Opinion | Congress needs to include a bailout of nonprofits in the next coronavirus aid bill or millions of Americans could lose a critical lifeline. By kpalm313.
will have to shut their doors because of the recession. There are ways to keep that number on the low end, but it will involve the foundations and corporations that fund nonprofits to drastically overhaul their practices.
I've worked for nonprofits for most of the last 20 years--as a writer in public schools, as a fundraiser and as a communications director — so I've seen up close how inefficiently they are funded. The crisis has only exacerbated this problem. The parts of my job that feel most critical — drafting policy papers, editing op-eds, distributing information on relief programs—are even more subsumed than usual by the parts that feel less so — planning fundraisers, for example, or answering tedious questions in online grant application portals. With the onset of the pandemic, many funders and donors have offered flexibility with committed funds or even provided additional support. But longer-term changes are also necessary. For foundations, the most critical thing they can do is increase their payouts. The Ford Foundation and four other major charitable funds announced in March they would borrow money to. This is good news, but ignores the most obvious solution—spend more from their endowments. "[T]here are hundreds of billions of dollars in endowments just sitting there because philanthropy has been continuously saving for a rainy day, with most foundations giving out only five percent of their assets each year," writes Vu Le, a former nonprofit executive director and author of the popular blogSome philanthropic leaders are already on board, proposing "in the next coronavirus relief package, though it remains unclear whether it will be included. The legislation would mandate that foundations and donor advised funds pay out 10% of their assets over the next three years. Foundations and corporations also need to let nonprofits use their money where it's needed. The typical nonprofit spends countless hours creating new programs or reconfiguring existing ones to match funders' ever-changing priorities and criteria, then filling out lengthy proposals for grants they may or may not receive. Those grants usually only cover one year, with no guarantee of renewal. Indeed, one of the most common questions funders ask is "How will you sustain this program after your grant funding ends?" as if it would be simple to turn a food bank or crisis hotline into a revenue-generator. When the crisis started, many funders let their grantees transition program grants to general operating support. If nonprofits need flexibility on how they spend their money during a crisis, they will also need it after. General operating grants — across multiple years — should become the norm. And then there are fundraising events, whose sponsorships provide an important source of corporate dollars but whose planning diverts time from the work that actually helps people. With COVID prohibiting most in-person gatherings, nonprofits are scrambling to figure out "creative alternatives." I personally have had the whiplash-inducing experience of researching eviction relief programs one minute and weighing whether our virtual fundraiser should take place on Facebook Live or Zoom the next. And the same reverse-"Field of Dreams" question I ponder every year resounded even louder in my head: "What if there were no event and the companies who say they believe in our work just gave us money to do it? It is problematic, to say the least, that our country's social safety net is so reliant on a system beholden to philanthropists, corporations and the countless individuals we must ask, over and over, to open their checkbooks. Our government needs to do far more to support its vulnerable residents, which is quickly becoming the majority of us. But nonprofits will always be essential. These changes can help sustain them.Something is loading.Do you have a personal experience with the coronavirus you'd like to share? Or a tip on how your town or community is handling the pandemic? Please emailfrom Business Insider Intelligence on how COVID-19 is affecting industries.
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