How to think about giving during COVID

At Founders Pledge, we empower entrepreneurs to do immense good. This has included advising on millions of dollars of grants responding to the COVID-19 crisis and pandemic preparedness so far, including through our COVID-19 Global Impact & Innovation Fund launched in partnership with Silicon Valley Bank.

With the global COVID pandemic transitioning from winter-to-spring-towards-summer, it’s left many donors wondering: “Is COVID the only thing I should give to this year?”

To address this question, there are three key points to consider:

1. COVID has received >$9b in philanthropic funding, so finding high-impact interventions which require more money is difficult.

Disasters often result in an outpouring of generosity disproportionate to need. An onslaught of donations usually means a disaster does not meet the test of “neglected-ness” which partially informs our giving recommendations. COVID-19 is different in the scale of the global health and economic crisis. The scope of this disaster has led our team to investigate which interventions have the strongest evidence of effectiveness and which most need additional funding.

Consider the case for funding ventilators. Respiratory system support is currently the third most funded philanthropic area in response to COVID. This is true despite conflicting evidence on the effectiveness of ventilators in the treatment of COVID, with nearly 90% of patients put on ventilators in New York’s largest health system ultimately dying from the virus, and concerns about the cost-effectiveness of ventilators which can cost up to $25,000 in high-income countries.

On the other hand, we expect some investments to be highly impactful and cost-effective. For example, we are recommending the funding of public health awareness campaigns in low- and middle-income countries where expensive medical interventions are simply not an option. By providing useful information about the disease through media campaigns and telephone hotlines, nonprofits can have an outsized impact. Though more than $9b has already been pledged to COVID, the unprecedented global scale of the crisis suggests there are still opportunities for philanthropic dollars to make a difference, if used thoughtfully to address neglected challenges.

2. Not all nonprofits are able to execute their work during COVID, and some will face greater need.

As we assess our portfolio of recommended charities during COVID, we’re considering three questions: Can the charity run their programs during the crisis? Can the charity pivot to respond to COVID? Does COVID change the need for the charity’s programs?

Action for Happiness, one of our mental health and subjective well-being recommended charities, is an example of an organization which is working to pivot their programs in response to COVID. They normally hold in-person groups to enable connection and create happiness, and they are helping facilitators move these online. With COVID exacerbating mental health issues, we expect this intervention to continue to positively impact wellbeing.

Bandhan, which we recommend for its impressive work targeting “the hard core poor” in India, has paused some of its programs. Their primary poverty alleviation programs require in-person interaction, and will become more important than ever when public gatherings resume. We are likely to continue recommending grants to Bandhan when they are able to resume their work.

Other nonprofits are likely to experience greater need as a result of COVID. For example, currently more than 117 million children are at risk of missing a measles vaccine as a result of social distancing, and we’ve seen US vaccination rates drop as well. As more funding for COVID response and recovery flows to high-income countries, the relative need in the lowest income countries for emergency aid will increase, which is why we are continuing to recommend GiveDirectly for cash transfers to the extreme poor.

3. Nonprofits will require unrestricted support to operate now and survive in the long-term.

Most nonprofits fundraise on an annual basis and depend on in-person meetings, events like galas, and campaigns to fundraise for their annual operating budgets. Some generate direct revenue, like museums which rent out spaces for private events or religious organizations that contract bus services. Much of this direct revenue and standard fundraising activity has been disrupted by stay-at-home orders.

Like startups which monitor runway, nonprofits monitor cash reserves as well as firm commitments from donors to give in the future. It’s estimated that half of all nonprofits have less than three months cash reserve, making the economic halt particularly challenging for them. Like the start-up community, many are making cuts to expenses, just when their services may be most needed.

Outside of the COVID response, you can support high-impact causes like those working on climate change, poverty alleviation, and global public health by donating now, committing to give this year and into the future, and making your gift unrestricted so that a nonprofit’s executives and board can direct your funds where they’re most needed. The good news is that philanthropists appear to be responding generously to this need. Research by Fidelity Charitable found that 79% of donors plan to maintain or increase their giving this year. More than 700 foundations have committed to give more this year than they ordinarily do, and to give through unrestricted gifts so that nonprofits have nimble funding to respond during the disaster.

We are regularly updating our COVID strategy and recommendations. You can read more here.