The COVID-19 pandemic has cut into noprofits' resources while increasing demand for their services. As they are asked to do more with less money and reduced staff, what can they learn from history and data about navigating the crisis? And how can philanthropy help?
SSIR's publisher, Michael Voss, speaks about the pandemic's impact on nonprofits and how they can respond with Amir Pasic, the Eugene R. Tempel Dean at the Lilly Family School of Philanthropy at Indiana University and a professor of philanthropic studies, and Mary Jovanovich, senior manager for relationship management at Schwab Charitable. The full transcript of the episode can be read below.
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MICHAEL GORDON VOSS: Welcome to Season Two of Giving With Impact, an original podcast series from Stanford Social Innovation Review, developed with the support of Schwab Charitable. I’m your host, Michael Gordon Voss, publisher of SSIR. In this series, we hope to create a collaborative space for leading voices from across the philanthropic ecosystem to engage in both aspirational and practical conversations around relevant topics at the heart of achieving more effective philanthropy.
During this period of extreme financial pressures brought about as a result of the COVID-19 pandemic, many organizations in the nonprofit sector are feeling particularly squeezed as they work to continue to provide support and services to what is already an expanding client population, and at the same time that revenues from services have dried up and donations from their traditional fundraising activities have declined. Every nonprofit leader has had to respond to the pandemic and take steps to help their organization survive. Some have had to lay off staff and cut salaries and others have had to cut programs.
What does history and recent data tell us about what might happen to organizations in the nonprofit sector in the near- and long-term, and how can the philanthropic community help provide vital support to ensure that these organizations are able to continue to support their constituents?
Joining me today to begin to answer these questions are two individuals whose work gives them perspective on the pandemic’s current and potential impact on the nonprofit sector.
Amir Pasic is the Eugene R. Tempel Dean at the Lilly Family School of Philanthropy at Indiana University and a professor of philanthropic studies. Prior to joining the school, Pasic was Vice President of International Operations at the Council for Advancement and Support of Education, an Associate Dean at Johns Hopkins SAIS, and Deputy Director of the World Security Project at the Rockefeller Brothers Fund. Pasic earned his doctorate in political science at the University of Pennsylvania, and is the author and coauthor of many academic articles.
We’re also joined by Mary Jovanovich, Senior Manager for Relationship Management at Schwab Charitable. Mary joined Schwab Charitable in 2015, and has more than 10 years’ experience with Charles Schwab and Company. Mary is involved as a board member with Dress for Success, Indianapolis, and also serves on both the Integrating Women Leadership Foundation Board and Indiana Wesleyan’s Alumni Board. Mary obtained her master’s degree in management from Indiana Wesleyan University, and she holds a graduate certificate in philanthropic studies with the Lilly School.
Amir and Mary, thank you both for joining me today, as we explore the effect that the COVID-19 pandemic is having on the nonprofit sector and the ways that individual donors can maximize their philanthropic impact, and provide support to nonprofit organizations during this challenging time. Let’s get started.
Amir, it’s good to speak with you again. I think you know at SSIR, that we’re supporters of the work of the Lilly school and the insights you produce on the philanthropic and nonprofit sector. I think we’d all agree that with this combination of a health crisis and an economic crisis playing out on a global scale, the current COVID-19 pandemic, is unlike anything the sector has experienced. But can you provide some perspective and learnings from past events, like the 2008 financial crisis or the 2014 Ebola crisis?
AMIR PASIC: Sure. And thank you for having us. The Stanford Social Innovation Review is a key resource for the sector. So we’re very pleased to be with you today.
I think, we’re being challenged in terms of our understandings, because, as you say, this is so unprecedented. But we know that in disasters, from 9/11 to hurricanes that we’ve studied, that giving spikes and people respond often in proportion to the severity of the disaster that we are facing. And, certainly, given the scope and the depth of what we’re facing with the pandemic, it will be interesting to talk more about the surge of response that we have seen across the philanthropic space to the particular disaster.
When you mention recessions, however, I think we see the opposite effect, especially after the great recession. It took many years, several years, for individual giving, in particular, to recover. So in recessions giving does go down, simply because the resources that we have available go down, as well.
But it remains to be seen what the impact will be, ultimately, because our evidence is based on patterns that we have observed since World War II. And we may see some unprecedented behaviors, if, indeed, we’re going to break some of the patterns that we have seen since World War II.
MICHAEL: I assume the answer is yes, Amir, but are we seeing a difference in how this current crisis is impacting different types of nonprofits, say, human services organizations versus arts organizations, and what does that look like?
AMIR: Well, Michael, in the great recession and in other recessions, we do see a difference in terms of the distribution of philanthropic dollars. In recessions, we tend to see people giving more to human services, and postponing giving to arts organizations and cultural organizations, as well. And even though we’re seeing lots of innovations in terms of our arts and cultural organizations trying to stay as part of the response and keeping our society inspired and moving forward, I think we’re seeing some of the same patterns in terms of people really wanting to have an immediate response and having immediate help to those people who are most at risk or most suffering from the pandemic right now.
MICHAEL: So, Mary, let me turn to you for a moment. Amir has shared some of the data on the impact on nonprofits, and some of what they’ve seen as the response from the philanthropic community. But let me ask you, what is Schwab Charitable seeing in donors’ response to C-19 and in helping to support nonprofits?
MARY JOVANOVICH: Well, I’m curious if some may find my answer surprising, because I know in my daily conversations with advisors, most tend to believe that giving has slowed down as a result of COVID-19, and that’s not the case. We’ve seen an increase in both grants specified for COVID relief, as well as to other nonprofits. In fact, since mid-February through mid-June, the total number of grants recommended by donors at Schwab charitable has risen almost 50%, compared to the same period last year. And that’s resulted in over $1.3 billion granted to charity. This includes more than 26,000 grants representing 138 million, to over 7,000 charities, specifically supporting COVID-19 relief and recovery efforts. My experience at Schwab Charitable has taught me that our donors respond immediately and generously in times of disaster or crisis when communities need it the most.
In addition, we try to help and support and educate our donors by partnering with the Center for Disaster Philanthropy to compile CDP-recommended charities for a number of other recent disasters, including tornadoes in the Southeast, the California wildfires, earthquakes, and hurricanes, and so many more. And during these past disasters, Schwab Charitable donors have responded with tens of millions in dollars in grants to help with relief efforts.
Our current environment, people with donor-advised funds can play a critical role in providing support. There was a recent article in the Chronicle of Philanthropy that referenced a 2019 study that found that individuals with donor-advised funds tend to be more generous with their grant-making during recessions compared with other forms of giving, and describe them as crucial rainy day sources of funding for charities during economic downturns. And I know this to be true, and here’s why. I was working with a donor in California, and she said to me, ‘Mary, I don’t know where to stop. There’s so much need right now, and I have the funds in this account for this very reason. So I’m just going to keep giving.’
So think about that for a minute. In the philanthropic world, we always talk about where to start, but in this case, it was where to stop. That’s the power of a donor-advised fund because it doesn’t impact disposable income. So you can give freely, especially in times of crisis and disasters when funds are needed the most.
MICHAEL: So, Mary, I love that 50% increase statistic, and I wish everyone would have that same ethos of, ‘I don’t know where to stop.’ What a great phrase that was. And thank you for mentioning the work that you guys are doing with the CDP, too.
MICHAEL: So, Amir, we know that we’ve seen recently data that showed that while giving was going up in the United States overall, that it was actually coming from a smaller number of people. Any thoughts about the current crisis and what we’re seeing with donors response right now, how that might relate to those past trends?
AMIR: Yeah, I think that’s what our research at the Lilly Family School shows, is that over time, over the last 20 years or so, the number of households who participate in giving on a regular basis has been going down. And that trend was… actually accelerated during the great recession, so that the giving that we’re seeing continuing to go up overall is coming from a smaller number of individuals. So as we see this wonderful surge of support and solidarity across our society, it will be interesting to see if the pandemic provides an opportunity for a reversal of that trend so that we actually do see more people coming back to giving, and expressing their civic solidarity for that very important part of the American tradition.
MICHAEL: Mary, let me ask you, what counsel would you provide to donors to help them maximize their charitable impact during this crisis?
MARY: Our belief at Schwab Charitable is giving is good, but giving wisely is great. So what do I mean by that? First, it involves creating a strategy and this can be done by asking yourself, ‘Is there a particular need stemming from the pandemic or social injustice that is especially important to me?’ Also, consider donating not just locally, but where the need is greatest. This is how we can really get to the heart of the matter, and truly help everyone and create a culture of caring. Quality is better over quantity. Can you find ways to double your gift with a match through your employer or join a giving circle? Have you ever considered giving something other than cash, like publicly-traded securities, or real estate, or privately held businesses? Talk with your CPA and financial advisor to determine if there’s a better asset to use that could potentially result in your ability to give even more money.
There may be some listening who received a stimulus check and maybe for you, you’re fortunate, like me, and don’t need all the funds. Is there a way that you can direct some or all of those dollars to a cause that can help others in need?
And I think it’s really important to point out that philanthropy is much more than simply giving money. We call it the five Ts—time, talent, treasure, testimony, and ties. I serve on three nonprofit boards and some of the best gifts we get is time and talent. Experts who come in and share their skills to help advance the cause can be more valuable than a monetary donation. The same is true with testimony. Invite others to help out with your cause or causes, or even to pursue their own charities.
And, finally, reevaluate your charities with consistency. My a-ha moment during COVID was that I care for nature and the outdoors more than I ever thought I knew, but COVID brought that to the forefront for me. In the past, I’ve never supported the environment, the parks, or the bike trails, but that’s where I’m spending all my time right now. So what you may support now may not be your passion later. So don’t let your giving be on autopilot. Be engaged and get involved. 2020 has me reevaluating my priorities and the causes I want to support going forward.
MICHAEL: So that’s a good transition because you’re talking about evaluating the charities they want to support. And, Amir, we’ve been talking a little bit about the giving, the impact of giving, with past and the current crises, but from the learnings that the Lilly School has, what, if anything, can we determine about the near- to medium-term impact for nonprofits?
AMIR: I think many nonprofits are in trouble. Some of them are shedding staff. When we survey them, and the research that will come up, being released soon, is that, you know, over 60% of nonprofits are anticipating significant decreases in terms of their fundraising ability. And I think many of them will be in crisis further, depending, in part, also, in terms of how federal help continues or does not continue going forward.
At the same time, we’re seeing a lot of energy of the response that’s happening from the donor side. We’re seeing a lot of innovation, if you could imagine, with the amount of events that are so important for nonprofits. Many of these are moving online with very unusual forms of success. Nonprofits seeing more people coming to virtual events than they would have seen in personal events. And we’re also seeing innovations in terms of people meeting with donors in Zoom situations or online video situations, as well.
So there is certainly a sense of crisis and pressure for many nonprofits because their services are increasingly… many of them in the human services, increasingly in need, and yet there is the sense that their sources of revenue are going to be under severe pressure at the same time. So there’s a lot of furious innovation going on that is quite inspiring in many senses. So it’s really gratifying to see that the donors that Mary is talking about are really stepping up to support really good work on one hand, on the other hand, also, to support the survival of some of the key organizations in our civil society and make sure that they stick around and do not close shop, because once they close shop, we may never see them again.
MICHAEL: That’s an excellent point that Amir just made about the long-term survival of civil society organizations. Mary, if I can ask you a question, what are some of the best things that we can do to help provide donors with suggestions for where to find additional source of information, you know, especially as they’re trying to think through their support of nonprofits in the current environment?
MARY: We offer a comprehensive list of nonprofits vetted by the Center for Disaster Philanthropy that are on the forefront of the battle against COVID-19, and it’s publicly available on our website, www.SchwabCharitable.org.
MARY: In addition, we have also updated our website to offer links to websites, articles, and charity search tools that can help you activate your charitable giving to support nonprofits working to provide equal justice for all. And we also have a Charities tab, one of the things that I’m most proud of, for nonprofits to access to help them increase their fundraising with some ideas and suggested related to giving.
And I like to use LinkedIn as a resource to follow well-established experts in the field. It’s a great way to stay current and up to date on patterns and trends. And, in fact, you can link in with Schwab Charitable to follow our updates and guidance. And I would be remiss if I didn’t mention the Lilly School of Philanthropy and their incredible resources that they have out there, whether it be from the school, itself, or the Women’s Philanthropy Institute or the Fundraising School. They have tremendous resources that donors can actually take advantage, of as well.
MICHAEL: Amir, Mary, thank you, both, for your time today. I know there’s so much more that we could talk about. This is certainly a challenging period for us all, but I think we all realize it’s a particularly difficult time for many members of the nonprofit sector, and it’s good to see the dedication to ongoing support from the donor community.
Thank you for listening. We hope you’ve enjoyed this episode. Please consider leaving us a review on Apple Podcast or your favorite listening app, as it helps others discover the show. We encourage you to listen to other episodes in this series, as well as other podcasts from SSIR. This podcast series is made possible with the support of Schwab Charitable, who played an important role in the selection of topics and speakers. For important disclosures and a transcript of this episode, visit SchwabCharitable.org/ImpactPodcast.
