When the world changes, does the way we give change, too? Does a crisis affect how much we give and to what?
Philanthropic organizations lack the authority and trillions of dollars government can use to respond to a public health emergency. But in times of crisis, philanthropic giving is crucial in immediate response efforts as well as ongoing relief — both before the government agencies have time to process their response and again later, when the after-effects of the crisis persist.
So does the philanthropic sector show up in times like this, when we're coping with a public health crisis, by giving more?
$600,000, increase in Community Foundation of Greater Chattanooga's charitable disbursements from the first quarter of 2019 to the first quarter of 2020
For historical context, let's take a look back to the economic recessions of 2001 and 2008.
As one might expect, nationally, philanthropic giving declined following both recessions. According to an October 2012 study by the Russell Sage Foundation and the Stanford Center on Poverty and Inequality, the growth rate in charitable giving between 2009 and 2011 was, at the time of the study, the lowest of any two-year period since 1971, with the exception of the recession of 2001. But, while overall giving declined, that's not an indication that Americans scale back their charitable donations to protect their own finances in times of increased need. Americans continued to give roughly the same proportion of their incomes following both downturns in the 2000s as they did before. The decline in giving tracks the overall downward trends in the broader economy, with overall giving decreasing along with Americans' collective income, the study suggests.
What does seem to change is the causes that giving is directed toward. People and foundations tend to target their dollars toward the greatest needs in times of crisis, giving the same amount or more as they did before the crisis to social service agencies that address those needs.
"In 2019 we had 215 gifts to four different [Community Foundation of Greater Chattanooga] funds totaling $658,618. By comparison, in 2020 so far we have received 395 gifts combined to our Tornado Relief and COVID Response funds totaling $1,989,034. So a jump from $658,000 to all of our funds in 2019 to nearly $1.2 million to just two of our funds halfway through 2020."
— Marisa Ogles, vice president of donor services, Community Foundation of Greater Chattanooga
On a national level, research by former Congressional Budget Office director Douglas Holtz-Eakin and Cameron Smith suggests that foundations directed their dollars to respond to greater needs in the wake of the recession of 2008. In 2009, foundations directed nearly 65% of their grant funds to states with high unemployment and high mortgage delinquency rates. Only 19% of grants were awarded to those areas the previous year, according to Holtz-Eakin and Smith's research.
Feeding America, an organization that supports a network of 200 food banks nationwide, saw a 50% surge in giving in the final quarter of 2009 over the same quarter in 2008, The Chronicle of Philanthropy reported in February 2010.
That's something Rachel Gammon, executive director of Northside Neighborhood House, has seen as well. NNH has been providing assistance to Chattanoogans for nearly 100 years, and in times of widespread crisis, she's seen the collective focus shift to basic needs support like the utility and, now, rental assistance her organization provides alongside financial literacy education and holistic support resources. In the wake of the coronavirus and the Easter Sunday tornado that ripped through the Chattanooga area, she says national funders have given generously to help prop up those needs, sometimes at the expense of secondary quality of life issues like the arts.
"For us as an organization that provides basic needs support to keep people housed and keep people's utilities on, when we have gone to larger funders, they see the need for that and identify with that. Because we're in the business of basic needs support for families and keeping them stable, even through the recession we were blessed with generous gifts and did not have to turn people away for that support," Gammon says.
39, percent of Northside Neighborhood House's clients in June who had never asked the agency for help before.
Local giving and the pandemic
From delivering hand sanitizer to homeless camps to sewing masks for people working on the front lines to setting up phone networks to make sure older adults have what they need, Chattanoogans immediately stepped up to help those most affected by the coronavirus pandemic.
The widespread effects of the pandemic made it difficult for the average person quarantining at home to know where their dollars and manpower were most needed. According to a survey conducted by Fidelity Trust, one-third of respondents said they didn't have the information necessary to understand where to direct their support effectively.
Many turned to community foundations and emergency response funds, which are particularly useful in times of crisis as they serve to connect donors with local projects that best meet immediate needs in the community. These funds provide grants to organizations that are best able to identify the most pressing needs because they work directly with people most affected by the crisis every day.
"We want donations to go to the highest areas of need, but we understand that donors have their specific preferences, too. I think that is going to be something interesting for us to trace — are they going to want to donate to very specific things or are they more likely to be willing to say 'put it where you need it most.'"
— Stephen Van Gorp, vice president of communications, United Way of Greater Chattanooga
In March the Community Foundation of Greater Chattanooga established the Community Response and Relief Fund, which raised more than $1 million to help lessen the health and economic impacts of the COVID-19 pandemic on local communities that have been disproportionately affected by the virus. The foundation worked with United Way of Greater Chattanooga to distribute the first round of grants, which amounted to a total of $560,000, to 14 local organizations working to meet immediate needs in the community, such as providing meals for children while they were out of school and rent and utility payments for people who lost their jobs.
United Way was also quick to establish its Restore Hope Fund to assist those financially impacted by the virus. Through donations from individuals, foundations and companies like TVA and EPB — which offered to match up to $50,000 in donations to help revive the local economy — the fund raised more than $500,0000 since it launched in March. Those funds were used to help people, many of whom had never previously requested help from United Way, with immediate needs such as rent and utility payments.
"We saw people who had not given in a long time or were completely new, at least for United Way," says Stephen Van Gorp, vice president of communications for the local United Way, noting increases in donations from individuals as well as in major gifts from both corporate and individual donors who have the capacity to do so.
Another spike in giving to United Way occurred following the Easter Sunday tornado, for which the organization established a relief fund that also raised more than $500,000, much of which came from corporate giving.
Where there have been clear areas of help required, there have been generous responses from our community, Van Gorp says, noting the uncharacteristically high number of dollars raised for those two funds.
This is an unusual time of year for United Way to see spikes in giving. The organization's campaign typically runs July through December, when funds are raised to be distributed the following year to organizations that address systemic issues like childhood literacy and hunger. Naturally, the fund is at its lowest in the months just before the campaign begins.
"How, then, do we move back into this understanding that the work at least on our [United Way's] part, the work we focus on doesn't just stop with the response?" Van Gorp says. "We're actively in the process of trying to figure that out."
While emergency response funds do a good job of meeting immediate needs like food or rent, they don't do anything to fix the societal inequalities the pandemic has exposed and accentuated. The fact that the virus has had a greater impact on Latino and Black communities is partly due to inequities that existed before the pandemic, such as lack of access to Wi-Fi and other digital resources, which have become bigger issues as they are now essential to kids' ability to learn while not in school.
Gammon believes there could be some growing pains as the focus expands to address those larger societal issues. "I think overall, if we focus on those issues it makes us stronger as a community, but I think then it further depletes the resources that people need to exist," she says.
"I think a question that's going to be really interesting is, what does this look like in the months and days ahead as we see some of the impacts of the pandemic to date really take more effect. But should there be, heaven forbid, a resurgence this fall and winter, what will that spell out for how we take care of our community?"
— Stephen Van Gorp, United Way
In times of crisis, philanthropy often fills in gaps left by the government and business sectors of society. Chattanooga in particular is known for its public-private partnerships, known as the "Chattanooga Way."
"We have some partners in Nashville, Knoxville and Memphis, and while there are coordinated efforts [between the public and private sectors] to some extent in other communities, I don't know that it's as valued or deep a part of their identity as a community," Gammon says. "I think that's reflective of this community, a shared desire to lift people up."
For example, the Boys & Girls Clubs of Chattanooga stepped in to help Hamilton County Schools deliver meals to kids in areas where the club has a presence, such as East Lake, when it was discovered that many families had trouble getting to bus stops to pick up the meals. After conducting a survey that revealed most families the clubs serve did not have access to masks or hand sanitizer, the organization also delivered masks donated by the city of Chattanooga and hand sanitizer to families along with their meals.
"In times of crisis, our community responds with acts of compassion and a helping hand. We're seeing that in the way our donors have shifted their giving priorities toward frontline organizations providing vital services and immediate support to our most vulnerable neighbors," says Community Foundation President Maeghan Jones.
"For many families across our region, these are exceptionally tough and trying times. As our nonprofits work to meet that need, our community's incredible capacity for generosity will be more important than ever before. Some giving techniques we've recommended our donors consider include partnering with other donors to go further faster and accelerating the timing and amount of their annual gifts to nonprofits to meet the urgency of the moment."