Changing metrics for impact

First, donors’ focus was on speed.

Even before the pandemic hit, research showed that half of the country’s nonprofits had only three months’ worth of cash on hand.  Now, mired in the turmoil of coronavirus, they were concerned with serving a growing and needier client population while paying their own bills, including salaries.

Philanthropic response funds, like the PHL COVID-19 Fund — a joint effort of the City of Philadelphia, Philadelphia Foundation, and the United Way of Greater Philadelphia and Southern New Jersey  — were tasked with providing relief and rapidly deploying millions of dollars to keep these vulnerable organizations from folding. To date, the Fund has awarded $17.5 million to more than 500 nonprofits.

The COVID-19 Arts Aid PHL Fund, a collaborative effort of the Greater Philadelphia Cultural Alliance, the Philadelphia Cultural Fund and the City of Philadelphia’s Office of Arts, Culture and the Creative Economy, is another fund built on speed.

“By design, this was an emergency fund in the truest sense,” explained Kelli Paul, the Greater Philadelphia Cultural Alliance’s  vice president of development. Launched in April, with leadership gifts from the  William Penn Foundation, The Barra Foundation and the Wyncote Foundation, COVID-19 Arts Aid PHL Fund has awarded $4 million to 467 arts and culture organizations and 1,025 individual artists.

“It focused on providing grants for individual artists as well as small arts and culture organizations and mid-sized organizations whose operations, revenues, work and livelihood have been devastated by the COVID-19 pandemic.”

Next, donors found speed demanded change.

Before coronavirus, nonprofit leadership were lectured by grantmakers on the necessity of proving their effectiveness by measuring and tracking outcomes. The promise was that data done well would attract more funding. The power was squarely in the grantmakers’ court.

Antony Bugg-Levine, CEO of the Non-Profit Finance Fund advises donors to move away from business as usual to help nonprofits survive. And one of the things he urges is to suspend traditional reporting or evaluation requirements: “Any hour an organization spends filling out donor reports or preparing for donor visits distracts from planning and responding to this crisis…limit the tax you impose on your funding by making them produce information that serves your compliance rules rather than their community.”

This is a message funders are beginning to heed.

“We postponed reporting requirements and asked our grantees to tell us if they could engage in the work the original grant was intended to support and if not, there would not be any reporting required,” explained Russell Johnson, president and CEO of HealthSpark Foundation, a $40 million organization that is focused on improving the quality of life in Montgomery County.

“There were no reporting expectations placed on these grants,” added Paul. “However, the Cultural Alliance remains engaged with our grantees as the COVID-19 pandemic continues. One way in which we are staying connected is through surveys of our grantees at the three- and six-month marks from their award.”

Finally, out of crisis is emerging a new donor-grantee business model.

Joanne D. Craig, vice-president for programs for The Foundation of Delaware County said the lack of outcomes tracking is a sign that funders are moving into a new direction — trust-based philanthropy.

Craig, who sits on the Delaware County COVID-19 Response Fund’s advisory committee which reviews the grant applications, said the fund started in mid-March and has raised almost $700,000. They have made grants to legacy human service organizations, many of whom the Foundation has a longstanding relationship.

“When you are feeding someone, you can’t wait. We started with an application which we tried to make as simple as possible and then we do our own due diligence to turn the grant around as quickly as possible. We stay connected so we are not looking to make the funder do a formal (outcomes) report.”

According to the Trust-Based Philanthropy Project, philanthropy will be “more successful, rewarding, and effective if funders approach their grantee relationships from a place of trust, humility and transparency.”  The project, the brainchild of The Whitman Institute, the Robert Sterling Clark Foundation and the Headwaters Foundation, is a five year peer-to-peer funder initiative to examine the power inequalities between donors and grantees.

“[T]oo many foundations are approaching their grantmaking with old frameworks that are barely helping nonprofits — especially those working on a grassroots level — to keep their heads above water as they try to address inequities and multi-faceted problems within complex systems,” argues John Esterle, co-executive director of The Whitman Institute.

There are six guiding principles of trust-based grant-making including providing multi-year unrestricted grants, streamlining and simplifying paperwork, and soliciting and acting on grantee feedback.

These are concepts that HealthSpark Foundation is adopting. “We converted all open grants to ‘general operating support’ grants lifting any restrictions on the use of our funds – in other words, the recipient is free to use the funding for whatever business purpose the deemed necessary,” Johnson said.

Johnson explained that HealthSpark Foundation had made two general operating grants to long-standing safety net program intermediaries: “Both were general operating support grants.”  In addition, HealthSpark contributed funding to the MontCoPA Covid-19 Relief Fund where Johnson served as one of four grant reviewers.

The MontcoPA COVID-19 Relief Fund was established at the end of March and has raised over $800,000 and awarded 135 grants. “Those grants were awarded without restriction,” Johnson said. “Most applicants were requesting grant support to purchase personal protective equipment, to purchase food, gift cards for consumers to use as their needs dictated, and for educational/socialization supports to students and people with disabilities.”

Instead of a formal evaluation, Paul said that the Greater Philadelphia Cultural Alliance is conducting a survey of COVID-19 grantees so that the organization can “more deeply understand the impact of the pandemic on their work and how our relief funds have supported them.”

“This will better inform how we — the Alliance, our region’s donors, audiences, funders and more — can best support the arts and cultural sector now and in the future as reopening occurs,” Paul added.