Thursday, January 7, 2021

COVID-19, Nonprofits, and the Future of Giving

DownloadThere have been a number of notable COVID-19 related developments for nonprofits, some bad, some controversial, and some good.

On the bad side, the Johns Hopkins Center for Civil Society Studies reported that the job recovery rate for nonprofits declined to 1.9 percent for November, and that full recovery for the sector could take almost two and a-half years, based on Bureau of Labor Statistics data. As of November, the nonprofit sector was down nearly 878,000 jobs as compared to February 2020, or about 7 percent. (Hat tip: Philanthropy News Digest.) 

On the controversial side, NPR reported that at least 120 foundations had received collectively more than $7.5 million in federal Paycheck Protection Program funding. Some of the foundations have ties to very wealthy individuals, including the Walt Disney family and Warren Buffett. While there is nothing to indicate that it is illegal for the foundations to claim this funding, doing so of course raises public perception concerns at a time when many Americans are struggling to make ends meet.

On the good side, charitable giving surged both on Giving Tuesday (up 25 percent) and through the third quarter of 2020 (up 7.6 percent), Reuters reported. This comes on top of longer-term positive trends in giving, including the addition of 13 more billionaires to the Giving Pledge (now up to 216 in total) and increased corporate giving from 2017 to 2019. And of course there was the dramatic announcement from MacKenzie Scott that she has given away nearly $4.2 billion since July.

All is not rosy with charitable giving, however. A consulting firm reported that more than a-third of Americans plan to donate less or no money to charitable causes in 2021 as compared to 2020, although its research also found stronger expected giving among younger Americans as compared to older ones. And Nicolas Duquette (USC) has now published his article showing that from 1960 to 2012, "[t]he share of donations accounted for by a minority of top donors rose sharply . . . both because the largest gifts have grown larger and because more households give little or nothing in any given year." The New York Attorney General also released the latest Pennies for Charity report, showing that of 824 fundraising campaigns conducted in 2019 by professional fundraisers in New York, 28 percent or over $384 million was paid to the fundraisers and in 17 percent of the campaigns expenses exceeded revenue. Finally, a coalition of wealthy donors and big foundations has formed the Initiative to Accelerate Charitable Giving to urge Congress to force foundations and donor advised funds to spend more of their accumulated funds because they believe "[e]xisting laws deliver significant tax breaks upon initial funding, but do not provide sufficient incentives or requirements to ensure that these funds will ever be distributed to working charities."

Lloyd Mayer

https://lawprofessors.typepad.com/nonprofit/2021/01/covid-19-nonprofits-and-the-future-of-giving.html

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