Giving Compass' Take:

• Charles Casey argues for increasing payout to meet the increased needs of communities created and compounded by the COVID-19 pandemic. 

• What does your current payout look like? Are you equipped to give more? Where can increased payout do the most good?

• Read a further argument for increasing funding during the pandemic

As foundations and donors grapple with everything going on in our world right now—a global pandemic, human rights protests in response to systemic racism, police brutality of Black citizens, climate change, fires, and other natural disasters, as well as unequal access to education, housing, and living-wage employment—there is a rising call for foundations and donor-advised funds (DAFs) to increase payout (either temporarily or permanently) to meet growing needs. The call to increase payout has cut across sectors and gained momentum when an open letter to Congress was drafted in May, which has since garnered over 550 signatories, including prominent philanthropists, foundation leaders, nonprofit executives, and government officials.

Advocates for changing the payout requirement point to hundreds of billions of philanthropic dollars sitting in investment accounts that could be used to sustain the critical work of nonprofit organizations supporting immediate social, environmental, and health needs. Simultaneously, as these organizations continue to face increasing demand for services, it is estimated that nearly 38 percent of nonprofit organizations could close as a result of the pandemic and its economic impacts. According to a recent article published by Philanthropy News Digest, the Institute for Policy Studies estimates that a mandate to increase payout would result in foundations and DAFs releasing an additional $200 billion — of the approximately $1.2 trillion they currently hold — to nonprofits impacted by COVID-19.

Read the full article about increasing payout by Charles Casey at Pacific Foundation Services.