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The confluence of crises spurred by the spread of COVID-19 and concurrent social upheavals demanding racial justice present a wealth of opportunity for philanthropists to rethink their current strategies and create enduring change. Too often, surges in charitable giving are responsive and episodic, failing to address the embedded systems that cause and exacerbate these crises in the first place. And while literally billions of dollars will flow toward cures for both the physical and social problems ripped bare over these past few months, without some strategic thought on lasting solutions, this will have little to show for itself. All this generosity needs a plan.
Examples of the largesse targeting the pandemic are many, some of the largest being the Bill & Melinda Gates Foundation's $125 million partnership with Wellcome and Mastercard to accelerate COVID therapies, Twitter and Square CEO Jack Dorsey committing $1 billion to lessen the burden of the pandemic, and Oprah Winfrey creating a $12 million fund to disburse grants to underserved communities and groups caring for people of color in the cities she has called home. The list goes on. In fact, according to Candid.org, more than $13 billion has been pledged thus far, with nearly 65 percent coming from corporate donors, rather than individuals.
On the one hand, this matches with past trends. After the last financial crisis, studies showed that giving from high- and ultra-high-net-worth individuals paled in comparison to donations from companies. But the sheer scale of this crisis is different. As we turn our attention toward rebuilding—and including racial and economic equality as part of the foundation—it’s important to remember that in the 12 years since the 2008 crisis, the wealth gap has intensified, leaving poor people even poorer, and the wealthy with an even bigger opportunity—and challenge—to take the lead in constructing a better, fairer world.
The good news, however, is that there remains an unprecedented amount of philanthropic capital sitting on the sidelines—an estimated $110 billion—waiting to be spent. These are the very resources that will help address some of the problems being laid bare because of the pandemic. We have a once-in-a-lifetime opportunity to replace societal “Band-Aids” with long-lasting change, but we need to start somewhere, and there are some good options right now.
Take the demand for a vaccine as an example of one area that has required philanthropic investment. Even with the focus and urgency surrounding COVID-19, medical research is still a risky, time-consuming, and expensive process. Philanthropic donations are being used to help financially de-risk early-stage experimental therapies, adopt new methods for clinical trials that reduce costs and speed innovation, and ensure that targeted segments of the population are included. The same can be done for other diseases, too.
Mental health care is another system in need of transformation, a situation also brought to the fore because of the double wallop of a pandemic and social unrest. With the numbers of people in distress at an all-time high, philanthropy can be the force that builds a strong mental health workforce, advocates for better mental health coverage, and even funds the tools that can help provide virtual mental health care via a strong internet connection and a reliable digital device.
Systems change, whether in medical research, health, social justice, or education, can feel like too much to tackle, so people and their capital get stuck. Looking at whole systems, then parsing them into manageable pieces that can be addressed, can provide a roadmap for hesitant beginners. Engaging in philanthropy strategically—not just disbursing money but using your talents and connections as well—allows for listening, learning, and collaborating with peers and community partners. With the right strategy, philanthropic capital can be the disruptor that works with governments and other partners to create a world more resilient to shocks like those we’re experiencing now.
Where should an emerging philanthropist start?
Go beyond your comfort zone to find a new passion. Step away from what your historic giving might look like; instead of funding a building, try building a fund. Instead of adding to a multi-billion dollar endowment at your alma mater, pay for your alma mater adding to the recruiting and outreach efforts toward inclusion of underserved communities. Explore issues that are being deeply felt by the most vulnerable in society. You will often find that’s where the need is greatest. Listen, learn, and lead in partnership with other sectors.
And unlock the funds being held in Donor-Advised Funds (DAFs). DAFs are housing assets that can instead be working toward a cure, changing systems that will save someone in distress or perhaps connecting someone else to a lifetime of opportunity.
This is the only way we can hope to transform existing, malfunctioning systems and leave an enduring, positive legacy.
This essay first appeared in the Milken Institute’s Power of Ideas collection focused on navigating the new health, financial, and social uncertainties wrought by the ongoing pandemic and a reckoning of racial injustice. The essay series features insights from thought leaders across industries. Read their contributions and share your thoughts using #PowerofIdeas. Find more coverage on the Milken Institute LinkedIn page.
The Center for Strategic Philanthropy's report, Stepping off the Sidelines was published in June 2020.