Ford Foundation President Darren Walker attends a reception at the Charles H. Wright Museum in Detroit Steve Perez/Detroit News via AP
Five highly influential American charitable foundations announced today that they would increase their payouts to nonprofit organisations by more than $1.7bn over the next two years to counter the devastating economic effects of the coronavirus pandemic.
These storied donors—the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Doris Duke Charitable Foundation, the W.K. Kellogg Foundation and the Andrew W. Mellon Foundation—said that the commitment represents new funding beyond the budgets previously approved by each of their boards. Each foundation will set priorities for the distribution of these additional funds based on its own grant-making guidelines: the foundations support causes including social justice, higher education, the arts and culture and environmental solutions.
The Ford has committed up to $1bn; the Kellogg, $300m; the Mellon, $200m; the MacArthur, $125m; and the Doris Duke, $100m.
In a radical departure from the fiscal restraint that is customary for foundations during periods of economic strain, three of the five—the Ford, the Doris Duke and the MacArthur—have decided to borrow money to cover the increase in what they distribute, issuing long-term bonds, leaders of the foundations said in a video call with news organisations this morning. The Mellon and the Kellogg foundations are still deliberating their funding strategies, although their boards have already approved the extra payouts.
The Ford Foundation, for example, which is borrowing $1bn, will be issuing AAA-rated social bonds that will be marketed by all the major financial firms, said Darren Walker, the foundations president. (Such debt instruments are used to finance projects that result in a positive social outcome.) He emphasised that grant-making would not be reduced to service debt.
“Covid-19 presents an existential threat to nonprofits, and we must respond in creative and innovative ways,” Walker said in a joint statement issued by the foundations. “The pandemic has brought into sharp relief the results of decades of growing inequality. The virus is only compounding that inequality, taking a disproportionate toll on the poor, people of colour, immigrants, people with disabilities, and others who were already marginalised before the crisis hit.”
“Our goal for the additional funds is to help shore up, strengthen and deepen the resilience of key organisations that are advancing the fight against inequality and injustice at a time when the need is greatest,” he said.
The foundations noted that nonprofits in the US employ more than 10% of the nations private work force of around 12.3 million people. Yet a Nonprofit Finance Fund survey from 2018 indicates that nearly 75% of nonprofits lack six months of cash reserves, they added.
Currently nonprofits are reeling from the impact of cancelled artistic seasons, postponed revenue-generating events, reduced corporate sponsorship and budget shortfalls for contributing state and city governments, the foundations noted. In a recent CAF America survey, they pointed out, 73% of nonprofits said they had already witnessed a decline in contributions and expected their revenuRead More – Source
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