Shaking the foundations: Calls for change in private foundation practices during the COVID-19 pandemic

Todd L. Ely and Thad D. Calabrese

Chapter Chapter 31 in Case Studies on Nonprofit Resilience Management, 2025, pp 256-265 from Edward Elgar Publishing

Abstract: The COVID-19 pandemic served as a catalyst for the airing of historic grievances about private foundation practices. As the nonprofit sector experienced tremendous revenue uncertainty, attention turned to the more than $1 trillion worth of assets held by private foundations. Calls for higher payouts and more flexible grantmaking came from an array of nonprofit stakeholders, including foundation leaders themselves, with renewed Congressional interest in private foundations. Umbrella organizations reacted aggressively to address criticisms through pledges, actions, and research. Many foundations pledged to loosen restrictions on existing grants, make more flexible new grants to the most-impacted communities, reduce reporting requirements, and learn from these practices for philanthropy following the crisis. The responses stretched from meaningful changes in grantmaking to increased giving, including some through innovative means. Early evidence suggests incremental, but lasting, changes in how foundations operate particularly around minimizing the administrative burden on grantees, increasing unrestricted funding, and heightened attention to racial equity in foundation activities. At the same time, private foundations successfully avoided more stringent regulation of grantmaking payouts, an outcome that was argued to weaken resiliency by leaving foundations less prepared to address future crises or fulfill missions in perpetuity.

Keywords: Private foundations; Payout rates; Endowment; Grantmaking (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035328567
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