For more than 100 years American nonprofits have provided the social safety net that catches the most vulnerable before they slip beyond hope. However, although our American nonprofit infrastructure is vast and intricate, it is not invulnerable.
According to a recent survey, 80% of charities anticipate their 2020 revenue will be lower than expected, and most charities (89.4%) are concerned about maintaining a financially stable organization in 2020.
"In the nonprofit sector, the fragility of life is always very present. Likewise, for nonprofit leaders, the fragility of our organizations is also always present. Fears of an impending recession and the decline in the percentages of individuals donating to nonprofits have made the sustainability of organizations a top concern for executive directors for quite some time. But none of us expected the sudden disruption of our lives and society brought on by a pandemic.
"All revenue streams, from foundations to individuals and even fees for service, are under extreme pressure. Indeed, for many executives, thoughts today are not on sustainability but survivability—and, as always, it is at these times our constituents need us most.” (NPQ, Steve Zimmerman, March 19, 2020)
The Safety Net for the Safety Net
Projections by the International Monetary Fund and the World Bank suggest that a failed pandemic response could result in half the world population of 7.8 billion people soon living in poverty. At the same time, nearly 90 percent of nonprofits in a recent survey said they were concerned about remaining financially stable through the end of the year. This is a “perfect storm” now descending on the world’s most vulnerable.
WHO Can Save Nonprofits?
- Forbes reported that the 2,095 billionaires globally — even accounting for market downturns through mid-March — have fortunes that total $8 trillion. Roughly one in 10 billionaires have announced a commitment to give away at least half of their wealth during their lifetime or upon their death.
- Foundations worldwide have assets of $1.5 trillion.
- Meanwhile, the 400 wealthiest American individuals had wealth pegged by Forbes at nearly $3 trillion in 2018 — twice the amount held by foundations globally.
WHAT Must be Done?
Only the world’s most wealthy will be able to move fast enough to erect a safety net under our nonprofit infrastructure. If we can save even just 70 percent of nonprofits from extinction, perhaps we can ensure the civil-society safety net that has taken decades to build does not collapse. What can the uber-wealthy do?
- Provide gifts of cash that are unrestricted. Enable nonprofits to weather the short-term loss of revenue from canceled fundraising events, lost income from suspended services, and other factors that now pose an existential threat to a vital element of our economy and social fabric.
- Now is not the time to give anonymously. Communities are suffering and need to know that solidarity comes in the form of individual giving, sharing, and caring.
Thank You to These First Responders
- Stand Together, founded by conservative businessman and philanthropist Charles Koch, has raised nearly $40 million for its #GiveTogetherNow fund, which has given $500 each to nearly 80,000 individuals and families.
The cash program is driven by the idea that people experiencing difficulties have the clearest idea of what they need, says Brian Hooks, Stand Together’s chief executive.
"The people experiencing poverty are not deficient," he says. "They have a lot to offer. Like all of us, they need help to realize their potential. They just need help."
- The Robins Foundation in Richmond, Va., worked with the city and other local grant makers to create a nearly $1.2 million fund to provide direct support for area residents in need.
- Blue Meridian Partners, which was spun out of the Edna McConnell Clark Foundation in 2018, has contributed "tens of millions" of dollars to various direct cash efforts, according to Jim Shelton, the donor collaborative’s chief investment and impact officer. Shelton declined to specify how much Blue Meridian has given, but he says the group has set a goal of $100 million, most of which will go toward direct cash transfers.
- Howard and Sheri Schultz gave $3 million from their foundation to help start the Plate Fund to support Seattle restaurant workers who are facing hardship. The couple worked with the Family Independence Initiative to develop a technology platform to distribute $500 each to restaurant workers making less than $62,000 annually who had been laid off. Howard Schultz says businesses and nonprofits are faced with a crisis "the likes of which we haven’t seen in our lifetime." To respond, philanthropy had to innovate and adopt an entrepreneurial mind-set. That doesn’t mean, Schultz says, that he and Sheri will continue to make cash grants after the chaos recedes. "We had to do something dramatic that was fast and nimble," he says, "and it didn’t matter whether or not it was strategically linked to our core purpose."
On behalf of nonprofits and the vulnerable populations they serve - thank you.