Do times of crisis bring out the best in us? Undoubtedly it can go either way but our recent study on the philanthropic response to the COVID 19 crisis suggests significant goodwill and support surfaces in such times. The report demonstrates the willingness of Irish donors to respond to the extraordinary challenges emerging as a result of the pandemic.
But the report tells us so much more. It provides key insights on giving, most particularly organisational giving, that of trusts, foundations and corporates.
Philanthropic trusts and foundations responded promptly to the crisis as it emerged. Reactive responses are not always synonymous with philanthropy given the strategic considered nature of such giving. But philanthropy has the freedom to be flexible, to act quickly, to be agile in its response.
These qualities were very evident in fundraising foundations. The study notes that, 90% made additional funds available, 60% adjusted the terms and conditions of their current grant commitments and 30% created an emergency response.
More formally established philanthropies responded by looking to support their current grantees, adjusting terms and conditions of funding, allowing greater flexibility and generally being supportive regarding future funding. Adjustment to terms of grants is very much within the gift of philanthropic organisations, enabling a responsive approach to grantee needs, a real and positive value attaching to philanthropy.
The study further notes the use of intermediary foundations as the vehicle for emergency response funding by other philanthropic organisations. 42% of Trusts, Foundations and Corporate donors gave via an intermediary foundation. Collectively intermediary foundations made 386 grants to the value of €5.5m at time of study completion. Further, 62% of all funding to the Community and Voluntary sector was granted through one of five intermediary organisations.
These organisations also reported receiving high levels of requests for funding, a significant % of which were unsuccessful (an indicator of outstanding need). Evidently, intermediaries play a critical connecting role for donors and grantees, built on experience, trust and understanding. They were proactive in addressing challenges emerging in the crisis, an opportunity for philanthropy as noted in a recent McKinsey study of European philanthropy.
The focus on Corporate giving in the study is heartening. Of the estimated €28m raised, 40% is attributed to corporates. Further, the level of in-kind support conservatively estimated at €1.8m, is an indicator of how real benefit can be accrued through strategic non-financial giving.
In contrast to other European countries, Ireland has a very low number of independently structured corporate philanthropies. Highlighted as an opportunity and a challenge in the 2010 McKinsey report analysing philanthropic giving in Ireland, to date there remains less than a handful of such entities. As the current study notes, the key question is whether this acceleration in corporate giving can be maintained in 2021.
While the report contains many other valuable insights, a final piece to highlight here is the importance of relationships in philanthropic giving. Most donors gave in the first instance to current grantees and then a mixture of organisations, both known to them and new. Notably, 37% received no requests for funding – the importance of the ask.
Will donors who responded during the crisis remain engaged? Moving to a much hoped for stability phase in 2021, charities, just like businesses, need investment to both reposition and continue their work. Needs will continue to emerge as we experience the ‘new normal’.
With the challenges ahead, both COVID-19 and non-COVID-19 related, the need for philanthropy is great. Philanthropy can be an enabler of change. What we have learned from the crisis phase is we are resilient, and kindness is contagious. But there is a substantial gap between need and estimated funds. How can we close this gap? Philanthropy can make a real difference and the potential is great. Now is the time for philanthropy to make its mark. Let’s champion its role in adding value and making an impact.