Letter from America | The swift and impres­sive response to COVID-19 by US Phil­an­thropy hits the pause button on criti­cal views

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.