Indiana philanthropic organizations are weighing advantages of maintaining unrestricted funding models and alternative reporting processes post-pandemic

by Shari Finnell, editor/writer, Not-for-profit News

In addition to a paralyzing pandemic and social unrest, 2020 marked the year that philanthropic organizations in Indiana, and nationally and globally, abandoned the rulebook on how grants traditionally had been issued.

Many Indiana philanthropic organizations, weighed down by the enormity of the challenges facing communities, including job losses and food insecurity, decided to distribute funds to nonprofits without the need for detailed grant requests or reporting processes.

“They woke up and asked, ‘What can we do?” recalled Claudia Cummings, president and CEO of the Indiana Philanthropic Alliance, which represents 190 philanthropic organizations in the state. The leaders of “one foundation showed up at the office one morning and mailed out checks to every single grantee — whether or not they had requested funds.”

Other philanthropic organizations shared similar stories with the alliance, including distributing funds without restrictions — trusting that the grant recipients would use them to carry out their mission quickly and optimally in the midst of the global pandemic.

In that way, the COVID-19 pandemic may have accelerated the adoption of better practices across all industries worldwide, according to Cummings.

“Many things we would have thought to be impossible pre-COVID were adopted by a lot of institutions. It has opened up opportunities,” Cummings said.

“While writing out checks to those who never even asked might not be something that’s triggered all of the time or even ever again because it may not be a good practice, we have learned that dollars can go out rapidly and we understand the mechanisms that can make that happen.”

That demonstration of support didn’t come without challenges, Cummings said, noting that the markets went down in the wake of the pandemic outbreak.

“It was impacting the ability of philanthropy to even respond financially. It was a really rough first six months but what I saw on the ground was incredibly inspiring. Our members, even in light of what was happening with the markets, made the decisions to give more than they had ever given before

Pledge to transform philanthropy

The question on the minds of many interested in the future of philanthropy is whether these types of changes are temporary — or are they signaling a significant shift in how philanthropic organizations operate.

“Clearly, nothing in society globally is the same now as it was two years ago,” Cummings said. “No one has ever seen something this unprecedented. Now, we’re asking, ‘What happens next?’ There’s kind of a middle phase of trying to move as a response to recovery.”

The Council on Foundations is among the organizations that is advocating for change, encouraging philanthropists to pledge to reform the sector by adopting the following reforms, especially during the pandemic:

• Make new grants as unrestricted as possible, so nonprofit partners have maximum flexibility to respond to the crisis.
• Reduce what we ask of our nonprofit partners, postponing reporting requirements, site visits, and other demands on their time during this challenging period.
• Contribute to community-based emergency response funds and other efforts to address the health and economic impact on those most affected by this pandemic.
• Communicate proactively and regularly about our decision-making and response to provide helpful information while not asking more of grantee partners.
• Commit to listening to our partners and especially to those communities least heard, lifting up their voices and experiences to inform public discourse and our own decision-making so we can act on their feedback. We recognize that the best solutions to the manifold crises caused by COVID-19 are not found within foundations.

While these measures are specifically focused on COVID-19, the council also advocates for long-lasting change in the areas of diversity, equity and inclusion as well as how philanthropists partner with nonprofits and the community working for social change.

Indiana philanthropy organizations advocating for change

Many Indiana organizations were among the philanthropists that accepted the pledge, Cummings said, and the expectation is that many of them will continue to accept the challenge to evolve. She also noted that numerous Indianapolis philanthropic organizations have already embraced change.

“Clearly, nothing in society globally is the same now as it was two years ago,” Cummings said. “No one has ever seen something this unprecedented. What happens next? There’s kind of a middle phase of trying to move as a response to recovery.

“What we hope to see is that our members will continue some of the practices that were learned at the height of the pandemic, including alternative reporting processes and an increase in unrestricted funds,” she said. “These are things that allow nonprofits more time to focus on their core mission.”