Philanthropy at the time of COVID-19

Philanthropy at the time of COVID-19

In the face of a pandemic, business, philanthropists and public institutions are joining forces. And although philanthropy cannot replace the government’s efforts to fight a pandemic, it can quickly, flexibly and sensibly support those who need help. There are many positive examples of such actions.

When the World Health Organization (WHO) declared COVID-19 a pandemic, the global philanthropic response increased exponentially. According to Candid (formerly the Foundation Center and GuideStar) – a leading source of financial information about philanthropy from around the world – philanthropic funds to combat coronavirus and its consequences have almost tripled in just three weeks in March, reaching nearly $ 3 billion in commitments and donations [1]. This is three times more than what was declared and donated to eight hurricanes, earthquakes and fires, including fires in Australia, since September 2017 [2]. US philanthropists remain the world’s largest donors. The fight against coronavirus continues on many fronts.

The fight against COVID-19

Huge support is provided for the ongoing fight against COVID-19. Special funds are created through existing foundations, such as The New York Community Trust or the Seattle Foundation. These entities are trustworthy, have many years of experience and knowledge of how to act in a crisis. They know what nonprofit organizations are worth supporting to achieve the highest impact. The funds manage, administer and transfer the funds obtained from various sources, offering grants or interest-free loans. The New York Community Trust has over $ 75 million at its disposal, including donations from Michael Bloomberg, former mayor and former democratic presidential candidate.

Impressive collaboration of the biggest

Philanthropists, businesses and public institutions join forces to find a cure for coronavirus. The impressive fund was created by the World Health Organization, United Nations Foundation and the Swiss Philanthropy Foundation – COVID-19 Solidarity Response Fund – which aims to track and understand the spread of the virus and accelerate efforts to develop vaccines, tests and therapies. The COVID-19 Therapeutics Accelerator, another great initiative, aims to find a cure for coronavirus and provide access to therapy. The accelerator was created by the Bill and Melinda Gates Foundation, Wellcome and Mastercard, which together contributed $ 125 million to the fund. Recently, The Chan Zuckerberg Initiative, founded by Mark Zuckerberg and his wife Priscilla Chan, joined this group with a contribution of $ 25 million.

The bridge function of philanthropy

Individual and corporate philanthropists responded very quickly where the governments need time. When the University of Washington unit was designated as a testing center, it ran out of money in the early stages. Connie Ballmer, co-founder of the Ballmer Group and privately the wife of Steven A. Ballmer, former CEO of Microsoft, filled this financial gap by donating an eight-digit donation to the test center. “This is a bridging function until the public money reaches the center,” Ballmer said.

In Poland, Leszek Gierszewski, the founder and president of Drutex, took similar actions to support hospitals. He initiated the action called We are together. We help. It brought together enterprises, individuals and institutions, including 4F, Dr Irena Eris, LPP and LOT. They joined forces to verify the current needs of hospitals and respond to them – looking for missing equipment, masks, protective suits, antiseptics and devices, and transporting them to Poland. “We can do larger projects together,” said Gierszewski in a special interview for Forbes.

A practical exam for business who call themselves responsible

As the pandemic continues, philanthropy, especially corporate philanthropy, is shifting. More and more support is being transferred to the nearest business environment, mainly to co-workers and the supply chain, so that these people and entities survive COVID-19 and are ready to act as soon as the normal business operations return.

The concern for its employees, subcontractors and the struggle to maintain the supply chain was expressed, among others, by Danone, which decided to allocate EUR 250 million to support 15,000 small businesses working in their ecosystem, including farmers, suppliers and service providers. “We’re in this together,” said Emmanuel Faber, president of Danone, announcing the rescue package.

Unilever will also launch a global support program for its business partners worth 500 million euros. It will cover the implementation of early payments to small and medium-sized suppliers who are most vulnerable to the negative effects of a pandemic. It will also expand the credit line for selected small retail clients whose business is based on the distribution of Unilever products – all to help them manage and protect jobs. “Our stable financial situation allows us, or actually obliges us to share with others at this difficult time,” said Unilever CEO, Alan Jope.

In Central and Eastern Europe, the supply chains can be strategically supported by the Recovery Fund, created by the Social Impact Alliance for Central & Eastern Europe in response to COVID-19. The Fund’s task is not only to support targeted donations, but also to manage donations in a way to achieve the greatest impact, which will be measured by the number of saved jobs and enterprises.

Greater tax incentives

The stimulus package for the US economy includes an increase of deduction limits for charity. In the US, the NGO system works differently than in the CEE. To simplify matters, in 2020, it will amount to 100 percent of cash donations [3]. Figuratively speaking, by donating $ 1 million to charity, it will be possible to deduct $ 1 million from revenues in 2020. Any excess will be deductible in the following year.

The Polish government also introduced additional incentives for philanthropists at the time of COVID-19, increasing the possibility of tax deductions up to 200 percent of the donated amount. However, they limited them solely to donations to entities performing medical activity (a short list of app. 100 hospitals) and two government institutions. Depending on the month of making the donation, the level of possible deductions changes. Good direction, noble goal but in my opinion, unnecessarily complicated.

What about NGOs?

In the current situation, when the majority of donations is transferred to actions or organizations related to the fight against COVID-19 and its consequences, the lack of financing and fear for the future is felt by the non-profit environment. Most of them have no reserves or savings to operate in uncertainty, without revenues. Thus, the beneficiaries of their activities are at risk – children, the elderly, animals. At this difficult time, let’s take an interest in such social areas as child nutrition, education or mental health.

In the US, donors have modify their philanthropic activities. First of all, if they have financial resources, they share them now, while ensuring that they work effectively (bring the biggest impact). Without changing their long-term goals, they develop new activities with their social partners, ensure grants for their operational activities and make unrestricted grants.

The role and attitude of individual and corporate philanthropists is irreplaceable today. Share wisely. So that we survive this storm together.





Anna Korzeniewska, Founder of Social Impact Alliance for Central & Eastern Europe
Original text was written for Forbes Poland, published on on Apr 8, 2020.