A time to demonstrate philanthropy at its best
I hesitated writing this piece. Because everywhere I look, be it news websites or Twitter or Facebook or anywhere else, people are talking about the COVID-19 pandemic. Personally, I feel I need a break from it, I was therefore intent on writing about something unrelated, namely fundraising regulation.
But that will have to wait until next month.
I do think that I need to share my reflections about what the pandemic means for the charities sector, and Australian philanthropy in particular.
The pandemic has shaken Australia at its roots. Supermarkets have empty shelves because of panic buying, which actually hurts the most vulnerable people in our community. There’s major disruption happening across our entire society, and it’s hitting the charities sector too. Whether it’s the arts, disability services, or higher education, the diverse parts of the sector are feeling the impact of the pandemic.
Those charities who rely on trading for some of their income such as social enterprises, those reliant on income from events such as the arts, and those that operate in more marketised parts of the sector, such as disability services, will be hit particularly hard.
The charities sector, and its various diverse components, need government support, because otherwise many charities may well hit the wall. And that will have dire consequences for those whom they serve. But at the moment it’s not even clear whether charities qualify for the stimulus measures announced by the Australian government last week.
Whilst it’s clear that government support is needed, Australia’s philanthropic sector also needs to be thinking about how it responds to the pandemic.
In terms of what I think is a best practice response, one example is this statement issued by the Barr Foundation in the US. Another example is this joint statement that’s been coordinated by London Funders, co-signed by various philanthropic organisations.
Given all that is happening in Australia and the world at the moment, and how it is buffeting the charities sector, there are four things which I think Australian philanthropy needs to do.
Australian philanthropy needs to reassure those organisations that it funds that it’s “there for them”. This is partly about letting them know that operations within Australian philanthropy will continue, even if different arrangements are put in place during the pandemic.
But it’s also about something broader. Australian philanthropy doesn’t exist for its own benefit, but for the benefit of charities and those whom they serve. It needs to make clear that this is the principle which will guide philanthropy’s response now, in six months’ time and in a year’s time.
Australian philanthropy needs to be flexible with the organisations it funds. Some or even many of the objectives set out in grant agreements just a few weeks ago, let alone a few months or even years ago, may well not be able to be met on time. Some may well not be able to be met at all. Having open conversations about what can be achieved and what can’t be, and what additional support may be necessary to support charities during this time will be vital.
Linked with flexibility is responsiveness. Australian philanthropy needs to anticipate that it may need to provide additional support to the organisations it funds. If an organisation is facing collapse and needs additional support now, it won’t be very helpful to tell it to put in an application in the next grant round coming up in three months time.
Australian philanthropy may need to act faster than it normally acts, responding rapidly as circumstances and needs change. We often talk about philanthropy being nimble and dynamic, and this is an opportunity to demonstrate that during this pandemic.
Australian philanthropy itself will take a hit because of the pandemic. That’s because the market crash and the likely recession will have a major impact on assets and income of philanthropic organisations that rely on a corpus. My concern is that this may lead to the self-preservation instinct to kick in amongst some philanthropic organisations, which may decide to reduce the value of their grantmaking. This would be a bad outcome for Australian charities and those whom they serve, and would only compound that other challenges they are experiencing. That’s why I think that one of the most powerful and significant commitments that philanthropic organisations can make is that they will not reduce their grantmaking, but will actually keep it at the same level for this year and at least for the next year. Whilst some philanthropic organisations are limited by their trust deeds to only spending income and not capital, many, if not most, aren’t. They can take a hit, dip into their assets to keep grants flowing, and make it back over time as the market recovers.
One question that I have is about what impact the pandemic will have on individual giving in Australia more broadly. The recent bushfire crisis saw a remarkable surge in giving, but it’s not clear what may happen in the current circumstances.
If individual giving decreases, as people react to uncertainty and the likely recession by cutting back on their discretionary spending, then that will again have significant implications for charities and those whom they serve. It would make a bad situation even worse, and would only further underline the need for philanthropic organisations to maintain or even increase their grantmaking.
As I mentioned at the start of this piece, I didn’t really want to write it. But now I have, I’m glad I did. Because as a person who passionately believes that philanthropy has a unique and vital role in our society, it made me realise how this is one of those moments where philanthropy at its best can really make a difference. And over the coming months and beyond, I do hope that we see Australian philanthropy at its best.
This article was originaly published in Pro Bono News.