by Charlie Lamson
With the arrival of COVID-19, philanthropic organisations must carefully assess their role in promoting the sustainable support of domestic and international funding programmes. In the US, the UK and elsewhere we have seen philanthropic donors move quickly to adjust their means of working with civil society organisations by relaxing project timelines, offering no-cost extensions, anticipating the impact of COVID-19 on agreed deliverables, extending reporting deadlines, and providing space for NGOs to more freely utilize funding to support staff and programmes that might not be central to stated grant objectives.
In Ireland, organized philanthropy (in particular for internationally focused not-for-profit organisations) is at a fraction of the levels that it is in other countries (combined domestic & international philanthropic support represents just 2% of total charitable market support as opposed to 15% in the UK). As a result, the collective financial impact of COVID-19 on the relationship between iNGOs and Irish Philanthropists will be limited.
Furthermore, Irish donors such as the Community Foundation and the Ireland Funds essentially operate as donor advised funds with limited or no endowment. As a result, in the coming months they will need to engage in their own fundraising activity in order to raise funds for disbursement. (The Community Foundation has launched a domestically focused COVID-19 Response Fund.)
Regardless of whether a funding partner is based in Ireland or elsewhere, it is critically important for Irish iNGOs and fundraising teams to actively engage with their institutional and corporate donors to clarify challenges and expectations and establish a collaborative plan moving forward.
During a recent webinar hosted by the US-based Nonprofit Quarterly (Responding to COVID-19: A Dialogue with Foundation Leaders ), the following actions were presented as critical steps that organisations must take in the days/weeks ahead;
- Contact your donors with a clear outline of your challenges and have a plan in place for moving forward. It is not a good time for blind or panicked calls.
- Ask funders to actively use their own social capital to get on the phone to other donors.
- Develop a combined outreach strategy with your programme partners and collaborate to push their donors as well as yours. This will create more support rather than create competition.
- Now is a good time to be bullish. Look at where your organisation is underinvested and talk to donors about filling the gap.
- Organisations need to look at revising their case for support. A critically important issue in the next 6 months will be the communications piece.
- Focus on the beneficiary. We need to look at process and outcomes rather than organisations and outputs.
Collaboration between not-for-profits and donors
A commonly held view is that COVID-19 will likely push charities and donors to collaborate more effectively than they have in the past.
- Donors may start to more actively ask grantees how they are collaborating with peer organisations to improve efficiency and impact.
- Donors may start look more closely at their own process of engagement with grant partners – to become less a donor and instead a more active / collaborative partner and/or service provider.
- Donors may start looking at their own processes to expand their own methods of collaboration.
A significant increase in philanthropic engagement among (the growing number of) high net worth Irish citizens is unlikely the coming year unless significant encouragement or pressure is brought by the not-for-profit community to potential donors and the government. This projection is based on two issues; the first is that until the government develops a tax policy designed to incentivize philanthropic engagement, many potential donors will remain on the sidelines. (A government scoping exercise is currently in the works but its timing and outcome remain undetermined.)
The second issue is that the culture of philanthropy in Ireland remains informal and decentralised as the majority Irish major donors tend to give quietly and in many cases through once-off gifts. As a result of this tendency, coordinated, strategic and impactful Irish philanthropic support of domestic and international social services will likely remain beneath its full potential even as demand for social services is likely to increase significantly.
To address this issue, the domestic and international not-for-profit community should consider new ideas to pressure the government to amend the current tax policy to encourage greater support from Ireland’s high net worth community. It is also a good time to call on the high-net-worth community in Ireland to work less quietly and more collaboratively to bring their wealth and influence forward and actively consider their collective role in ensuring that Ireland continues to support those who are most in need.
Private Philanthropy vs State/Government funding
While many established foundations have quickly moved to work with grant partners to address the immediate economic and programmatic challenges of COVID-19, it remains unclear what the projected economic downturn will have on philanthropic engagement in the coming years. However, some possible scenarios are as follows;
- Support from Ireland-based donor/fundraising organisations such as the Ireland Funds and the Community Foundation will likely be impacted by more limited support from their donor pools.
- Irish Major Donors will potentially scale back their giving
- Endowed foundations such as Ford are currently spending from their endowments to meet the immediate challenge of COVI-19, stating that they work from a three-year income projections. It is not clear what decisions they will make in future years.
On the Government funding side, Irish Aid and other non-Irish state funded overseas development programmes are statutory by design - as well as tied to far broader budget considerations. As such, future Irish Aid spending will be challenged by politics and conflicting priorities brought about by the economic downturn. Important points to note here are;
- Irish Aid is contacting grant partners to assess 2020 year end spending and output projections.
- It is highly likely that many Irish Aid funded projects will remain uncompleted and underspent as a result of COVID-19.
- The 2021 budget will be determined by an undetermined political coalition overseeing an undefined economic downturn.
It is therefore critically important for the iNGO community to promote the crucial need for overseas aid in the months ahead.
Charlie Lamson is an independent consultant, former CEO of Sightsavers Ireland and former Dóchas Board Member. The views offered in this piece are the independent views of Mr. Lamson.
You can contact Charlie Lamson at c_lamson(at)hotmail.com