more flexible and unrestricted funding; streamlining and simplifying application or reporting processes to reduce the burden on grantees; listening to, trusting, and supporting grantees; and pursuing racial equity and racial justice, according to the report.
But many of those shifts didn’t happen until the spring of 2020, when the scale of the COVID-19 crisis became clear, CEP said.
More than 800 philanthropic organizations signed a pledge to make a series of changes to help them respond to the pandemic more quickly. And nearly all foundation leaders surveyed by CEP said they were working differently now than in early 2020. Streamlining processes and providing more unrestricted support were the most frequently reported changes, and many foundations said they planned to sustain those adjustments.
About 41% of respondents said they’d sustained most changes to how they work with grantees into 2021, while 35% said they’d sustained some changes, 21% said they’d sustained all changes, and 3% said they had not sustained any changes. Two-thirds of foundation leaders surveyed also said that their organizations had increased grant-making budgets over the previous fiscal year.
“The pandemic allowed us to rapidly pivot, eliminate historical administrative hurdles, and is informing how we will sustain these principles of flexibility and responsiveness going forward,” said an unnamed foundation CEO quoted in the report.
Foundation leaders also said they were more explicitly considering racial equity and thus changing the way that they identify applicants, though they acknowledged still having more work to accomplish in that area, according to the CEP report.
The pandemic and the “overdue racial reckoning” laid bare inequities across the United States and the world and pushed the William and Flora Hewlett Foundation to deepen some existing practices and accelerate bigger shifts, said Dana Hovig, director of the foundation’s gender equity and governance program. The Hewlett Foundation was among the six foundations that funded CEP’s report.
For example, Hovig told Devex that the foundation took additional steps to relax its reporting rules by waiving some grantee reports and converting a number of project grants to general operating support, among other changes. General operating support was also the norm at the Hewlett Foundation prior to the pandemic, he added.
Perhaps even more significant than those changes were the foundation’s new commitments toward race and equity, he said. The Hewlett Foundation launched a $150 million racial justice initiative in 2020 and renamed one of its programs from “Global Development and Population” to “Gender Equity and Governance” to better represent its work on addressing systemic inequalities, he added.
“The [COVID-19] crisis accelerated this commitment in this area of giving, and we are working to shift resources and decision-making closer to the communities we seek to serve by funding more organizations headquartered in Africa, as we have largely done in Mexico grant-making,” Hovig said.
“Only time will tell whether these changes [made during the pandemic] become permanent elements of foundation practice.”
— CEP’s “Foundations Respond to Crisis: Lasting Change?” reportThe U.S. has seen increased calls for corporations and their foundations to do more to invest in racial equity after a recent investigation by The Washington Post raised questions about how they were directing racial equity funding pledged in 2020 following the murder of George Floyd. In response, Bridgespan Social Impact, the Global Impact Investing Network, PolicyLink, and CapEQ earlier this month released a list of primarily U.S.-based organizations that funders could invest in to support racial equity.
CEP found that foundations with more racially diverse boards were more likely to adopt practices to support grantees and the communities they serve. “Yet, nearly half of leaders say that their boards are the biggest impediment to their foundation’s ability to advance racial equity,” according to its new report.
The document is the latest in a series that the organization has published since the start of the pandemic to examine how staffed foundations have changed their practices. The other reports looked at how foundations have addressed equity and calls for greater flexibility and responsiveness.
About the author
Stephanie Beasley@Steph_Beasley
Stephanie Beasley is a Senior Reporter at Devex, where she covers global philanthropy with a focus on regulations and policy. She is an alumna of the UC Berkeley Graduate School of Journalism and Oberlin College and has a background in Latin American studies. She previously covered transportation security at POLITICO.
