During this massive economic upheaval caused by the COVID-19 pandemic, government and media attention is focused on the impact on businesses, financial markets, and the economy, but the impact on our nonprofit sector will be worse. Direct service nonprofits will be stretched by the sudden increase in economic and medical needs. At the same time, very few nonprofits have the financial resources to sustain themselves through a sudden downturn in support or to pay employees on sick leave.
If past stock market declines are any guide, foundations themselves may also cut back their grantmaking to stay close to the 5% payout floor. Of course, foundations should do the opposite and increase their grantmaking in times of trouble that was always the justification for keeping the 5% payout below average investment returns. But given this reluctance to increase spending, what can be done to avert the double whammy of a crisis of need at the same time as a drop in contributions?
To read more on the article titled "Foundations: Use Your Balance Sheet to Help" click here