July 9, 2020
Foundations support and empower giving during times of crisis
An unprecedented effort by U.S. community foundations to help those impacted by COVID-19 has now mobilized more than $1 billion to support on-the-ground efforts by nonprofits.
This latest figure includes funds managed by nearly 600 community foundations that have provided data as part of an ongoing study by the Community Foundation Public Awareness Initiative of grantmaking activities during COVID-19.
The study also found community foundations have already granted more than $800 million of the funds mobilized directly to nonprofits. This represents an extraordinarily high payout of more than 80 percent in a span of less than four months. The grants provide critical support to those who are facing challenges such as lost income, unstable housing, and food insecurity.
The Baltimore Community Foundation, for example, launched a rapid-response fund in the early days of the COVID-19 crisis that has provided weekly grants to nonprofits that are helping meet the real-time needs in its community. It also spearheaded a regional effort that mobilized 15 local organizations and family foundations to address the crisis.
“The need for food assistance is particularly acute, but the crisis has also revealed gaps in technology access, credible information in vulnerable communities, mental health counseling, youth and educational programming, and access to temporary shelter,” said Shanaysha Sauls, CEO of the Baltimore Community Foundation. “We went into high gear and were humbled thatour donors answered the call – with giving from donor-advised funds at our foundation quadrupling compared to the same period last year. The outpouring of community support has been nothing short of inspiring.”
An Unprecedented Response
Community foundations are grantmaking public charities that mobilize the assets of past and current donors to improve the lives of people in a defined geographic area.
They bring together the financial resources of individuals, families, and businesses to support effective nonprofits in their communities.
Community foundations and their donors have a long history of supporting their communities during times of crisis and disaster. But the magnitude of COVID-19 has inspired a coordinated response beyond what has been needed for previous crises. Community foundations in every state have led a massive effort to raise and grant funds quickly to help those most in need.
“Community foundations have more than lived up to their reputation as philanthropy’s first responders in the face of COVID-19,” said Terry Mazany, senior vice president at the Community Foundation for Greater Atlanta and retired CEO of The Chicago Community Trust. “The size and speed of our community-focused response is unlike any in our nation’s history – and it speaks to the unique value community foundations play in big cities, suburbs, and small towns across the country.”
Only Part of the Story
The financial impact of community foundations during COVID-19 goes well beyond their work in coordinating response funds.
According to the latest survey by the Community Foundation Public Awareness Initiative, DAF grantmaking at over 30 community foundations was up more than 80 percent in March - May 2020 compared with the same period one year ago. An earlier, larger survey by CFPAI found that DAF grantmaking at community foundations increased by more than $300 million in March and April alone.
The CFPAI estimates that at least $1 billion more in additional grants have been made by donor-advised funds managed at community foundations since the start of COVID-19.
Donor-advised funds (DAFs) make giving easy and effective, especially when nonprofits need increased support to meet urgent and growing needs.
"CFT fund holders have been stepping up in a big way in response to the COVID-19 crisis. Between March and June, CFT fund holders granted more than $20 million to nonprofits from their donor-advised funds, a 227% increase in funding from the same time period last year," said Carolyn Newham, senior director of donor relations and services at Communities Foundation of Texas. "In addition to grants from DAFs, CFT has raised an additional $8 million for our various COVID-19 community response funds. These dollars are making a significant impact in North Texas and beyond during challenging times."
A separate CFPAI survey focused exclusively on donor-advised fund activity at 64 U.S.
community foundations during the pandemic found that donors at those foundations had granted $821.9 million to nonprofits in March and April alone. That figure represented an increase of $302.5 million, or 58.2 percent, compared with the same period one year ago – and includes grantmaking outside of the foundations’ formal COVID-19 relief efforts.
The U.S. is home to nearly 800 community foundations – meaning the total granted through donor-advised funds at all community foundations during that period surely exceeded that $821.9 million figure.
In fact, across the U.S., more than $1 billion has now been mobilized by community foundations to address COVID-19 related needs. DAF account holders at community foundations have been rallying to support nonprofits at a time of extreme economic need.
Similar to what we've seen with our CFT fund holders, donors across the nation are granting two or three times more than they have in previous years – and are pledging to make additional contributions to nonprofits as the crisis continues to unfold.
While the overall numbers are impressive, so, too, is the grassroots nature of the response. Many smaller community foundations, for instance, are working closely with local government, nonprofits, and other foundations to raise and distribute funds.
The Southwest Florida Community Foundation in Fort Myers, for instance, has a long history of leading response efforts after disasters such as hurricanes – and often receives the bulk of its support from donors in other parts of the country.
During COVID-19, that dynamic has changed, said Sarah Owen, the foundation’s CEO. The Foundation has partnered with its local United Way chapter and county government to raise and distribute funds – most of which have come from within the community rather than outside.
“We have been committed to offering a network of support, including raising funds for critical needs, engaging local donors, and helping them find a way to direct dollars for relief,” Owen said. “We have also been supporting the infrastructure needs of nonprofits, advocating for them, and colleting vital data to direct our efforts.”
The response to COVID-19 by community foundations and our donors who advise grants through DAFs highlights the critical role DAFs play in supporting nonprofits. Not only do the vast majority of DAFs at community foundations make grants annually, and at a much higher payout rate than private foundations, donors use their DAFs to increase grantmaking during times of need.