Philanthropy Massachusetts' Funder Behavior and Outlook Survey 2020
In March our world was turned upside down due to the COVID-19 pandemic. The year continues to be an extremely challenging one for many people and communities. Coupled with the pandemic, we are undergoing a reckoning around structural racism and inequality. Many funders have evolved in their thinking and changed their practices, policies and behavior in light of these dual crises.
In September 2020 Philanthropy Massachusetts conducted a survey to learn of the changes, or anticipated changes, to funder practice. We captured data that indicated funder behavior since these crises began. We also asked questions regarding funder outlook for the coming year.
In sharing these results, we are: 1) providing funders the opportunity to see and learn what peers are doing, or are planning to do within their practice and 2) complementing data collected from the nonprofit sector as to how things have changed and continue to change for nonprofit and community-based organizations. Understanding the impact of both crises on our funder and nonprofit communities will help us improve our work as individual organizations and be better prepared to work together effectively.
In the survey we asked funders to: 1) reflect on their work from March through August 2020 and 2) share their outlook for 2021. This survey captured a moment in time. We opened our survey September 9 and closed it September 30.
Targeting Leadership and Senior Program Staff at funding organizations, we sent the survey to 338 individuals; 78 responded with 51 unique funders fully completing the survey. Additional demographics include:
- One third of Philanthropy MA’s 113 Funder Members completed it
- Nearly 20% of the respondents represented regional and statewide funders; 43% were from the Greater Boston area
- Family Foundations comprised 37% of respondents, followed by community foundations; other private and corporate foundations were the bulk of the remaining respondents
- Nearly half of the respondents noted that less than 10% of their Board identify as people of color; 28% of the respondents noted that 10-25% of their Board identify as people of color; 20% noted that 26-50% of their Board members identify as people of color; no Funder indicated more than 50%
- On the Staff side the numbers were roughly the same as noted above with regard to the Board, validating other research/data that notes the lack of racial and ethnic diversity within the philanthropic field
- The majority (67%) of respondents’ 2020 grantmaking budgets was in the $1-$10M range
Here are a few other important notes:
- Responses are confidential
- All numeric rating responses to this survey are reported in aggregate
- If any quotes are shared we have masked all identifying information to protect anonymity
- 61% of respondents have increased their general operating support dollars since the pandemic and the renewed spotlight on inequality; more than half increased those dollars by more than 11% this year
- 56% of respondents have increased their payout rate or are planning to beyond the required minimum 5% distribution since the start of the pandemic
- 90% of respondents reported that they either have or are planning to add/enhance a focus on racial equity in their grantmaking
- 88% of respondents reported that they are having or plan to have conversations with their board and/or staff about racial equity, including the composition of their board and/or staff
Other comments included: 1) accelerated grant payments on existing grants and 2) expedited multi-year grant checks.
Relationships with Nonprofits
Here are the top Three Emergent Needs that Funders are Hearing from Grantees:
- Providing emergency services (67%)
- Scenario Planning (56%)
- Investing in tech infrastructure (55%)
In addition to grants, we know that funders provide other types of support to nonprofit partners. The top two types of support offered by funders since the pandemic were: 1) Referrals (helping nonprofits to connect with other funders [(more than half = 28)] and 2) Learning Opportunities [(convenings, skills-building experiences (38%)]
Other comments included establishing racial equity funds and making connections among nonprofits to promote the exchange of ideas and expertise.
Nearly one third of the 55 respondents indicated that they do not provide support beyond the grant check.
Communication, particularly during a crisis, is critical. It’s encouraging that 57% of respondents state they are communicating more with their grantees since the onset of COVID.
With regard to openness with grantees, 67% of the funders surveyed report that there has been no change in their candor while approximately 31% state they’ve been more candid with their grantees; 52% state that their grantees have been more candid with them while 45% said there has been no change in candor.
“Everything is on the table now, but change will be slow.” – one respondent’s comment
- 84% of respondents predict an increase in grantmaking dollars over the next 12 months
- 57% of respondents anticipate an increase in additional support due to COVID-19 over the next 12 months
When asked which practices funders anticipate remaining in place beyond 2021, individuals responded in the following ways:
- 81% - Relationships with nonprofits
- 64% - Grantmaking changes
- 60% - Internal operations and policies
- 49% - External funder practices
Responding to the final survey question related to the future of the nonprofit and philanthropic sectors and our shared ability to come together and have positive impact funders responded with an average rating of a 3.5 on a 5-point scale from least to most hopeful.
The COVID-19 pandemic has opened many of our eyes to glaring disparities within our society. Many would argue that a return to ‘normal’ is insufficient. Over the past nine months, nonprofits, and the individuals and families whose lives they impact, have been devastatingly affected by these crises and have had to adapt quickly. Now that we as a funder community have seen the impact of these crises, and have responded quickly, it’s impossible to no longer see it.
We have experienced how quickly our institutions can adapt in dire circumstances. Funders can continue to:
- Reduce the burden on nonprofits by easing restrictions, extending grant deadlines, and shortening grant applications
- Increase payout rates and provide more unrestricted support in a time of critical need
- Provide additional assistance beyond the grant award itself
- Engage in conversations pertaining to racial equity, including the composition of their Boards/Staff
At Philanthropy Massachusetts, we will continue to elevate the funder behavior and practices that help increase the overall effectiveness and positive impact of the sector.
Center for Effective Philanthropy (November 2020) Foundations Respond to Crisis
Candid (July 2020) https://blog.candid.org/post/the-impact-of-covid-19-on-civil-society/
Exponent and PEAK co-authored survey (April 2020) https://www.peakgrantmaking.org/resource/covid-19-how-have-funders-changed-their-approach-what-will-stick/
Have questions or want to learn more? Please contact Alex McCray, Sr. Director of Programs at email@example.com