Researchers at work to help fight COVID-19 at the University of Minnesota. Photo by: REUTERS / Craig Lassig

LONDON — Foundations are largely stepping up to the unprecedented challenge presented to NGOs by the COVID-19 pandemic, according to experts.

Despite the recent financial downturn, some funding restrictions have been relaxed and an atmosphere of understanding among many donors is currently prevailing, with new funds and initiatives also being created in response to the outbreak.

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But insiders said this response has not been universal, with some funders withholding planned grants amid the economic chaos sparked by the pandemic.

At least $5 billion worth of grants to respond to the COVID-19 outbreak have been given by foundations, mostly to relief organizations, public health agencies, and medical research groups, according to Candid, a group working to provide intelligence to philanthropists.

“We can’t think ahead about planning a whole year because of the nature of the impact in the short term.”

— Richard Hebditch, director of external affairs, Association of Charitable Foundations

Long term planning

Due to the uncertainty surrounding the crisis, in which countries have seen dramatic changes in public health, politics, and the economy occur in just hours, long term planning is proving difficult.

“Comparing this to the terrible disaster of 9/11, in some ways this is more difficult to respond to, because we don’t know when it will end, we don’t know how large it will be, and we can’t see where the hotspots are that will most need our support,” Heather Grady, vice president at Rockefeller Philanthropy Advisors, told Devex.

She continued: “We see most foundations in the U.S. understanding the severity of the crisis and its wide-ranging impacts not just on health, but on incomes and educational outcomes. They are stepping up, providing quick money, and crucially, more flexibility to their grantees,” Grady said.

In the U.K., “a lot of what we’re seeing from foundations is a response around talking to grantees and trying to understand the grantees’ financial position,” said Richard Hebditch, director of external affairs at the Association of Charitable Foundations. “With events and things like that, there will be lots of cancellations so that's all a drop in income,” he added.

Hebditch continued: “What we are seeing is the foundations being willing to step up and see what they can do in the short term and beginning to see what they can do in the medium term as well.”

A major cross-Atlantic foundational initiative in response to the COVID-19 outbreak is the Therapeutics Accelerator, launched earlier this month by the Bill & Melinda Gates Foundation, the Wellcome Trust, and Mastercard. The $125 million project is dedicated to researching treatments for the disease. The Gates Foundation will also spend up to $20 million to support health authorities in sub-Saharan Africa and Asian countries to improve surveillance, infrastructure, and treatment facilities.

Another is the COVID-Solidarity Response Fund for the World Health Organization’s COVID-19 response, being run by the United Nations Foundation and Swiss Philanthropy Foundation. The fund has seen support from high profile organizations, including Facebook, Google, and American Express.

‘Do what it takes’

Foundations are also coordinating on how they respond to the crisis, according to Grady and Hebditch. In the U.S., a Council on Foundations pledge with eight commitments has been signed by dozens of philanthropic groups, including the Ford Foundation and The Global Fund for Children.

Along with loosening rules on grants, the pledge asks foundations to ensure new funds are as unrestricted as possible, reduce requirements made of grantees, communicate and listen more to grantees, and to support those groups advocating for relevant policy changes in response to the pandemic.

Hilary Pennington, executive vice president of programs at the Ford Foundation told Devex that the foundation has signed the pledge calling on funders everywhere to “do what it takes to best serve our grantees.”

"As COVID-19 continues to impact our lives, it's crucial that we work together to support those on the frontlines of this crisis. It's on all of us, especially those of us with flexible resources, to support our non-profit partners who are serving communities most affected by the health and economic ramifications of this pandemic," Pennington said.

“The problem is no one wants to make their funder angry.”

— Phil Buchanan, president, The Center for Effective Philanthropy

The Council on Foundations has also launched a COVID-19 resource hub and on Thursday will host a webinar on how philanthropy can support charities in a pandemic.

A letter with similar suggestions was written by David Biemesderfer, president and CEO at the United Philanthropy Forum, and co-signed by dozens of other foundation executives.

Across the pond, nearly 200 U.K. foundations calling themselves the COVID-19 funders, including Bloomberg and Comic Relief, signed a similar pledge, saying they recognized the pandemic “is an exceptional event that will have an impact on civil society groups, and want to offer reassurance that we stand with the sector during this time.”

The organizations pledged to adapt activities expected of grantees, discuss dates to reduce report deadline pressure, financial flexibility, and to listen to grantees.

But Devex understands that in both the U.K. and U.S., not all donors have displayed the same level of support, with at least one even withdrawing planned funding to nonprofits.

“The problem is no one wants to make their funder angry,” said Phil Buchanan, president at The Center for Effective Philanthropy. While his organization has had some proactive outreach from donors and some funding brought forward, others have been silent.

There is also uncertainty over the long term. “The foundations will do their bit to help but this is going to be the next year,” Hebditch said. “We can’t think ahead about planning a whole year because of the nature of the impact in the short term.”

Of some concern is the potential impact of the stock market crash on endowments and the long term overall health of the economy. But Hebditch said this occurred “against a background of growth generally, it is not out of this world for there to be significant drops.”

Buchanan said that foundations can be a countercyclical force for nonprofits in a way that no other entity can, by increasing grants even as endowments decline. This is what foundation boards need to be talking about, Buchanan said.

The Rockefeller Foundation, which has pledged $20 million to “create a better tracking and management system for COVID-19” and to support vulnerable communities in the U.S. and globally, told Devex in a statement: “As any prudent guardian of an endowment geared to generational equality, we have plans to deal with market downturns. Our primary focus is ensuring the continuance of our work, and we believe we are prepared to do that.”

Grady said the effect on impact investing was unclear. When traditional investment returns are lower, impact investing is often more attractive to a broader range of funders, but right now it’s hard to see how return-seeking capital will help address the crisis, she said.

“There will undoubtedly be some market innovations to scale later, but right now there is a much stronger focus on grantmaking,” Grady said.

Update, April 8, 2020:, This article has been updated to reflect the amount of grants donated to respond to the pandemic.

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About the author

  • William Worley

    William Worley is the U.K. Correspondent for Devex, covering DFID and British aid. Previously, he reported on international affairs, policy, and development. He also worked as a reporter for the U.K. national press, including the Times, Guardian, Independent, and i Paper. His reportage has included work on the Rohingya refugee crisis in Bangladesh, drought in Madagascar, the "migrant caravan" in Mexico, and Colombia’s peace process. He can be reached at william.worley@devex.com.