In the wake of COVID-19, there has been a lot of discussion — especially in the blogosphere — about foundations “digging deep” both by increasing annual spending and potentially spending down endowment assets. To some voices in philanthropy — including the Ford Foundation’s Hillary Pennington (Bell, 2020), Benjamin Soskis (2020) of HistPhil and the Urban Institute, and the Libra Foundation’s (2020) Crystal Hayling — the magnitude of the crisis demands considering all financial resources. Over 300 donors and grantmakers have now signed a joint letter asking Congress to temporarily raise minimum foundation payout levels and set a payout requirement for the first time for Donor Advised Funds (DAFs) to respond to the unprecedented need among nonprofits (Daniels, 2020).
In our first two posts, we focused on risks facing nonprofits and their likely cash on hand, especially in Michigan, but with findings representative of nonprofits nationwide. In this third post, we pivot to looking at endowments as a resource for recovery. By the term “endowments” we mean both the investment holdings of traditional foundations, and hybrid vehicles such as Donor Advised Funds (DAFs),… Read more »