This past week we have witnessed some promising signs that the social isolation policies are beginning to “flatten the curve.” While the new coronavirus cases and recorded deaths are continuing to rise statewide, the data shows we have seen some leveling off in Detroit, at least temporarily and projections are that Michigan may be nearing the top of the upward slope if not the peak of the pandemic. Of course, with these signs of optimism, we are also seeing continuing negative impacts. 

COVID-19 and the social isolation policies are particularly hard-hitting for our senior population. Schools are struggling to shift to virtual learning environments. And the pressure to ease social isolation and essential business restrictions is mounting as federal and state officials work to develop their guidance on how we will restart our economy.

In the struggle to address the immediate and overwhelming needs, we can often miss our opportunity to observe (not just see), what is happening more deeply in a crisis and plan for the needs ahead. In their blog, the Art of Observation: The Two Types of Observation the folks at Farnam Street point out the contrast between things that appear to us (what we see) that we immediately process, and the deeper understanding and meaning we can consider when we observe. They point to the need to grow our experience as observers based on our experiences and knowledge: “When we are a novice at something, all observations are unexpected and worthy of our attention but as we learn more about a field we become more discerning about that which we consider important and noteworthy.” 

It is probably safe to say that few, if any of us, have lived through the experience of a worldwide pandemic and economic downturn quite like this. However, philanthropy and in particular Michigan philanthropy, does have experience in dealing with major health crises and major economic downturns. 

In the 1980s AIDS was largely a death sentence especially for marginalized populations. Late in the decade, Michigan philanthropy developed an unprecedented state response to the AIDS crisis. CMF joined the then Michigan Department of Public Health and Charles Stewart Mott Foundation to form an unprecedented funder collaborative — the Michigan AIDS Fund. The Mott Foundation was initially joined by major grants from the W.K. Kellogg Foundation, Metro Health Foundation and loaned staff from The Kresge Foundation. Over the 20 year lifespan of the fund, more than 40 foundations and corporate giving programs and individuals committed more than $12 million to support efforts to stop the spread of HIV and AIDS.

At the beginning of the Great Recession, Michigan and Detroit specifically, were feeling the financial hardships of a downward economy. Labor markets were suffering, economic development in the city was slow and many residents could not access the labor market. There was also a clear recognition that Michigan’s overall success could be tightly linked to the success of its single largest major metropolitan region. In 2006 and 2007, 13 Michigan foundations pooled resources to develop a strategy for the Detroit region to think differently about its economic prosperity. The New Economy Initiative (NEI) was born and its current mission to grow an inclusive culture of entrepreneurship in Southeast Michigan works to benefit residents and strengthen the region’s economy. Since 2007, NEI has garnered $159 million from philanthropy to support strategic grantmaking, promote multi-sector convening and advance the expansion and understanding of an entrepreneurial ecosystem. That work has helped develop one of the most robust entrepreneur corridors and a network of more than 225 resources.

In these two examples we are able to “see” our community of philanthropy stepping up to a crisis, working to stand up coalitions, pooling resources and enabling strategic grantmaking. But a deeper look could help us all understand how we might be better observers of the COVID-19 crisis. With that lens, here are some “observations” I take away from these efforts.

• Clearly the AIDS crisis and the coronavirus are dramatically different diseases but they do share a disproportionate negative impact on marginalized populations. In the case of AIDS, there is no cure and a vaccine for COVID-19 remains elusive. It was not easy to get the general public to truly understand the AIDS epidemic. Initially those infected were stigmatized while epidemiologists strived not only to find a cure but get the public to clearly understand the seriousness of the disease as well as the ways to stop its transmission. Standing at the center of an issue of equity, it was clear that philanthropy could and perhaps should play a role in helping to find a cure, treat those infected with compassion and dignity and work to stop the discrimination and marginalization that those infected or potentially infected might face. 

• Prior to the Detroit bankruptcy Michigan philanthropy was actively engaged in working to develop a new economic way forward for the region’s economy. There was a clear understanding in our philanthropic community — we saw — that our economy had to move from an over-dependence on one way of economic prosperity (auto manufacturing) to a diverse and inclusive framework that provided opportunities for all. Leaders in our community observed that previous economic recoveries were increasingly unable to support the middle class as Michiganders had come to expect and large single industry employment would not be the only solution. NEI — eventually determining an entrepreneurial ecosystem —developed new strategies for economic mobility and sustainability that are more individually grounded and universally accessible.

As we look to the coronavirus and its spread in Michigan, CMF members have supported more than 30 COVID-19 pooled relief and response funds, provided matching grants to employee contributions to frontline nonprofits and direct grants to community-based nonprofits distributing food, fast-tracking grants to advance access to mental health services and extending technology or virtual learning. In just six weeks our community of philanthropy “saw” the need for immediate flexibility, the focusing of resources and the ability to deploy resources rapidly where they are needed most. This has created new and stronger partnerships among CMF members, nonprofit grantees, local United Way organizations, small businesses, and government at all levels.

Now we need to ask ourselves what we observe in the wake of a dual issued crisis (pandemic and dramatic economic downturn) beyond our immediate response. It will be difficult to suspend the high volume of demands for help in supporting our seniors, educating our children, fortifying our public health and emergency health care systems and working to partner with the business community that is reeling from a stalled economy. But now is the time to think ahead. This will be like no other recovery in recent history so while we can look back for lessons and insights, there will be no road map that will definitively outline what is next. So now is the time to observe and ready ourselves for what may be next — what will be the consequences, what are our data points and how will we prepare for life after this crisis? Here are some questions we will be exploring at CMF: 

• Fiscal Health —There have been some studies on the nonprofit sector broadly but no clear industry index as we see in other “industries.” If we had one, we probably would want to ask ourselves: "what do we know about the fiscal health of our own nonprofit partners before the crisis hit, now in the midst of our response and later as we reopen our economy?" 

• Business Model — For nearly a decade our sector has promoted a number of best practices to help nonprofits expand their support base including earned revenue, events and individual fundraising efforts including planned giving and targeting the wealth transfer. Even storied and successful membership organizations like ours are struggling to effectively engage our members during this crisis as spring is our prime convening season outside of our fall annual conference. There are fundamental challenges to the nonprofit business model. These require a certain level of engagement, intimacy and commerce-related activities that the coronavirus has disrupted. Do we reinvent the nonprofit business model to conform to a society that will be experiencing intermittent social isolation policies or do we need an interim way of doing business that straddles this crisis and our “new normal?”

• The Social Compact — Our experiences in previous recessions and national disasters have provided some lessons for us to reflect upon going forward. September 11, 2001; Hurricanes Andrew, Katrina and Sandy; the SARS and Ebola epidemics; the Great Depression and Great Recession all provide models for us. None of these alone however are going to be sufficient to help us fully mark our next six to 24-month journey of the COVID-19 crisis. Nonprofits will be challenged to meet overwhelming needs with already limited resources. Foundations will be challenged to continue strategic grantmaking and a long-term focus on outcomes while surging support for emergency response. The already fraying of the social compact (innovation in the social sector that is scaled by the public sector and free markets) will be stretched even further. The COVID -19 crisis is showing both the agility and limitations of the nonprofit sector to address issues alone. The public sector’s infusion or intent of capital to nonprofits as small businesses demonstrates what is possible, even while the Payroll Protection Program loans have not been readily clear or accessible to charities. In this new reality, what will be our opportunity to both explore and renew the social compact?

• Rebuilding and Rebalancing for Sustainability — The impact of the coronavirus crisis is going to negatively impact nonprofits, foundations and donors. Foundations are going to realign their grantmaking priorities, double down on their payouts and change their expectations on endowment growth. Small family foundations are watching the market as they try to find new ways to support their nonprofit partners. Spend down foundations have to recalibrate their strategies and expectations, almost in real-time. Community foundations have to sort out new pressures as a whole area of need and potentially new types of partners — small for-profit businesses — come knocking on their doors looking for support. All the while enormous pressure will be placed on investment committees and advisors as they work to look above the current market volatility and determine how to preserve and grow assets as pressures on grantmaking only increases.

Nonprofits are resetting budget revenue expectations, changing their programming designs and prioritizing how they provide the services their constituents need. Whether it’s a food pantry that’s working to meet the increased demand while food supply chains are disrupted, a senior center working to protect the health of both their residents and employees while keeping away loved ones to reduce the spread of the virus or an arts organization trying to survive the stall of patron engagement, all are dealing with a new harsh reality — wondering if their organization endure. Foundations and nonprofits alike are going to be asking key questions of how we rebalance, what do we rebuild and how do we as mission-driven organizations find new ways toward sustainability — not just of our organizations but of our very sector and the outcomes we seek to achieve?

In our community of philanthropy, none of us have the answers to these questions today, nor should we. There is not enough data nor certainty to the conditions on the ground to provide any confidence that our answers might be right. What we can do now is see what is happening, listen to grantees and communities when it comes to challenges and the context and address the immediate needs effectively and collaboratively. At the same time, we need to ask ourselves hard questions regarding the future and observe – look for data, reflect on our past and current experiences for lessons and demonstrate perpetual curiosity of possible new best practices – so that we are ready to forge a new way forward to grow the impact of Michigan philanthropy as we evolve to a new reality after this crisis abates. All of us at CMF look forward to supporting and guiding you and your organization on this difficult journey and appreciate not only all you are doing to help all Michiganders during this crisis but your support in CMF as well. Thank you.

All the best,
Kyle