We all know that nonprofits—which foundations depend on to pursue shared goals—are facing unprecedented challenges. Already in May of 2020, when CEP surveyed its nationally representative grantee panel, 80 percent of nonprofits said they had or were planning to tap reserves; more than 60 percent had or planned to reduce staff wages, benefits, or hours; and 49 percent had or were planning to lay off or furlough staff.

Small community-based organizations serving those hardest hit by COVID-19 and its concomitant economic impacts (disproportionately Black, Latino, and Native American people) are facing the greatest difficulty. They often face brutal twin realities of increased demand for their services and simultaneously decreased revenue.

The current crises aren’t just revealing inequities: they’re exacerbating them in ways that could last generations. Foundations, by virtue of their long time-horizons, have the opportunity to be a counter-cyclical force—and the great news is that many have. While donations from everyday givers and fee-for-service revenue have declined, foundation support has emerged as the most stable revenue stream for nonprofits.

I believe that, to maximize their effectiveness, foundations should spend more than they planned—and more than the legally mandated minimum—in this period of unparalleled crisis. Moreover, it won’t be nearly as challenging to do so as many had feared months ago, owing to the strong market returns that have buoyed foundation endowments.

Read the full article about foundation spending during crises by Phil Buchanan at Stanford Social Innovation Review.