I received some valuable comments on my recent piece on the sevens sins of nonprofit governance. They prompted me to add a coda about what makes a “good” nonprofit board.
The seven sins of governance that I referred to essentially revolve around a lack of attention to the duty of care. This is a concept familiar in traditional and legal ideas of governance. The duty of care and the duty of loyalty are clearly explained in many useful nonprofit governance publications, such as Fiduciary Duty: 20 questions not-for-profit organization directors should ask, from Chartered Professional Accountants Canada. But it is enough for a director of a nonprofit organization to be familiar with fiduciary duty? It’s necessary but I think not sufficient.
Those who commented on my initial reflections on the sins of governance put their finger on elements that are less legal and more organizational. These have to do with the quality of the thinking that directors bring to the table, to the diversity and inclusivity of the group of directors as a whole, to their relations with each other, with the leadership and staff of the organization, and with the organization’s beneficiaries and partners. When we adopt the broader view of governance that is articulated in the Ontario NonProfit Network/Ignite IPS work on Reimagining Governance, we see the role of boards in that organizational context. Directors have specific legal responsibilities with which they must be familiar at a minimum. But beyond this, many board directors would benefit from examining themselves regularly in the context of the system that they inhabit.
What would this look like? What 20 questions would directors need to ask themselves if they were looking beyond their fiduciary duty? What would you want to know if you were thinking of joining a board of a not-for-profit organization in 2020?
Do the board leaders work well and closely with the leaders of the organization?Is there enough communication between them? Does the board leader engage without being overly intrusive? Does the staff leader provide enough information at the right level? Does board leadership renew itself regularly and transparently?
Do we have diverse perspectives around our table? Do we have enough of them? Do our discussions and decisions consider all perspectives? Do we have enough input and do we get it from “not the usual suspects”?
Does the board recruit thoughtfully and with attention to the needs of the organization? Does the board support and provide appropriate feedback to staff leaders? Does the board ask for staff and peer input to evaluation of the leader? Does the board have adequate policies and processes around whistleblowing, and harassment behaviour?
Does the board evaluate itself critically and regularly? Does everyone have a chance to evaluate their own contribution and that of the board as a group?
Do we have opportunities to use our imagination and creativity in service to the organization? Do we generate new ways of seeing old problems? Are we brave enough to suggest we stop doing things when it’s necessary to do so?
Do we talk to members of our community (the people who work with/benefit from the work of our organization)? Do we hear regularly from experts, critics and partners?
If you ask yourself these 20 questions (and the 20 questions suggested by the CPA), you would be well equipped to know if you are joining a board that sees itself in its wider “ecosystem”, that pursues its tasks thoughtfully and that will use you well.
As a long-time nonprofit director, I have reflected on what we can learn from the governance car crash that appears to be the WE Charity and its affiliated structures. I have wondered: where was the WE Charity board as this evolved? Charity Intelligence and others have pointed out the multiple failures in this situation. But does one example prove that boards of directors are the Achilles’s heel, the fatal vulnerability, of nonprofit organizations?
Without commenting further on We Charity, this is a moment to consider what I would call the “seven sins” of nonprofit board behaviour. Many of these sins stem directly from a lack of independent oversight. Others arise because the board has not asked enough questions about the policies of the organization. All of them suggest the importance of having independent and external sources of information and advice.
Independent auditors are great sources of information, and advice. Their job is to ask questions. As part of their responsibilities they can suggest improvements to financial management and practices. But while a nonprofit board can develop comfort and trust in an auditing firm that is deeply familiar with an organization, especially if it accompanies an evolving and more complex organizational structure, the board needs to be willing to get fresh eyes periodically on financial issues.
This often goes with the first “sin”. Risks evolve as situations change and especially as complexity increases. To assess risk effectively, boards need to be willing to engage regularly with outsiders whether auditors, external advisors or sector peers. Fresh eyes on risk are key.
Boards of incorporated nonprofit organizations have a minimum of 3 directors. Many if not most recruit more. The essential thing is to have enough independence from the organization that directors can ask challenging questions without discomfort or fear. Board directors don’t “own” their organizations. They need to be able to take some distance in order to fulfill their duty of care and not fall into the trap of over-familiarity and obligation.
These policies are important. They shouldn’t just be a page in the board director’s manual. Directors as part of their duty of care must be conscious of the need to declare a situation where their own interests and those of the organization are entwined to their private benefit. Most directors of charities are not paid but they may have other conflicts. They need to adopt and believe in conflict of interest policies, and to declare conflicts as soon as they see them.
A board’s job is not done if it commits only to the minimum of transparency in releasing annual financial statements and reports to the regulator. Board directors need to disclose who they are, and they should also ask their organization to be regularly and proactively transparent about their mission, operations and strategies.
This is a component of transparency. If an organization is lobbying government for a contract, or more broadly for a change in public policies, it’s important for the board to ask managers to be vigilant about disclosing and registering activity, depending on how significant it is. It isn’t always necessary to register as a lobbyist. But if the organization is spending a lot of resources, or is working with outsiders to influence government, it should be willing and proactive in making that public.
This is the big one. If you are too close, or too far, you risk committing some of the six other sins. Boards need to find the right balance in their roles. The thing is that boards are not the only structures that “govern”. They are not the managers nor the top part of the organizational hierarchy although they do have a unique fiduciary responsibility. They are not the only shapers or custodians of an organization’s strategy, finances or reputation. Directors bring their ideas, skills, networks and critical eyes to the table. Yes, they should play a fiduciary role and also a creative and generative role, in partnership with others, most importantly the organization’s staff but also with donors, partners, and other organizations working in the same field. They should reach out, share ideas, stay connected to the context within which their organizations work. The best directors keep their ears open, use their voices and bring their sharpest thinking to the table.
I see signs of more creative thinking about the roles of nonprofit boards. The excellent ongoing work on Reimagining Governance by the Ontario Nonprofit Network and Ignite NPS puts the spotlight on the importance of broadening governance beyond the board itself. As the problem is framed by the Reimagining Governance initiative, “governance of nonprofit organizations isn’t well designed to be consistently effective and able to respond to today’s complex environment, nor the future.” Reimagining Governance suggests that boards should be considered as an important part of a broader governance “ecosystem” that shapes an organization’s mission, strategies and performance. Governance should not be equated solely with the boards of directors. This puts too much expectation and too much burden on boards to be all things and it makes volunteer board recruitment and leadership an increasingly difficult task. Let’s not allow the WE Charity apparent failures of WE Charity governance to make us more nervous or risk-averse about governance. Let’s hope that the discussions provoked will give fresh urgency and creativity to rethinking and broadening our views about the ecosystem of non-profit governance, especially in these demanding times.
The pandemic is a clarifying moment for philanthropy. A spotlight is shining harshly on the familiar endowed foundation model. It is being aimed even more pointedly at the form of endowed philanthropy known as the donor-advised fund or DAF. The point is sharp: in this time of crisis like no other, when charities and communities need resources more than ever, can there be any justification for foundations and DAFs not to spend much more and much faster? Donors have received a tax advantage for their decision to give away some wealth to a foundation or DAF. So, isn’t this the time to put much more of that money into the hands of those who need it, and to do so unconditionally? Indeed, is this not the time when foundations and DAFs should spend themselves down entirely?
The needs created by the pandemic intersect with the longer-standing needs of less advantaged, more marginalized organizations led by people of colour and Indigenous peoples which have generally received less from foundations and DAFs. This has sharpened the critique of “traditional” endowments. Edgar Villanueva, criticizing DAFs in particular, puts it bluntly: “ Part of philanthropy’s mandate in this critical moment is to interrogate the ways in which our old structures uphold white supremacy…As traditionally structured, DAFs operate under the assumption that the presumably white, wealthy donor knows what’s best.”
Some voices today in the United States, and in other countries including Canada and the United Kingdom where the endowed private foundation or fund is a well-established philanthropic structure, are calling on these funds to substantially increase their giving. This has been the principle behind the collective statements issued by philanthropy-serving organizations and funders in Canada, the United States and the UK. Some donors to DAFs are calling personally on other donors to give more. An example is the HalfMyDAF campaign, calling on DAF donors to step up significantly.
Evidently, there are those who believe that a response that is left up to individual donors is not sufficient. In their view it would be in the public interest for governments to impose a higher mandated payout. An American example of this is the Emergency Charity Stimulus campaign which is calling on Congress to mandate a temporary increase in the disbursement quota or payout from 5% to 10% and its extension to individual DAFs (which do not have individualized requirements either in the US or Canada). John Hallward joined the debate in Canada with the recent argument that government should increase annual foundation disbursement quotas (from current 3.5% of invested assets) so that foundations can help cover the increasing financial needs of charities due to the pandemic.
Some go so far as to suggest that the whole model is wrong in this time and place. The idea that the public should provide incentives to the wealthy to set aside money in perpetuity for philanthropic purposes with no requirements to disburse beyond 3.5% or 5% per year seems particularly wrong at a time of enormous need. Interestingly, the idea that foundations should endure indefinitely has not always been the standard model or belief. In a valuable commentary on the history of the idea of perpetuity, Benjamin Soskis, a philanthropy historian, points out that until well into the second half of the 20th century, foundation donors and boards had “fluid attitudes toward foundation life span and spending rates that had not congealed into philanthropy-wide norms.” In his view, it was in fact largely an attempt by government (Congress) in the Tax Reform Act of 1969 to impose a lifetime limit on foundations that “rallied foundation allies — both around federal spending requirements, seen as an alternative to lifetime limits, and also around a defense of the right to perpetuity, which became a stand-in for the defense of foundation independence more generally….Congress had meant the payout requirement to serve as a substitute for a foundation lifetime limit by instituting a condition on continued life based on a minimum responsibility to the current moment; but it ultimately became more commonly regarded as a guarantor of perpetuity.”
This American lead established the example for Canadian regulators who began to regulate foundations through minimum disbursement quotas in the 1980s. There has never been an expectation that foundations should be forced to spend down. Arguably, the expectations among provincial regulators and accountants that charities should behave prudently in stewarding their funds has suggested to foundation and charity boards that they invest with a long-term and low risk conservationist perspective. Government regulation does not always have the consequences that one would expect.
But today we face a financial crisis for the charitable sector of a magnitude that none of us have ever experienced before. As Soskis rightly says, “this is no time to rely on settled practice, on defaults, on unexamined institutional traditions. Even if foundations stop short of taking (former Ford Foundation President) McGeorge Bundy’s advice to “regularly ask [themselves if they] could do more good dead than alive,” they should fully recognize that, at this moment, grappling with the temporal dimensions of philanthropy is a matter of life and death.” I agree with those who maintain that this is the time for extraordinary giving. I think it must remain an individual decision based on philanthropic mission whether to spend down or remain focused on the longer term with reserves of capital to support work that will take many years (climate change adaptation and mitigation would be an example). But in 2020/2021, and maybe longer, granting MUCH more than the minimum disbursement if a foundation, and definitely more if you advise a DAF, is a MUST. Phil Buchanan of the Center for Effective Philanthropy put it best in a recent blog : “Now is the time for leadership. None of us will look back at this time and wish we did less.”
Back in January when COVID 19 was a faraway menace to us, I speculated in a blog post on three important challenges in 2020 for Canadian philanthropy. I suggested that foundations could make an important difference in the Canadian nonprofit landscape if they used their funds and influence to help provide a platform for unheard voices through public media, to build nonprofit sector leadership from the rising generation, and to develop capacities for policy analysis and advocacy among sector leadership organizations.
We know now what happened in the first part of this year like no other in our experience. All plans out the window, all funding intentions upended, all of us unnerved.
Foundations have responded rightly and urgently to the need: more funding, fewer funding restrictions, more support for community collective efforts to meet the crisis. The initial results of a survey of foundation responses from Philanthropic Foundations Canada bear this out. Many foundations have also agreed publicly to pledge to give 5% (or more) of their assets this year to meet the moment.
But should we be thinking now in the second half of 2020? As we move beyond relief to recovery, should we reconsider the three challenges that I identified in January? In my view, yes. They are even more important now. Here’s why. Funder action on these challenges responds to what the pandemic has so dramatically revealed to us: the need for resilience and the need for justice.
Dr Susan Phillips of Carleton University spoke thoughtfully in a recent webinar about the need to develop greater sector resilience as we move from relief to recovery and to rebuilding. It is true, as she soberly noted, that we are likely to see many more layoffs and many permanent closures in the nonprofit sector as the pandemic-induced recession wears on through the rest of 2020. The pandemic has shown a need to develop the future financial and human resilience of those sector organizations that do endure. She underlined the need for stronger local infrastructure, more nimble organizational leadership, reskilled employees, increased social research and development, and greater innovation capacity. She summarized succinctly the opportunities for the sector not only to rebuild but to transform itself and its place in Canada. She spoke about the possibilities of engaging in a new conversation with governments to focus on fixing our most serious problems. She talked about the opening to new voices, new perspectives and a more inclusive culture in the sector.
Funders and donors to the nonprofit sector should reflect on their role in promoting these factors of resilience. The challenges that I outlined in January are even more important to address: building non-profit leadership capacity, particularly leadership from the youngest generations, and investing in data systems, policy analysis and advocacy skills for provincial and national intermediary organizations such as Ontario Nonprofit Network and Imagine Canada (to name only two). Small investments in these elements bring big dividends. What if we had not had the dedicated, smart, nimble and imaginative leaders that we do have, to get many of Canada’s nonprofit organizations through this very tough time? And how do we ensure that the next wave of leaders has the necessary skills and mentorship to carry on? What if we had not had the determined and rapid advocacy from organizations such as ONN and Imagine Canada to secure a place for charities and nonprofits in the public emergency relief measures? And how do we make sure that we have that advocacy ready for us in the future? Investing in leadership development, training, mentoring, and better work conditions, and providing core stable funding for networks are the ways that funders can do it.
And what about justice? The dramatic events around the murder of George Floyd and others in the United States and the treatment of Black and Indigenous peoples in Canada puts the issue of systemic racism and injustice squarely in front of us. Combined with the injustice of the unequal, more severe, impact of the pandemic itself on the most vulnerable in our society, this makes justice the inescapable question for funders. I suggested in January that funders could do more to support public media platforms where the voices of the unrepresented or marginalized minorities could be heard. How much more important is this today. At the same time, foundations should do better listening themselves to these previously unheard voices. Bring new people into your decision-making, ask for more feedback, go and sit at other tables. Ask, don’t tell.
If I could propose my challenges for Canadian foundations in 2020 over again, I would reiterate them all, and add a fourth: what can funders do to address, even more forcefully, as allies, the issue of systemic injustice and racism? Particularly since 2015, many Canadian funders have taken seriously the importance of reconciliation with Indigenous peoples. They are working sincerely to learn and to act in ways suggested by Indigenous peoples themselves. The pandemic has made this so much more urgent. It has also extended the view so much more clearly to people and communities of colour suffering from systemic injustice in Canada. We have had a limited conversation in philanthropy in Canada about inclusion. But we need to make it specifically and urgently about equity.
In January 2020, I suggested that even if you are primarily a place-based or local funder, consider your strategies through three lenses. Does our work also contribute in some way to more informed citizens, more capable young leaders, or a stronger non-profit sector in Canada overall? In July 2020, looking forward, we must add a critical fourth: does our work contribute to greater equity, to more inclusion, to justice for everyone?
Three months, a quarter of a year, since the pandemic lockdown began. Long days, short weeks for many in the nonprofit sector and their funders. The troubling impacts of the lockdown on charities are piling up: lost revenue, staff layoffs, shuttered programs, and negative increases in social indices such as mental illness, domestic violence and food insecurity. At the same time, these weeks have seen extraordinarily positive actions: rapid deployment of public support to individuals and nonprofit organizations, new collective funds for community support, commitments by private funders to give more and to give with fewer conditions. And innovative responses to longstanding social issues that have been sharpened by the pandemic, such as food insecurity, homelessness, youth in care or on the streets, and the needs of Indigenous communities and communities of colour.
Where do we stand now and what might the next six months look like? We have no shortage of advice on this. I have been struck over these few weeks not only by the unprecedented actions taken by philanthropy but also by the deep and generous thought leadership offered by so many in the philanthropic sector. One need only look at the pandemic-related coverage of The Philanthropist in Canada or the Center for Effective Philanthropy in the United States to find articles, opinions and advice that are realistic, reflective and hopeful. Many thought leaders are starting to speculate about whether this crisis will lead to fundamental changes in the practice of philanthropy. Or, conversely, whether foundations are going to revert to previous (pre-pandemic) patterns as many did after 2008/2009.
Foundations both in Canada and in the US have responded to the unprecedented crisis in unprecedented ways. Many have stepped up to the call to give more (for example the extraordinary initiative by Ford and four other US foundations to borrow more cash in order to get more cash into the community). And many have realized the importance of giving more to address the issues exposed so cruelly by the pandemic: inequality, exclusion, hunger, poverty….the social determinants of health. There has been more talk of the need for gender or equity or diversity lenses in funding practice. Will practices change more rapidly as the pandemic unfolds and after it is over? These questions are addressed in a number of useful recent commentaries.
Real Change or More of the Same? Foundation Leaders Look Beyond COVID-19, by Thomas Boyd, tries to peer into the future “after the dust settles”. Inside Philanthropy asked a number of US foundation leaders what lessons they are learning from the pandemic. Most of these leaders are from the larger, well-staffed and well-known foundations such as Rockefeller, MacArthur, Bloomberg and Hearst. They generally agree on the future importance of more collaboration across sectors (particularly with government). These foundations are collaborating in many ways: creating and/or joining collective community funds, convening community players from government, the nonprofit sector and business, supporting initiatives by governments and researchers on treatments and vaccines. We have seen this in Canada too, as collective funds supported by government, public and private funders have been created from Vancouver to Montreal. New collaborative funds are going to be rolling out, particularly for Indigenous and black-led communities, as the unequal toll of the pandemic becomes clearer and clearer. This may well continue as more funders acquire experience in collaborative funding.
US foundations also think that they will maintain increased flexibility and fewer hoops to jump through for their grantees. They believe that previous practices such as lengthy grant applications, long time periods for decisions, and onerous reporting on grants will not return as they have understood the benefits of nimbleness. Says the Hearst Foundation, “We're nimble and want to stay that way and be responsive.” We have seen this in Canada too, with many foundations trying to get money out the door more quickly. It’s a change apparent everywhere. Clare Wilkins writes in Is the Future Unrestricted? Charity Funding Post-COVID, (New Philanthropy Capital in the UK), that “more funders than ever are trusting their grantees, agreeing to new kinds of asks and being understanding about difficult messages and bad news – such as delays in achieving a set of outcomes or a need to change planned activities.”
It seems that foundations are likely to give more and give faster, at least for the remainder of 2020 since the social and economic toll of the pandemic and lockdown will continue. No reverse gear yet. But what might give foundations pause in the second half of 2020? Clare Wilkins suggests that it is too soon to say that practices have changed permanently. In her view, we have entered a “testing phase” for the sector. “Many donors have done what has been asked of them and they will be watching to see how their gifts are managed. It is now the responsibility of charities and fundraisers to ensure that the trust and flexibility loaned to them is rewarded – so in the future funders can be persuaded to give in the same way again.”
This statement puts the spotlight on the relationship between funder and charity, not just on the behaviour of funders. Will relationships fundamentally change after the pandemic? Or will foundations reverse as they doubt their effectiveness? It is one thing to give more and faster. It is another to give differently. So how can foundations build different practice? One way is through better listening. Patricia Harris of Bloomberg notes, “Our belief has always been that philanthropy should be constantly evolving and changing, because if you’re not listening to your partners about what they need and when they need it, you’re not making as big of an impact as you can and should be.” This point is made in an excellent blog on listening practice Six Tips for Funders to Listen Well Right Now by Kevin Bolduc of the Center for Effective Philanthropy. His advice is for now, in crisis circumstances, but is equally valid for later, given the pre-existing and now accelerating questions around who to listen to and how to hear the voices unheard. He says, succinctly (but with many great examples in his blog): listen quickly, carefully, differently and comprehensively. These are practices that any foundation can begin to implement over the next six months. With this, we can hope to see fast forward change and not reverse in philanthropy for 2021.
We don’t exist in a bubble in this world. We exist in a web.
This is how we need to think about our situation as a philanthropy sector, as a country, as a region and as human beings on our planet.
The inevitable push in this pandemic is towards closure, towards turning inward and locking down, into seeing the world as “us” and not “them”. It’s inevitable but it’s not irresistible. In fact, ignoring the world is the worst thing we can do to ourselves. Solidarity, connection, and mutual support are the way to get through this. It’s not an option, it’s a must to maintain our web, not to retreat into our bubble.
This was a central thread in the wide-ranging conversation which I moderated on April 30 for Philanthropic Foundations Canada. The topic was whether and how Canadian foundations can fund globally during the pandemic. But the very thoughtful discussion evolved into being about much more than global funding opportunities. We discussed our opportunity as a country to re-imagine and to rebuild not just our own communities but the global community. We have a chance to bring Canadian values and skills of humility, willingness to listen, to learn and to partner to the job of mending the gaps in the global web.
Dr Peter Singer, former CEO of Grand Challenges Canada and now a senior advisor at the World Health Organization, put it succinctly during the conversation: “This is the biggest global crisis in our lifetimes”. And it’s not just a health crisis, it’s an economic crisis. People will die of the virus. But they will also die from lack of health care for other illnesses. And they will die of poverty. Existing weaknesses and gaps in the global health web will be magnified: access to water and hygiene, food security, children’s health and education, discrimination and violence against women and girls. These gaps don’t just affect other people. The difficulty of fighting the virus in Nigeria or Bangladesh will mean that the virus continues to be a danger everywhere. Polio and smallpox were not just eradicated in North America. They had to be eradicated across the world.
Nic Moyer of the Canadian Council for International Cooperation addressed the need for a robust global health system. This is a role for Canadian philanthropy – to advocate for a strong multilateral system. The World Health Organization is one of a family of multilateral organizations that have grown over the years since the end of World War Two to remedy what was perceived as a lack of and a need for global collaboration. The work that the WHO does would have to be invented now if it didn’t exist – global data collection and sharing, global guidance, coordination of supplies and training of health workers and of course global research and development of therapeutics and vaccines against COVID 19.
Jennifer Brennan of the Mastercard Foundation spoke about how a globally-focused foundation thinks about this moment in global history. In her words, we must seize this moment to build the world we want. Mastercard Foundation has been working for almost two decades to support communities and particularly young people both in Africa and in Indigenous communities in Canada. In its pandemic response, the Foundation has focused on both the immediate and the longer term. It has created the COVID 19 Recovery and Resilience Program, which has two prongs: emergency support for health workers, young people and communities in Canada and in Africa, and support to build longer term resilience through access to digital solutions and financing for small businesses as well as e-learning. Mastercard is also continuing its support for the multilateral system of organizations in the UN family such as the Food and Agricultural Organization which is fighting the locust infestation in East Africa. The consistent goal is to build the resilience of all for the future (which includes the crisis caused by climate change).
Every foundation can have a strategic conversation about how to deal with this crisis from the lens of their own mission or purpose. Is your purpose to improve quality of lives, to address the causes of poverty, to relieve distress, to create vital knowledge, to support leaders, to create better policies? Whatever it is, this is your chance to think about responding to what this moment calls for: stepping up, engagement, advocacy, global connection. It’s not a time to close doors but to open them. We face huge transitions. How can we as funders help to make those transitions better? In the late 1940s and early 1950s, many of the multilateral organizations such as the WHO and the FAO that the world depends on were created with the imagination and leadership of Canadians. Canadian foundations were not as active then as they are today. As individuals and civil society organizations we have opportunities now to engage directly in maintaining our global web. And certainly, foundations have the resources. We can support the WHO COVID-19 Solidarity Response Fund today (see below for details). But let’s also use our time now to think about transition, adaptation, resilience and creativity in the 2020s for our country and to advocate for an effective global system that helps us all avoid crises or cope more effectively with their consequences.
Canadian foundations can grant to the WHO COVID-19 Solidarity Response Fund through the KBF Canada Foundation: This is the fastest and only way to contribute directly to global response efforts led by the World Health Organization (WHO). The Fund has raised more than $200m in six weeks and has already disbursed almost half for critical needs.
I participated this week in an important discussion facilitated by Tides Canada and Future of Good on the need for foundation philanthropy in Canada to step up its giving in response to the COVID emergency. The spark for this discussion was a call to action by Give5, a new movement dedicated to encouraging foundations to give 5% of their assets this year to meet urgent needs.
I agree with this call to action. It’s a way to signal the fundamentally new and prolonged crisis that we are all experiencing, and the enormity of the need that has been created by the necessary shutdown. If there was ever a time to do more public good now is the time to do it, regardless of whether your mission statement does or does not include support for the neediest and most disadvantaged.
This being said, philanthropy is facing, as has been noted by philanthropic leaders, a “major reckoning with philanthropic obligation to the present and to the future.” What must we do today and what are we obliged to consider for the future?
In the present, we can begin by considering the capital that is at the disposal of foundations.
Foundations are not just granting instruments. They are deployers of social capital, which can take the form of money but also can be represented through knowledge, brains and networks
How best to deploy that capital for today’s emergency? Give5 is promoting the opportunity to make more money available by spending down more assets. It’s focusing on one part of the capital, money (arguably the most visible part) and one aspect, quantity. The target of 5% focuses our attention on an easily measurable standard. It’s a demanding commitment especially as assets diminish in value. Yet it is powerful as a quantifiable token of willingness to step up.
But what about quality? In other words, how effectively to spend that extra money? There are three important questions that foundations could ask themselves to ensure that quality matches quantity as they ramp up spending.
Targeting, timing and type.
Targeting: how can we best direct our extra dollars? To local collective funds that are able to distribute the funds where there are greatest gaps or needs? What about getting additional money to nonprofits that help other nonprofits, such as Imagine Canada or other sector-specific umbrella groups? What about supporting underfunded advocacy groups needed more than ever as the crisis exposes inequalities in our society? And what about funding global efforts to fight the pandemic through data, and development of therapies and vaccines?
Timing: do we spend this all at once? Spread it over time in this coming year? Everyone is telling us this will be a marathon not a sprint. It’s not about throwing lots more money at the emergency today but perhaps about spreading it over time, in the way that only foundations with a longer-term view can do.
Type: what form should the extra money (and perhaps other forms of social capital) take? Should it be all grants? Unrestricted? Cash? General operating support? What about offering guarantees for credit? What about seeding community reinvestment funds? Can we put more funds into convening activities, or sharing information?
These are not easy questions. But there was arguably never a better or more necessary time to be creative in deployment of capital.
Foundations are great counter-cyclical engines. We can’t afford not to think about what is needed in a world that is changing before our eyes. The present is truly present.
And yet…what about the future? Aren’t foundations built for keeping their eyes on the future, given their endowments and their long-term perspective? In the context of this emergency, as Beth Breeze of the University of Kent put it recently in The Guardian, foundations must think about relief for now and think about the future through funding research and rebuilding efforts.
It’s a false choice to think that foundations must either throw it all into the rescue today versus saving for the fight tomorrow. It’s not just about spending down today versus saving for the future. Big issues are still on the horizon. Climate change hasn’t disappeared. Disparities in the world aren’t going away. Investments are needed today in work that will bear fruit only in the future.
In the end this is a call on foundations to increase their spend this year, of all years, but not to neglect the funding that will lead to systemic changes in the future. The pandemic crisis has highlighted as never before the cracks and outright gaps in the systems of our society. Foundations can help provide social capital to support the work that will change systems for the better in the future.
I am the granddaughter of a historian and I grew up in a family that valued history for what it can tell us about our present and possibly our future. So, I am intrigued by what history might have to say about our responses to the current pandemic. More specifically, I am interested in what history might tell us about the implications for philanthropy and foundations as they struggle to make sense of today.
As a Canadian historian, Prof. Mark Humphries of Wilfrid Laurier University, has noted, “what history teaches us is that in the moment, we don’t always get it right.” Ian Austen of the New York Times interviewed Prof Humphries for a reflective piece on the parallels between the so-called Spanish flu of 1918 (which actually originated in China) and the pandemic of 2020. Dr Humphries wrote a 2012 book “The Last Plague: Spanish Influenza and the Politics of Public Health in Canada.” In 1918, people had a hard time seeing clearly what the implications of the pandemic were for the societies that they lived in. This is true in 2020. None of us have crystal balls. However, it was quickly obvious in 1918 in Canada that in the absence of national data and standards of healthcare, the virus was hard to fight. Provincial responsibility for health care led to fragmented and localized governmental responses and a lack of information which individual philanthropy could do little to fix in the moment. Philanthropy limited itself to providing local relief. The 1918-1920 pandemic led directly to the creation in Canada of the federal Department of Health and the Dominion Bureau of Statistics. Over time, government built a stronger public health system, although it took another epidemic, the SARS crisis of 2003, to create the Public Health Agency of Canada. And we still have gaps in our data that limit effective response. Using hindsight, philanthropy could have focused more over the past century on advocacy for stronger public systems of data, care and prevention.
On a global scale, history tells us that pandemics can lead to huge civilizational changes. According to Parag Khanna and Karan Khemka, in an article on the possible implications of the COVID 19 pandemic for the world, “the 14th-century Black Death caused millions of deaths across Eurasia, splintered the largest territorial empire ever known (the Mongols), forced significant wage growth in Europe, and promoted wider maritime exploration that led to European colonialism.” History helps us see these changes, although we must have some great distance sometimes to see clearly. But even if we can’t begin to see yet all the ramifications of the COVID 19 pandemic over time and around the planet, we can see the vulnerabilities and inequalities in our own society which the virus exposes.
Rhodri Davies of the Charities Aid Foundation in the UK has written a thought-provoking recent article on the lessons of pandemics for philanthropy in British and European history. One key lesson is that government focuses more on its relationship with civil society. According to Davies, past epidemics of plague, cholera and other infectious diseases have led to state efforts to rationalize and centralize charitable relief for the suffering, just as they have led to efforts to build stronger public health systems. The plague years of the late 16th century led to parliamentary criteria for poverty relief (the first stages of a legal definition of charity in 1604 in England).
Plagues highlight inequality and lead (in some cases) to public policy changes that address these inequalities. Davies quotes an English historian, W.K. Jordan: “these frightful visitations of epidemic taught the nation much regarding its own resources and disciplined it in the understanding that the poverty bred by plague must be instantly relieved lest even more terrible social consequences should ensue. Indeed it is not too much to say that men had come to understand that poverty itself was a kind of plague, epidemic in the industrial society.” This is drawn from a history of philanthropy in England, 1480-1660. But it is certainly applicable to today as well. While we have a welfare state that far surpasses that of Tudor England, we still have glaring gaps and inequalities. In many Indigenous communities for example, the gaps are there for all to see. Will this crisis lead to a renewed interest by government in how nonprofits and charities serve a purpose as agents against inequality? What might that mean for the web of rules and regulations that snare these organizations in outmoded ways of operation? Should we be thinking about what we want to change?
While governments cope now with what has been exposed by the crisis, what should philanthropy do? Philanthropy can be a tool for softening the worst impacts within the system as it is. Or/and it can be a tool for more fundamental change. As Davies notes, “philanthropy can be both a tool for maintaining and protecting existing social dynamics and hierarchies and also a means to break down societal divisions and establish new norms.”
What can history tell us about how react to this pandemic, even in its early days? It seems to me that we draw at least these lessons:
What will history say about what happened in 2020? Perhaps philanthropy has a chance to shape what comes next.
I am learning some unexpected things as I look for news about the effects of the pandemic and lockdown. The bad news is all too easily found through print and other media. Watching CNN is a frightening experience right now. But I am also finding much good news, especially through social media. Imagine this lockdown five or ten years ago without such media. We would not be connected to a wider human community that is actively sharing and creating and thinking out loud through a world-wide network. I am learning information that I would simply not have known if I stuck to one or two traditional media sources. Even better, I am discovering creative responses through poetry and music. And I am coming across eloquent reflections on our shared condition that console and inspire me.
Social media pointed me to one of these eloquent reflections by Grant Oliphant, CEO of the Heinz Endowments, a private foundation in Pittsburgh. Oliphant is a thoughtful and articulate practitioner of philanthropy. No surprise then that he has responded to this crisis with some important reflections on the situation that we find ourselves in and the meaning that we can take from it. In The Rescue We Seek, Oliphant summarizes five lessons that he believes this crisis is teaching us all:
In my opinion, Oliphant provides a valuable framework for foundation leaders thinking through and beyond this crisis. “It turns out,” he says, “that justice matters, and so do knowledge, government and nature; it turns out that only by embracing our shared future can we be confident of reaching it.”
How could foundation leaders translate this statement into concrete action? Think about each of these ideas in turn. Justice, knowledge, government (or public leadership) and nature. And consider all of these from the perspective of collective action. We might ask ourselves the following questions.
Justice: what can we do as a foundation to address injustice in the face of this crisis? We have heard about philanthropy’s pledges of action and encouragement to change foundation practices so that we remove the barriers and reduce the power imbalances between funder and recipient. Directing more unrestricted funds to the organizations in our communities that are working to support the worst-hit and most vulnerable should be high on almost every funder’s list.
Knowledge: how can we as a foundation contribute to the knowledge that humanity must have to cope with and overcome this global threat? Even if as a foundation you haven’t previously considered funding research, this is surely the time to seek out opportunities for supporting global collective effort to find therapies, apps to test and trace, vaccines, etc.
Public leadership: how can we as a foundation support the development of effective public leaders to help us through future crises? Leadership is more important than ever. As Nancy Koehn, Harvard historian and author of Forged In Crisis: The Power of Courageous Leadership in Turbulent Times, suggests, we need public leaders who offer” brutal honesty and credible hope”. Those leaders don’t emerge without mentoring and opportunities for growth. Young people are watching now. Koehn notes “This difficult, turbulent time will surely someday be seen, in part, as a fertile, living laboratory in which courageous leaders were made, not born.”
Nature: how can we as a foundation contribute to fixing the damage done to our natural environment? As Oliphant says, “you can view this virus as a plea for sanity from an angry planet, but I view it more as an expression of the obvious: the more we corrupt the air, water, biosystems and climate that give us life, the more vulnerable we become to illness and death.” If not now, then soon, every foundation will need to think about what it can do to build a healthier ecosystem. This is also about justice.
Collective action: how can we as a foundation contribute to the work/ideas/initiatives of others so that we can together be more effective to achieve more social and environmental justice, greater knowledge, better leadership? Everywhere, private foundations, community foundations and other funders are joining forces to respond to the emergency. Coming out of this crisis, every foundation should consider more participation in collective efforts to recover and rebuild.
Oliphant concludes: “We will triumph against this virus, but that isn’t the only test facing us…the deeper and more enduring test is whether we will use what we learn from this affliction to build a less fragile, fractured society.” This is an opportunity for us to expand our vision, and to grow as funders. Good news amid the bad.
Here are three resources to foster collective funding in this crisis (and there are many community-level collective funds in Canada as well):
COVID-19 Action Fund from CIFAR to mobilize the best thinkers across the world and provide the space needed to quickly address COVID-19 and understand future pandemic threats.
Covid -19 Response Fund, to support the World Health Organization in partnership with the United Nations Foundation and Swiss Philanthropy Foundation. Canadian donors can channel funds though the KBF Canada Foundation to the WHO.
Opportunities for Philanthropic Response to the COVID-19 Crisis. The Bridgespan Group provides perspectives on where funder resources can be productively and collectively channeled.