What Space For Philantrophy in Covid-19 Times?

25.01.2021 | Our colleagues Dr. Rolf Alter and Timo Unger contributed in the Philantrophy Impact Magazine with an article about effects on Philantrophy due to Covid-19 | Philanthropies must seize the opportunity to evaluate their current strategies in light of the pandemic and take action to develop a resilient and coherent strategy for the future.

With COVID-19 likely to stay longer than we might have thought, the space for philanthropy within society is in motion. On the demand side, the need for support of typical grantee groups is rising steeply and impacting on previous giving and engagement patterns. Although many philanthropic institutions on the supply side are demonstrating responsiveness, philanthropic endowments will not remain unaffected by the ensuing economic crisis. As elsewhere, the philanthropic sector’s existing tensions and complexities have been revealed under the pressure of COVID-19. Way before the pandemic struck, philanthropy had come under criticism for its lack of transparency and accountability in many parts of the world. Taken together, do these factors indicate necessarily a shrinking space for philanthropy within society, or are there strategies to emerge and build from, reinforced by the current pandemic period?

We would argue that philanthropy should seize the opportunity to evaluate the scope and fit of their current strategies in light of the pandemic and take action for change. To develop a resilient and coherent strategy for future philanthropy, a joint learning process among leading players in philanthropy around three focal points is proposed as a promising way forward.

Across the Organisation for Economic Co-operation and Development (OECD) and beyond, the coronavirus has had severe effects on typical grantee groups, i.e. beneficiaries in the fields of health care, service provision and culture. Ranging from overstressed medical staff, to students and teachers, to actors, musicians and artists alike, the demand for short- and especially medium-term philanthropic support is high and rising. Given the serious implications for economic growth and social development, a well-defined response to existing and newly emerging beneficiaries appears to be more important than ever.

The coronavirus pandemic delivers evidence of philanthropy being ready and equipped to contribute its fair share to society at times when government capacity is already stretched. In many cases, they and their reliable onsite networks are adapting to the emergency. In particular, when top-down government interventions were unable to deliver, philanthropies provided good and quick help. Their responses varied from tried and tested procedures to courageous and experimental actions. Examples range from investing in manufacturing capacities for a variety of potential vaccines to developing comprehensive national testing plans or taking out bonds to jack up funding without drawing on endowments. Against the background of a shrinking global economy, however, philanthropies’ capacities are less likely to dovetail with such actions in the medium term.

Criticisms of the diverse practices of philanthropy itself – articulated way before the advent of COVID-19 – are becoming more obvious. Arguments include the charge of irresponsible accumulation of wealth and the concomitant inordinate source of power. Likewise, critics are not getting tired of articulating a lack of standards such as accountability or transparency in the light of tax exemptions. The serious exposure to pressures from the public to increase their endowments is just the latest example of ongoing precursors to restrictions on the independence and autonomy of the philanthropic sector. Thus, the current challenges to philanthropy revealed by COVID-19 are only part of a bigger challenge associated with long-standing criticism of philanthropic practice.

Indications exist that a number of philanthropies are in fact aligning their giving and engagement strategies to the COVID-19 profile. In many cases, it seems that philanthropies’ strategic approaches focus on prioritising grant-making efforts. Given the latest increase in those in need, and the decrease in philanthropies’ financial resources that is very likely to happen, a reallocation of financial and sometimes personnel capacities seems appropriate. Nonetheless, this will not be sufficient to counter long-standing criticism and negate pending measures. A resilient and coherent strategy for philanthropy during and post-pandemic needs to address the emerging imbalances and pending measures alike.

Recent exchanges and conversations with executives of philanthropic institutions reveal three focal points when looking at resilient and worthwhile strategies:

1. Responding better to public utility by listening more carefully to beneficiaries’ voices and empowering existing support infrastructure

2. Fostering dialogue between actors in philanthropy and government to pave the way for further collaboration, specifically to scale up philanthropic action

3. Earning trust as a licence to operate for philanthropy in view of the present and previous growing public scrutiny.

As a starting point to develop a shared strategy for future philanthropy, a joint learning process among leading actors in philanthropy could be promising.

Public utility, dialogue and trust are, of course, not only key features of future philanthropy. Given the current serious implications for economic growth and social development, they are also guiding principles for mid- and post-corona societies overall. That is to say, that civil society and business must embrace the same principles that favour open, fair and inclusive societies.

To sum up, as beneficiaries’ demand for support is rising with the pandemic, the supply of philanthropic endowments is not likely to keep pace. Although first insights deliver evidence of philanthropy finding strategies to cope with the crisis where government capacity is already stretched, measures addressing the criticism of diverse practices within philanthropy itself – articulated way before COVID-19 – are still pending, thus leaving the space for philanthropy within society imbalanced. Against, some current ideas of pandemic-only driven responses, it has been argued that a resilient and coherent strategy for philanthropy during and after the pandemic needs to be directed at the current mismatch of demand and supply and ongoing measures alike. On the basis of three focal points – public utility, dialogue and trust – a joint learning process among leading actors of philanthropy has been proposed to initiate a shared strategy for future philanthropy being conducive to open, fair and inclusive societies.