Philanthropy - Rising to the occasion in response to COVID-19
Coronavirus-driven shutdowns are upon us – what do we do? It’s a question nearly everyone is asking themselves – as evidenced by the long lines and empty shelves at big box retailers across America.
For many philanthropists, their answer is to rise to the occasion and take immediate action. On 27 January, the CDC announced it was activating its emergency response fund, which had been catalyzed with a USD1 million gift from the Robert Wood Johnson Foundation.1 Six weeks later, on 10 March, The Bill & Melinda Gates Foundation, Wellcome Trust, and Mastercard jointly committed USD125 million to launch the COVID-19 Therapeutics Accelerator to focus on research and development of coronavirus treatments—with an emphasis on making products available and affordable.2
Many people are saying this is a moment for the philanthropic community to come together and thoughtfully, but swiftly, lead the day. Individual donors and foundations have the ability to make a transformative impact to address our community’s greatest needs; never has this been truer than now. For those seeking to get involved, there are many emerging opportunities to give, and potential ways to make a tangible difference. Following are a few suggestions.
Educate Yourself on the Most Current Needs
We can see that the situation continues to evolve, and needs are similarly moving and shifting. As recently as early March, most of the public dialogue was focused on international relief efforts. Today, we are looking at a very different situation at home as cases in the US multiply while federal, state and local governments struggle to keep up.
The World Health Organization’s report on China’s response to coronavirus has indicated that speed is critical in orchestrating an effective response.3 Speed is actually a hallmark of private philanthropic funding, because private funders can deploy capital quickly and flexibly, allowing them to meet targeted needs and adjust their approach as situations evolve. As an example, one New York-based company purchased face masks and other supplies to have on hand for its employees, but as the firm moved to remote working, its leadership donated the supplies to a local hospital where they were urgently needed.
As you think about supporting either your local community or an impacted area elsewhere, keep in mind how needs may differ not only over time, but also from one location to another. For example, while donating large volumes of supplies may be helpful in one area, those same supplies may already be plentiful somewhere else and therefore not an effective donation. The strength of the local medical system—from the number of doctors, to available hospital beds and medicine supply—also may differ from one location to another.
Containment and response are major themes in the US now. As of today, the primary opportunities for giving include:
- Research (vaccination development and testing);
- Patient testing and diagnosis;
- Treatment (medical supplies, medical care); and
- Prevention (protective equipment, disinfectant, public awareness campaigns).
For each of these, a range of potential non-profit, government, or quasi-governmental agencies may be involved and seeking funding.
Therefore, many people are recommending that funders focus on maintaining existing community services and giving to local community organizations as one of the most important ways to help.
Remember the Less-Visible Needs
While there is a massive, immediate need to support medical-related causes, there are also growing needs related to the economic disruption resulting from slowed commercial activity during the coronavirus pandemic.
In China, we saw huge declines in economic activity during the quarantine.4 Containment efforts resulted in far fewer people going to work, which began causing major impact in the financial markets. In the US, as cities shut down and more people stay home, we know that the impact will not be the same for all Americans, and the economic disparity within our country will become even more evident. This is because the most vulnerable members of our community are also the most at risk during this coronavirus outbreak. A Time magazine article published on March 5 provides a detailed discussion.5
While much remains uncertain, we know the speed of virus containment in the US will be correlated to how well social distancing and quarantines are implemented. Yet for many Americans, staying home creates an unsurmountable hardship. The people who are the hardest hit economically during a quarantine are also the least likely to be prepared. For example, consider the challenge of stocking up on two weeks of groceries for your family if you live week-to-week from your hourly wages. Or of obtaining diagnosis and treatment if you don’t have medical insurance. Or of staying home when you are sick, if it means you will not get paid. It will be our existing community lifelines and safety net supports that will be called upon to fill these gaps.
Therefore, many people are recommending that funders focus on maintaining existing community services and giving to local community organizations as one of the most important ways to help. After all, this is a time when all of us will be better off when the most vulnerable among us are supported.
Utilize Charitable Giving Best Practices
Some have described strategic philanthropy as requiring both your head and your heart. That is to say, you can allow your sense of compassion and concern to guide your approach (follow your ‘heart’), but also be smart, measured, and disciplined in your execution (use your ‘head’). This advice continues to apply during challenging times, and philanthropists are well-advised to remember the following best practices:
Vet charities appropriately and do your due diligence before making a gift. While instances of fraud are rare, bad actors may try to take advantage of heightened fears during disaster times. We have seen instances of sham charities seeking donations in other disaster times.6 To avoid falling victim to fraud, direct grants to qualified public charities that are registered and current with the IRS. If you aren’t sure if a group asking for a donation is a qualified charity, public resources such as Give.org, Charity Navigator, and Guidestar allow you to easily verify any charity in the US.7
Be thoughtful when selecting organizations to support. While you are researching a potential beneficiary online, be sure to review the organization’s financial records to understand their funding sources and how they spend the donations they receive. Ask yourself: how much of the donations received is actually spent on charitable work, versus on administrative expenses and overhead? This applies to all charitable activities, but can be even more important in a crisis when speed and efficiency are critical.
Consider working in partnership to amplify impact. Many large funders have already made gifts to catalyze the coronavirus effort. In addition to the Gates, Wellcome, and Mastercard partnership mentioned above, Bloomberg Philanthropies announced a partnership with the World Health Organization, committing USD40 million to fund deployment of rapid response teams to detect and treat outbreaks, and train healthcare workers internationally.8 Additional pledges continue to be made globally by a combination of governments, multilateral organizations, and private funders.9 For philanthropists thinking about getting involved, partnering with existing, reputable players may allow you to amplify your overall impact. Another idea: for funders who have already pledged restricted gifts this year, consider removing gift restrictions to allow a grantee to maximize flexibility and channel funds to the most critical use now. Doing so may actually save lives.
Remember rules for foreign grantmaking. For US taxpayers looking to give to support coronavirus efforts (relief or otherwise) outside the US, you should be mindful of the standard rules and best practices for grantmaking to foreign charities. While grantmaking outside the US is permitted, additional due diligence is required. One idea: the CDC Foundation is a 501(c)(3) and can receive donations,10 and is working closely with the World Health Organization to distribute funds effectively.
Don’t forget the tax benefits of charitable giving. While income tax planning may be the furthest thing from your mind during a disaster, it doesn’t need to be. Qualified charitable gifts can provide important tax deductions against your income this year. If you already have a charitable giving structure such as a foundation or a donor-advised fund, now may be a good time to make distributions to support causes important to you. For specific guidance regarding your situation, contact your tax and legal advisor.
5“If We Don’t Work, We Don’t Get Paid: How the Coronavirus Is Exposing Inequality Among America’s Workers”, https://time.com/5795651/coronavirus-workers-economy-inequality/↩
7www.give.org; www.charitynavigator.org; www.guidestar.org↩