A Welcome Shift in the Philanthropic Paradigm
On June 10, national news outlets including The New York Times reported “Leading Foundations Pledge to Give More, Hoping to Upend Philanthropy”. The news that five major foundations – the Ford Foundation; John D. And Catherine T. MacArthur Foundation; the W. K. Kellogg Foundation; the Andrew W. Mellon Foundation; and the Doris Duke Charitable Foundation – through borrowing and other financing plans would increase their giving by a cumulative $1,725,000,000 and distribute the funds by 2022 is a much-needed shift in the philanthropic paradigm. The move was said to be in response to the “existential challenge” brought on by COVID-19.
In a unique financing plan, Ford, MacArthur and Duke plan to issue bonds to finance their increased giving, an option made possible by low interest rates. The foundations hope to earn a high enough return on their investments to pay the interest on the bonds. Observers in the not-for-profit field are hoping that this decision will spur other well-endowed institutions – colleges and universities, community and other foundations, museums, research institutions – to follow suit.
There has been talk in the not-for-profit community that the international emergency of COVID-19 would provoke a dialogue about philanthropy, and perhaps transform the giving practices of organizations that have enormous endowments and benefit from federal, state and local tax breaks. That conversation has begun and we welcome it!
For more of our thoughts on engaging supporters during COVID-19, please click here.
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From the desk of:
Bob Happy has more than 35 years of experience providing expert leadership and direction to clients across the not-for-profit sector. During his career, Bob has served more than 2,000 clients and has guided them to raise more than $3,500,000,000.