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 and might be ahead of the curve compared to most countries. Yet, in the past three years, the world of US philanthropy started facing growing criticism. While a more skeptical view of philanthropy is commonplace in most of Europe, critical reflections of US philanthropists were not really appreciated. That’s changed.

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 Initia­tiveDEVEX, and the Coun­cil on Foun­da­ti­ons.

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