Long-Term Trust Sparks Quick, Meaningful Action

The COVID crisis underscores the need to address short-term and long-term emergencies like the virus's disproportionate impacts caused by centuries of structural racism, and the very real threat to our democracy in this critical election and census year. 

Philanthropy can and should play a major role by meeting the immediate crisis and supporting long-term power building through community organizing, civic engagement and strategic communications efforts to promote systems that work better for everyone, particularly communities of color and low-wealth people.

As COVID-19’s devastation began to ripple through the country, we took fast action. As a relatively small grantmaker (assets of $200 million before the current economic distress) and a growing focus on racial equity and power-building as ways to move people and places out of poverty, we knew we needed to do something significant. As we wrote a few weeks ago, we made emergency grants to all grantee partners, extended an additional year of general operating support and adjusted our funding for community development financial institutions. 

Over the last few weeks, several of our foundation colleagues have asked us what made our response possible. In addition to the urgency of the moment, several aspects of the way we work facilitated the manner and speed with which we responded.  

Trust-based relationships are our bedrock.

We often invest in places and strategies for at least ten years, deploying grants, program-related investments and staff time, and introduce other funder relationships when we can. We spend significant time in the places we work, learning from our grantee partners and their allies about the context—the issues, needs, challenges, key actors, strategies, strengths and opportunities. We ask lots of questions and get in real dialogue.

These open lines of communication helped us understand the scope and scale of the pandemic quickly. We heard a lot about financial insecurity and the need to reimagine the work. While we don’t intend to burden our partners with formal reporting requirements, we are staying in close touch to understand how the pandemic is creating new challenges and demands, and how they are adapting. Our hope is real-time discussion and reflection will give us the best results and cost our grantee partners the least.

While imperfect, these practices give us great confidence in our partners’ work and make fast decisions possible. We trust the nonprofits we support have the knowledge and experience to make good decisions – better than we could for sure. 

Multi-year, general support grants are our starting place. 

For close to 20 years, the vast majority of our funding has been multi-year, general support grants. Since the COVID crisis began, the bulk of our financial response has been one-year automatic extensions and accelerated payments of existing grants. Given the extent of the challenges and uncertainty our partners face, we decided an additional year of funding would provide them immediate flexibility. We have long been convinced this approach to grant-making helps create strong and effective organizations and networks that can respond to any circumstance. This crisis underscores that experience.

Urgency and opportunity redefine financial prudence.

Generally, our board seeks to balance social impact and financial prudence, but crises like this one redefine “prudence.” During the financial collapse of 2008, the board decided to boost our grantmaking even as our portfolio was taking a hit because our grantee partners told us other funders were pulling back. Similarly, the board recognizes COVID is a time for action. We understand pulling money out of the market at a low point will have a financial toll if and when the markets rebound. We ran a few financial projections and estimated we might lose a little over $1 million in future gains. While that is a meaningful sum for a small foundation, we deemed it worth the investment, given our growing commitment to racial equity, our strategic focus on economic opportunity and civic engagement, and the unprecedented weight of this historic year. 

Our communities deserve a better normal. 

Our goal is not to return to normal. Our goal is to create a better normal. No doubt this crisis will make us reimagine how we work, review our assumptions and approaches, and have more productive dialogues about systems and power. We are staying in close communication with our grantee partners to understand the needs and opportunities this moment of great peril presents. We will share these lessons when they feel useful and appropriate. We also hope to be in touch with our grant-making partners as we all explore how to catalyze an inclusive recovery now, and fuel the changemakers fighting the long game for policies and systems that serve us all equitably. 

This is part two of Justin's two-part blog about COVID-19. Read part one here.