In recent years, we have collected data on how our community of lean funders is responding to the pandemic. In April 2020, we surveyed members on what they planned to do. We shared those findings in this report.
The next year, our 2021 Foundation Operations and Management Survey (FOMS) collected more detailed information on how lean funders were responding to COVID. While these two surveys are not a perfect comparison, they give a sense of how lean funders anticipated responding, compared to what they actually did. Here, we examine the changes lean funders implemented in 2020, and reflect on how they continue navigating pandemic uncertainty.
In April 2020, 79% of funders planned to change their funding approach in response to the pandemic. Fast forward to 2021, we found that 99% of respondents made at least one change to their funding approach because of COVID.
In both surveys, we asked funders to share how they changed their grantmaking strategies. We also inquired about their plans to increase funding.
In the 2020 FOMS, more funders explored a variety of grantmaking changes. But a greater percentage of funders implemented at least one change to their grantmaking in 2021. This could suggest that at the beginning of the pandemic, funders were exploring more strategies. Yet, as it wore on, they settled in to focus on one or two.
More flexible funding
At the start of the pandemic, a lot of lean funders converted program specific support to a more flexible form of funding. And for many, moving towards general operating support changed the foundation’s overall approach to grantmaking.
“Prior to COVID about 40% of our grantmaking was unrestricted—now due to COVID nearly 100% of our grants are unrestricted,” says Lauren Scott of the Harris & Eliza Kempner Fund.
However, some funders say their grantees wanted to return to project and programmatic grants.
“During the first year of COVID, we offered unrestricted grants to almost all of our grant partners with a very short application and quick turn-around, rather than our traditional project-based funding. At the start of our latest grant cycle, we thought organizations would want that again. But when we asked, we found that most wanted to go back to the project-based larger awards of our traditional cycle,” says Meg Ramsey of the Ramsey McCluskey Family Foundation.
A commonality in both approaches—continuing flexible funding versus returning to programmatic grants—is centering the needs of one’s grantee partners.
In early 2020, 50% of funders said they planned to increase their payout in response to the pandemic. However, our 2021 FOMS found that 43% of foundations actually did.
Family foundations were more likely to increase payout than independent and other types of foundations. And of those who did, payout increased $46,000, on average (median $100,000).
Funder/grantee relationships in the age of COVID
Going from meeting with grantees in person to doing so virtually is one of the biggest changes from COVID. As a result, this has fundamentally reshaped how funders and grantees build relationships.
“COVID-19 has made it more challenging to build relationships with new potential grantees. Although it’s possible, it has also meant that the kind of relationship we have with them is not as strong as organizations we were supporting before COVID,” says an Exponent Philanthropy member.
Other funders expressed concern that COVID puts a greater burden on nonprofits to maintain relationships with funders.
“COVID has been a barrier to some extent, in that it has limited in-person events that reach out to funders and educate a large group of people in a single event. It puts more of a burden on the charity to educate all potential funders individually. In some cases, the foundation isn’t updated in as timely a manner as it would be in a non-pandemic environment,” says another Exponent Philanthropy member.
Because of these shifts, funders have had to adopt new strategies to build and maintain relationships.
For example, the Ravitz Foundation’s Carole Shifman surveys grantees about the impact of COVID on their work. She also provides added flexibility. Meanwhile, the Wilson-Wood Foundation’s Susan Wood adopted a quicker decision-making process to shorten the timeline between applications and approvals.
Across the board, lean funders say the pandemic helped them realign work to be more relationship-focused.
“Particularly during COVID, we’ve made an effort to more regularly check in with grantees outside of formal reporting processes, just to see how things are going and hear how we can help,” says Erica Pressman of the Howard and Geraldine Polinger Family Foundation.
Questions for reflection
Lean funders continue to play a key part in helping their communities and grantee partners navigate the pandemic. Looking ahead this year, we encourage you to reflect on a few questions:
- How did we change our funding over the past two years? If COVID magically went away tomorrow, what would stay?
- How can we continue centering the needs of our grantee partners in our philanthropy?
- How can we find new ways to build and maintain strong relationships with our grantee partners?
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About the Author
Brendan McCormick, associate director, research and publications, works with Exponent Philanthropy’s staff, members and partners to develop research and resources that relate to foundation impact and evaluation, and foundation investments. He also leads the organization’s efforts to learn more about its community of lean funders.