The onset of the COVID-19 pandemic and national reckoning for racial justice in 2020 resulted in philanthropic and nonprofit leaders to reimagine their roles and ways of working, and explore what it means to center diversity, equity and inclusion.

The Center for Effective Philanthropy (CEP) has documented the ways in which foundations responded in 2020 through a series of three reports highlighting how foundation leaders reexamined their work, focused on racial equity and became more flexible and responsive. 

CEP’s second phase of this research, Foundations Respond to Crisis: Lasting Change?, is a cross-sectional study that explores what foundations ultimately did in 2020, what they carried forward into 2021 and what they plan to sustain after the pandemic is contained.

In April and May 2021, CEP surveyed over 900 foundation leaders and received responses from 284 foundation leaders. In April through June 2021, CEP staff conducted 33 in-depth interviews with foundation leaders and staff and 32 in-depth interviews with nonprofit leaders who are part of CEP’s Grantee Voice Panel.

The report highlights three key findings from the data gathered and whether foundations plan to sustain these changes:

1.    Almost all foundation leaders said their foundations are working differently now than in early 2020.

2.    Most foundation leaders reported making changes to their work that enable them to better address systemic inequities and advance racial equity.

3.    Foundations with more racially diverse boards—boards whose members are at least 25% people of color—were more likely to adopt practices to support nonprofit partners and the people and communities they serve.

According to the report, most interviewed nonprofit leaders said they experienced greater flexibility and responsiveness from their funders, especially more flexible processes and more unrestricted support. They also experienced deeper relations and greater trust and openness with their foundation funders. 

“The pandemic allowed us to rapidly pivot, eliminate historical administrative hurdles and is informing how we will sustain these principles of flexibility and responsiveness going forward,” a foundation CEO said.

Data at a Glance:

•    55% of foundation leaders said their foundation worked somewhat differently with their nonprofit partners and 42% reported working very differently with nonprofit partners.

•    41% of respondents said they sustained most changes to their work with their nonprofit partners into 2021 and 21% said they sustained all changes.

•    67% of foundation leaders surveyed reported that their foundation increased its grantmaking budget in comparison to the last fiscal year. 

•    76% of foundation leaders made changes to application processes and/or reporting requirements to reduce the burden on nonprofit partners.

•    61% of respondents reported that their foundation is providing a higher percentage of unrestricted grant dollars compared to pre-pandemic giving levels. Of those, 65% said they will continue to provide unrestricted grant dollars after the pandemic.

•    80% of foundation leaders said they have been doing more to incorporate racial equity into their internal practices.

o    Over half of foundation leaders described offering formal trainings for staff and board, holding informal meetings and providing support focused on racial equity, conducting organization-wide diversity, equity and inclusion audits and/or focusing on a more inclusive, equitable and supportive organizational culture.

o    One third of interviewed leaders offered trainings about implicit bias, racial equity and anti-racism.

•    59% of foundations are changing aspects of their grant application process to reach more nonprofits serving communities most affected by systemic inequities. 67% are changing aspects of their nonprofit partner selection process.

o    83% of foundations reported they will sustain the changes made to the grant application process and 85% will sustain changes to the nonprofit partner selection process.

•    23% of foundation leaders reported that all grant dollars or a large percentage (50-100%) are going to organizations that serve Black or African American communities and 29% reported that a moderate percentage of grant dollars (25-49%) are going to these organizations. Of those respondents, 45% expect grant dollars to increase to these organizations and 36% will stay the same. 

•   20% of foundation leaders reported that all grant dollars or a large percentage are going to organizations that serve Hispanic and/or Latinx communities and 29% reported that a moderate percentage of grant dollars are going to these organizations. Of those, 35% said grant dollars will increase and 43% will stay the same.

•    7% of foundation leaders reported that a moderate percentage of grant dollars are going to organizations that serve Asian or Asian American communities and 53% reported that a small percentage (1-24%) are going to these organizations.

o    18% said grant dollars will increase and 53% will stay the same.

Most respondents attributed the changes in their work to a shift in mindset. Most respondents noted broad shifts in how they think about their work in understanding the role of race and racism relative to the problems that they seek to address and the importance of listening to and supporting their nonprofit partners with greater flexibility and responsiveness.

According to the report, the more racially diverse boards more frequently reported sustaining all the changes they made in 2020 into 2021. 

Foundations led by people of color more frequently indicated that they had sustained all of the changes they made in 2020 into 2021. Leaders of color reported that they are now directing more dollars to organizations serving Black and lower-income communities.

In conclusion, CEP shared that this data points to a level of change in foundation practice that they have never seen before. Changes have lasted beyond what they initially documented in 2020 and foundation leaders plan to sustain many of these changes.

Want more?

The full Foundations Respond to Crisis: Lasting Change? report is now available in CMF’s Knowledge Center. View report.