02 September 2020
When it comes to corporate philanthropy, there’s never been a year like 2020.
In the first days of January, as the world celebrated the arrival of the new year, firestorms were devastating Australia’s east coast. In the weeks ahead, a series of earthquakes in Puerto Rico would destroy communities still vulnerable from 2018’s Hurricane Maria. Hundreds of thousands seeking refuge would gather on the southern border of the United States, while refugee crises would also reach new levels of urgency from Yemen to Myanmar.
All the while, COVID-19 was extending its deadly reach.
Confronted with the global pandemic, already-stretched corporate grant-makers were responsive and agile. By May, a survey of top funders showed that almost 90% had already changed or adapted their granting and operating approach in response to COVID-19.1
But the sheer scale and complexity of the coronavirus challenge has raised a series of fundamental questions for corporates and their philanthropy arms.
What role can, and should, corporate philanthropy play in response to an unprecedented challenge like COVID-19? How can corporates prioritise their giving between crisis relief efforts and longer-term programs to eradicate the disease and mitigate its social impacts? And in a global pandemic, where does a funder’s primary obligation lie – close to home with your most immediate communities or at the point of greatest impact?
As at August 2020, the total dollar value of grants from major funders for COVID-19 stood at more than $US 13B, donated to almost twelve thousand recipients according to Candid.org – a not-for-profit body that tracks global donations from major funders.
Sarah Davies, CEO, Philanthropy Australia, says that while in some senses the pandemic was unprecedented, for the philanthropic sector possibly less so. “The sector knows how to respond to crises, it’s what we do,” she says. “In this case, it was our role as a peak body to help our members understand the situation, and match funders to needs - who was best-placed to do the immediate crisis relief, and who was better positioned to do the medium-to-long-term recovery work.”
International Rescue Committee’s Lauren Gray, Senior Director of Global Corporate Partnerships, says that a significant part of the challenge for large not-for-profits such as the IRC was that COVID-19 represented a “double emergency” for the people they served, especially in countries already ravaged by years of conflict and turmoil. “For example, South Sudan - a country already dealing with severe malnutrition - only has 24 ICU beds and four ventilators for the entire country. If existing programming is interrupted because of COVID-19, the displaced population may have to face a devastating famine. NGOs, more than ever, need rapid and flexible funding to ensure life-saving services continue to operate.”
Lisa George, Head of the Macquarie Group Foundation, says that as the scale of the situation became evident, her team quickly identified the need to fund COVID separately to existing programs. “We already have a large program of work supporting outcomes that will drive positive change in communities. We didn’t want to divert funding away from those important projects to support coronavirus response - it had to be additive,” she says. Macquarie Group created a $A20m fund in response to COVID, part of which was initially disbursed for disaster relief, with the remainder to be disbursed over the medium term for more sustained responses.
As at 1 September 2020, approximately $A9.3 million of the funding had been allocated across 26 non-profits globally.
Sarah Davies notes that immediate financial grants were not the only response when the pandemic struck. Many granters made positive non-financial changes that will have a long-term impact. “We saw foundations reduce restrictions on grants, speed up decision making, offer in-kind support of skills and give recipients additional flexibility in how they use funds,” she says. “This eases the administrative burden on grantees and enables them to focus on response.”
As it became increasingly clear that COVID will require a longer-term response, some of these measures will likely become best practice for funders. More than 50 foundations signed up to a Philanthropy Australia pledge in response to COVID-19 committing to a series of principles designed to maximise the impact of philanthropy directed to the crisis.
“It’s really about trust,” adds New York-based Gray. “Rather than just transferring funds from one entity to another, the best philanthropy is about collaborating to solve problems. That can be funding, of course, and in-kind support like technology or expertise.”
She points out that increasingly, organisations are also using their public voice to advocate for key issues. “From a philanthropic perspective, having a corporate CEO highlight an issue can be very useful, and it’s increasingly expected of corporates too that they will take a stance on key issues,” she says.
By June, some organisations within the financial services sector and beyond were beginning to widen their response horizons, looking to provide support to businesses as they tentatively re-opened, and to people who had lost jobs through the crisis.
And it is here that the need for coordination, clear communication and collaboration between funders, governments and grantees comes to the fore. “Giving must be coherent for maximum impact,” says Davies. “It’s essential that granters don’t work in their own silos, but reach out to governments, peers and peak bodies to coordinate response.”
Philanthropists acknowledge that coordinated funding efforts can mitigate even the most acute global issues, although it requires investing in the well-being and empowerment of people living thousands of kilometres away. This can also be true of global corporate foundations, who may have staff impacted by different crises in different parts of the world simultaneously – yet far away from city-centre head offices.
Here too, the COVID-19 pandemic has provided a sharp challenge. While funding to address global inequities and injustices is critical, the pandemic has sharply turned attention to our own backyards, wherever in the world they may be. According to Candid, almost 600 state and local community-focused COVID-19 funds have cropped up around the United States, attracting contributions from private foundations, corporations, and individual donors alike.
While such local giving may have formerly been deprioritized by philanthropists (especially those working with national or global remits)the current crisis is a reminder that we each depend on—and have an obligation to support—the strength and resilience of our local communities.
Sarah Davies sees this dilemma less through the lens of foundations needing to ‘choose’ where to direct their support, and more as a clarion call for even greater partnership and collaboration between funders.
“Philanthropy can be a lonely pursuit,” she says. “There is need for funding at every level in our communities, and the key is working together so that each can play to their strengths to ensure we best meet the most need.”
Lisa George agrees. As the Macquarie Group Foundation now turns its attention to efforts focused on economic recovery, she notes that the scope of its focus seeks to balance local and global. “Macquarie is a global citizen, with people and clients living and working in many different communities around the world. There’s no one epicentre for this crisis. It’s a responsibility we take seriously and which our staff and other stakeholders will expect to see reflected in our response,” she says.
As at late August 2020, COVID-19 daily case numbers around the world appear to be stabilising in many parts of the world, although the situation remains far from certain, particularly as the northern hemisphere approaches colder weather and its annual flu season.
One thing is sure – the need for ongoing focus from philanthropists and For Purpose organisations to help mitigate the ongoing impacts of the virus. “In three to six months, certainly in the USA, we’ll see a series of government grants expiring,” says Gray. “We don’t know whether the funding will be renewed, but we do know the need won’t disappear.”
Says Lisa George, “There’s no doubt that this pandemic requires a sophisticated response from the sector, all over the world. We will continue to advocate for thoughtful, careful cooperation and sharing of best practice right across the sector to ensure maximum impact for the support provided at all levels of the community.”