The US world of philanthropy continues to spearhead innovative and effective approaches, placing it ahead of the curve compared to many countries. Yet, about three years ago some experts started raising some valid concerns.
Critics like Stanford Professor Steve Reich have argued, “The ultra-rich are failing democracy,” (Why Philanthropy Is Failing Democracy and How It Can Do Better”, 2018). Others have disapproved of donor advised funds, a giving vehicle run by financial firms such as Fidelity or Vanguard, which have stockpiled billions of dollars in donated funds with no timeline for putting them to philanthropic use – whereas private nonoperating foundations must distribute five percent of their net investment assets’ value annually. What’s more, foundations and philanthropists have often faced criticism for being too top-down and closed door, failing to provide more flexible grants and sufficient overhead to end the “Starvation Cycle” – a term that refers to the chronic underfunding of indirect costs. There have also been long-standing concerns around foundations not showing enough interest in making their boards more diverse.
The criticism persists, yet it will most definitely take a backseat during the COVID-19 pandemic. US philanthropy has stepped up in a major way and did so swiftly. “So far, philanthropy has proven itself to be responsive, human-centered, and essential in this crisis,” said Olga Tarasov, Director at Rockefeller Philanthropy Advisors, one or the many consultancies advising philanthropists. David Callahan, one of the influencers in articulating the growing frustration agrees: “Right now, communities across the United States are being reminded of philanthropy’s vital role.”
During the current crisis, many foundations are truly helping their grantees by being more flexible. The President of the Ford Foundation said in a statement, “We want to provide you with maximum flexibility in how you use our funds in this time of extraordinary challenge. We know that ‘one size will not fit all’ so our program officers plan to reach out to you individually to work on the best ways in which we can support you.”
The who’s who of Fortune 100 countries were also quick to step up with major pledges of relief, including Big Tech companies such as Google or Facebook, who are actively sharing high-quality information on COVID-19 and have donated tens of millions of dollars. These actions have contributed to a change in the negative public perception of big tech companies to some degree. “Increasingly, journalists are asking whether the backlash against technology has defined coverage for them for the past 3.5 years might have come to an end,” wrote Casey Newton in the The Verge, a US technology-news online magazine. It certainly is a start to changing the negative image of the industry, but not likely the end: this week, Amazon warehouse workers walked off the job because they feel the company has failed to protect workers from Coronavirus.
What will the world of philanthropy and the global landscape look like after COVID-19? It is impossible and too early to say, but it’s a question keeping many people up at night. I am one of them.
There are a world of resources and giving data available online during this crisis. I’d like to recommend three: The Philanthropic Initiative, DEVEX, and the Council on Foundations.