Community foundations mobilize more than $1 billion for COVID-19 relief
In what the Community Foundation Public Awareness Initiative is calling an "unprecedented response," community foundations across the United States have mobilized more than $1 billion to support nonprofits on the front lines of the COVID-19 pandemic.
A study released by CFPAI found community foundations have already granted more than $800 million of those funds, representing a payout of more than 80% in less than four months. The grants provide "critical support to those who are facing challenges such as lost income, unstable housing and food insecurity," said CFPAI in a news release about the study results.
Akron Community Foundation is among those that have mobilized resources to help local residents impacted by COVID-19. In March, ACF established the Community Response Fund for Nonprofits to address emergency needs that arise in Summit and Medina counties as a result of the outbreak. Since then, the fund has distributed $453,298 in grants to local nonprofits and has expanded its focus to include the crisis of systemic racism.
But the impact of community foundations goes beyond coordinating response funds. The CFPAI estimates that at least $1 billion more in additional grants have been made by donor-advised funds managed at community foundations since the start of COVID-19.
In recent years, donor-advised funds have become one of the fastest-growing philanthropic planning tools in the marketplace. These funds are popular because they allow an individual or family to make a tax-deductible transfer that qualifies as a charitable contribution, and then recommend grants to their favorite charities when the time is right. Operating like a checking account for charity, donor-advised funds provide maximum tax advantages for the donor while eliminating the burden of administering a private foundation.
Indeed, the global health crisis is precisely the reason many donors establish donor-advised funds in the first place: to be ready to give when needs are the highest. These funds often serve as an important lifeline for nonprofits during periods of hardship, as evidenced by the $821.9 million given to nonprofits from donor-advised funds in March and April alone. That figure is from just 64 community foundations surveyed out of hundreds across the country and represents an increase of nearly 60% compared with the same period last year.
"Many of our local nonprofits are facing an unprecedented situation where they’re being asked to serve more individuals, provide more services and, often, do so with fewer financial and human resources," said Sylvia Trundle, chair of Akron Community Foundation’s Community Investment Committee. "These grants are quickly providing them with necessary funding at a time when speed is crucial."
As an advisor, consider working with your clients to activate their existing donor-advised funds or establish new donor-advised funds to help respond to the needs created by COVID-19. A donor-advised fund helps the community right now and also allows your clients and their families to build a nest egg to address our community’s needs during future crises.