March 23, 2020

Monday, March 23, 2020
We're sharing the latest updates, best practices and learning opportunities emerging from Michigan philanthropy.

COVID-19: 5 Things Funders Can Do to Support Grant Partners

We are highlighting a sample of approaches and best practices that are emerging from our members around the state to provide insights on how foundations are supporting their nonprofit partners during this unprecedented crisis.

Here are five things funders can do to be a resource to nonprofits and other grant partners in COVID-19 response and relief efforts.

  1. 1. Communicate with Grantees: Staying in contact is key during this time. Recognizing that grant partners have evolving needs during such a dynamic situation, you can ask to learn more about their specific challenges and how you can be helpful. You can also reach out to grantees to let them know of any flexibility you may be adding to your grant application or review process (more on that below), and assure them your foundation is there to support them through this time of uncertainty.

See it in action:

Also, in reaching out to grant partners, you can provide notice of any changes you may be making to existing grant programs, such shifts in grantmaking priorities, staffing, operations or application deadlines.

2. Be Flexible in Grantmaking: Grantees may only have a few months’ worth of cash on-hand, and many nonprofits have cancelled major fundraising events and lost other earned revenue sources. This is an opportunity to show flexibility in grantmaking that can directly impact an organization’s ability to operate during this time. If you don’t already allow unrestricted funding, you can consider changing that policy and also consider changing previously awarded grants to unrestricted grants.

See it in action:

  • In a message to its stakeholders, the Max M. and Marjorie S. Fisher Foundation expressed to its grantees: “We remain committed to working alongside you throughout this crisis. We know much of your work has been halted, quite unexpectedly, and this stoppage may have an effect on grant-funded outcomes. We share your disappointment about canceled programs, rescheduled events, office closures and more. We’ll work proactively to be flexible in structuring grant terms, expectations, and payments. Our team has been in contact with nearly all our grant partners, but please feel free to contact us directly if you have any questions.”

  • The Ford Foundation shares on its website, “We are acutely aware that this global crisis will manifest differently in different contexts, and therefore requires a lot of customization in our responses...We want to provide you with maximum flexibility in how you use our funds in this time of extraordinary challenge. We know that 'one size will not fit all' so our program officers plan to reach out to you individually to work on the best ways in which we can support you.”

  • The William Davidson Foundation shared in a message to its grantees that it will work with them to extend reporting deadlines and meetings, noting, “Foundation staff will work with each of you to amend grant benchmarks that cannot be met as a result of this crisis.”

Grantees may not have the capacity to fulfill all administrative components of a grant right now. You could explore pausing or modifying reporting requirements, site visits and other activities that add to their workload or take focus away their work in service of communities.

3. Collaborate with Other Funders: Many CMF members are creating or supporting community response and relief funds to address needs related to COVID-19, a tool for funders and other partners to collaborate in serving their communities. (Beyond those listed below, there are many more examples featured on CMF's COVID-19 Resource Central webpage.)

See it in action:

  • The Hudson-Webber Foundation is sharing resources on Facebook and asking for input from its partners. The foundation shared in part, “The philanthropic community in Detroit is actively in conversation together about how to best respond and support residents and communities and any actions we take should be well informed by you, our partners on the ground.”

  • The Consumers Energy Foundation is supporting two statewide organizations - The Food Bank Council of Michigan and the Michigan Association of United Ways - with a $500,000 contribution to help enhance critical services for Michigan children, vulnerable seniors and those who may need assistance in the wake of the COVID-19 pandemic. United Ways are leading or collaborating in many local response efforts across the state.

  • Community Foundation of St. Clair County has established the COVID-19 Thumbcoast Regional Response Fund to give added support to those organizations on the front lines of caring for and assisting vulnerable populations and those communities where the loss of jobs and benefits, or the closure of institutions and businesses are creating a significant new burden for community members and the social service organizations that provide a safety net for them.

  • The Community Foundation of Marquette County launched the COVID-19 Community Response Fund for Marquette County to provide flexible resources to organizations in our area working with communities who are disproportionately impacted by COVID-19 and the economic impact of this outbreak.

  • Blue Cross Blue Shield of Michigan is providing $500,000 to support the efforts of community organizations to provide meals to vulnerable kids and populations during the COVID-19 pandemic.

4. Collaborate with Government and Other Partners: The COVID-19 disruption to daily life is impacting how communities are meeting basic needs and providing essential services. Some members have connected with city officials, school district administrators and other leaders to develop local solutions. Including grantees and the people they serve in these conversations is critical to equitable response efforts and creating opportunity for those closest to the situation to outline their needs, ask questions and highlight areas of concern.

See it in action:

  • Community Foundation of Greater Flint announced The Greater Flint Urgent Relief Fund has been established by a coalition of philanthropic, government and business partners to quickly coordinate and deploy resources to nonprofit organizations in the greater Flint area that are working with communities disproportionately affected by the coronavirus outbreak.

  • The Grand Haven Area Community Foundation and the Community Foundation for the Holland-Zeeland Area are part of the Care Ottawa County alliance with the United Way of Ottawa County, Lakeshore Nonprofit Alliance and Community SPOKE. They are partnering on a COVID-19 web resource that connects the community to opportunities to donate goods, donate funds and volunteer.

5. Serve as a Resource: Grantee, community members and other partners are looking for curated resources to support their varied needs and inform their work. You can provide a centralized location to share free or low-cost resources for e-learning, food access and more.

See it in action:

We have these examples and more live on CMF’s COVID-19 Resource Central.





Office of Foundation Liaison Policy Spotlight: Michigan Food Distribution

After the state of Michigan closed K-12 schools and limited service industry operations to mitigate the spread of COVID-19, there have been significant shifts in the ways both schools and food banks are distributing food.

The Michigan Department of Education (MDE) acquired a federal waiver to operate school food distribution statewide under a provisional “unanticipated school closure” protocol. This allows MDE to use funds from the Summer Food Service Program to feed students in nontraditional ways. MDE has streamlined its summer feeding location registration to support the creation of new sites, with a simple form to get reimbursed. (School districts are being reimbursed at the maximum federal rate.)

On March 23 Governor Gretchen Whitmer issued a shelter in place executive order for all of Michigan. It's important to note that under the governor's executive order, K-12 school food services are considered critical infrastructure and will continue. 

School districts have the flexibility to individually determine the most effective food delivery system while minimizing social contact. For example, Ann Arbor Public Schools has 12 sites where families can pick up “to go” meals that contain a balanced breakfast and lunch for “children up to 18 years old and any child with special needs up to 26 years old.” Milan Area Schools delivered meals via bus routes and offered a drive-through service at one location.   

While school districts continue to finalize and announce their plans for distribution – if they choose to participate in the program – food banks, too, are seeing a high demand for services. The Food Bank Council shared with the Office of Foundation Liaison (OFL) that food banks in Michigan have doubled their average monthly output of food in just the last two weeks. Concern about the demand for food continues to grow as food banks begin to feel the impact of service sector shutdowns, senior center closures and auto industry layoffs. The OFL expects access to quality and healthy food will be a top priority in this crisis.    

Immediate Needs and Concerns

Communication and Information Sharing: 

  • Not all vulnerable communities are aware of food distribution locations and times, or even their availability. This includes individuals and families who may be accessing these services for the first time.

  • There are known misconceptions about the process. As an example, a state issued ID does not have be provided when picking up food; this concern has been shared as a barrier.

  • Feeding programs can be siloed; a coordinated communication system is needed.

  • Food Banks and MDE need shared data to monitor the provisional food system, identify gaps and coordinate responses.

Food Supply/Purchasing

  • Increased food demand, hoarding at grocery stores and little-to-no in-season farm products reduce normal streams of food donations.

  • Food suppliers across the country are working to meet high demand while challenged to simultaneously ensure workers and volunteers are safe and procedures are aligned with mitigation protocols. 

  • While federal relief is being discussed, food banks need immediate cash flow for food purchases. Food needs for laid off workers and other vulnerable populations are expected to hit the emergency food system nationwide, resulting in serious concerns about long-term supply.


  • Food distribution at vastly increased levels will require significant community help. Discussions are occurring regarding deploying multiple pools of potential volunteers and existing plans that food banks have with the National Guard. 

  • Food banks cannot accept volunteers without the ability to test and provide safety protocols that guarantee safety of volunteers, staff and recipients. 

Crisis Duration

  • We are experiencing unprecedented strains on an already strained system with no sense of the duration of this “new normal.” Vulnerable populations, those with limited access to transportation, rural areas and those who are unemployed and underemployed face more challenges ahead, and we are not currently sure how long these challenges will persist.

Recommendations for Philanthropy:

  • Stay informed and coordinate with your local/regional partners: Michigan philanthropists and nonprofits know their food banks and schools. In this early phase of the crisis, there is more happening on the local level that funders can immediately engage in as state and federal responses materialize. Advocate for coordination across siloes, establish collaborative tables to identify needs and responses and share your activities with CMF as we work more broadly to shape informed policy, identify roles for philanthropy and share effective responses with your funder colleagues.

  • Consider direct financial support: The Food Bank Council of Michigan shares, “The network of Feeding America Food Banks are on the front lines of COVID-19 and are distributing record amounts of emergency foods to all those affected by the pandemic. These food bankers and their teams are courageous, tireless and dedicated to meeting the need for as long as the crisis lasts.” The Consumers Energy Foundation, a CMF member, made a $250,000 donation to the Food Bank Council of Michigan. “With schools and businesses closed and many grocery store shelves left bare, local nonprofits are playing a critical role in helping those in need,” Brandon Hofmeister, Consumers Energy Foundation president, said in a news release.   

  • Be creative, be flexible and innovative: These unprecedented times call for philanthropy to leverage its intellectual capital, flexible funding and thinking, and networks to meet needs in new ways. In addition to needs specific to food distribution, these routes represent an infrastructure to reach Michiganders and could be used to make other goods and services available.

  • Maintain the long view: The crisis is magnifying many of the systemic deficiencies on which philanthropy has been focused for years. Michigan’s Asset Limited, Income Constrained, Employed (ALICE) population is falling into a safety net that is already filled with our most vulnerable populations. Loosened state and federal policies during an emergency such as COVID-19 represent what philanthropy and its partners advocated for prior to the crisis. Eligibility for services has increased, reimbursement rates for programs have increased, training and credentialing has been streamlined, etc. How can we emerge from this crisis in a strong position to actualize systemic and policy improvements?

The Office of Foundation Liaison is working closely with the governor’s office and stakeholders to monitor, coordinate and share information on needs and gaps in food distribution during this crisis. If you have information to share about challenges your foundation or community, or effective work you and colleagues are implementing, please message Stephen Arellano with the OFL. 






Expertise from the Field: Legal Considerations

Robin Ferriby, a CMF member and senior counsel at Clark Hill, PLC, explains the implications of payments made to individuals by employers and philanthropic organizations following the declaration of COVID-19 as a national emergency. Plus: Additional considerations shared by Jennifer Oertel, a CMF member, shareholder with Bodman PLC and CMF’s Impact Investing Expert in Residence.

The U.S. has been under a state of emergency since March 13 due to the COVID-19 pandemic. The declaration enacted by the president unlocks federal resources to combat the virus under the Robert T. Stafford Disaster Relief and Emergency Assistance Act.

As an organization, what does this mean to you as an employer and to other employers in your community?

The declaration triggers the provisions of Internal Revenue Code (“IRC”) Section 139. This code section provides that the gross income of employees shall not include any amount received as a “qualified disaster relief payment.” Qualified disaster relief payments include “any amount paid to or for the benefit of an individual”:

  • To reimburse or pay reasonable and necessary personal, family, living or funeral expenses incurred as a result of a qualified disaster.

  • To reimburse or pay reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation or replacement is attributable to a qualified disaster.

  • By a person engaged in the furnishing or sale of transportation as a common carrier by reason of the death or personal physical injuries incurred as a result of a qualified disaster, or

  • If such amount is paid by a federal, state, or local government, or agency or instrumentality thereof, in connection with a qualified disaster in order to promote the general welfare,

but only to the extent any expense compensated by such payment is not otherwise compensated for by insurance or otherwise.”  IRC §139(b)

For example, during this type of extreme need if employers should provide additional medical assistance not already covered, or child care through direct employee payments, then those would not be taxable to either the employee or employer provided that it meets the eligibility qualifications as outlined.

It’s important to note that qualified disaster payments which are exempt from income tax do not include wage replacement payments. In addition, qualified disaster relief payments are exempt from employment taxes. 

What does the emergency declaration mean for foundations and charities?

The last time an infectious disease resulted in a declaration of a national emergency was in 2014. Notice 2014-65 declared the Ebola outbreak as a national emergency. That 2014 notice references Publication 3833, Disaster Relief: Providing Assistance Through Charitable Organizations, for additional guidance on how charitable organizations, including employer related private foundations, public charities, private foundations and donor advised funds could make relief payments to individuals.  

Publication 3833 provides explanations and examples relating to:

  • The definition of a “charitable class” and how to ensure that the class of potential recipients will be indefinite enough to be charitable.

  • How to determine when recipients are “needy or distressed.”

  • What short-term and long-term benefits can be provided.

  • How employer-related programs can qualify as charitable.

  • Record-keeping and reporting requirements.

While Publication 3833 provides a helpful initial reference, please contact your legal and tax counsel for additional guidance. 

Continuing Considerations

Jennifer Oertel, a CMF member, shareholder with Bodman PLC and CMF’s Impact Investing Expert in Residence has drafted a memo for corporate clients on this issue. It is posted on CMF’s COVID-19 Resource Central page for informational purposes.

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