Memorandum on COVID – 19
From the Desk of:
Robert C. Happy, Jr.
President, Averill Fundraising Solutions
To: Averill clients, past clients, and friends
From: Robert C. Happy, Jr.
Re: COVID-19 and Philanthropy
Date: March 17, 2020
During my professional career, our nation has experienced terrorism, war, recessions large and small, dramatic losses (and gains) in financial markets, and now, the COVID-19/Coronavirus pandemic. The pandemic has altered the way every American lives.
While the COVID-19 pandemic is unprecedented, and many questions cannot be answered today, we do know the following:
- Philanthropy has averaged about 2% of GDP since these statistics were tracked, starting in 1978.1
- While it’s true that philanthropy follows the stock market, declines in philanthropy have never matched market downturns. The Great Recession resulted in a decrease in philanthropy of 7%, while the S&P Index declined 38%.
- An overall decline in philanthropy has been experienced just twice in the past 35 years: in 1986/1987 due to a change in the tax code that prompted early giving, and in 2008 and 2009, due to the Great Recession.
We are just entering the phase of “social distancing,” which unfortunately may be replaced shortly by social isolation. Even – and perhaps especially – in the midst of the current uncertainty, there’s an opportunity to leverage the very human inclination toward engagement and the desire make a positive impact. With that in mind, some commentary:
- People are generous – more than $427,071,000,000 was given to not-for-profit organizations in 2018.2 (2019’s numbers come out in June of this year.)
- Philanthropy continues to hold the fabric of our communities together. Whether a faith-based, healthcare, human service, educational, or professional/membership association, your organization is vitally needed in your community/communities – likely now more than ever! The needs you serve will not decrease during this time in history. Accordingly, nor does the necessity for your organization to advance its mission.
- People want to hear from you. You’ll recall that in 2008/2009, donors wanted to know how you were doing. They asked how the recession affected your finances, team, and ability to fulfill your mission. They’ll want to know how you’re doing now, too!
Some advice from us:
- Keep the conversations going. It’s clear from the chart above that giving will continue, but become more competitive. Pulling back will affect your organization negatively, and we have learned from history that stopping gains us nothing.
- Adjust your communication strategy – we can help with this – and, as appropriate, use digital platforms (e.g., FaceTime, videoconferencing) in place of face-to-face meetings. Your constituents will appreciate it!
- Be empathetic, and listen carefully to prospective supporters to gauge their readiness to receive a gift request.
- Keep asking. The decline in philanthropy experienced in 2008/2009 was due in part to a decline in gift requests.
- Be proactive, but be patient. Understand that in times of uncertainty and steep market declines, donors may feel the need to take a “wait and see” attitude, especially with regard to making multi-year commitments. This may require you to adjust timetables.
Please know your colleagues at Averill are thinking of you and your team. Don’t hesitate to contact us with questions, concerns or simply to process the most effective way forward.
1Giving USA: The Annual Report on Philanthropy for the Year 2018 (2019). Chicago: Giving USA Foundation
2Giving USA: The Annual Report on Philanthropy for the Year 2018 (2019). Chicago: Giving USA Foundation