20 Mar Grantmaking After COVID-19
By: Artie Pingolt
Yesterday I received an email from a missionary where he tried to describe our current grantmaking situation dealing with coronavirus. He put it this way: “There is no telling what our understanding of being in ‘good shape’ will be when this is done.”
One area that I believe will NOT be in good shape over at least the next couple of years will be the endowment funds that support the charitable grants that we apply for.
Nearly all of these foundation endowments are invested in some combination of stocks and bonds. And while most bond funds are providing relative safety for investors, stock markets around the world are getting crushed, down 20, 30, 40+%. This WILL have a negative impact on a foundation’s ability to make grants.
Typically, the “Prudent Person Rule” of a foundation dictates that the foundation makes grants totaling no more than a certain percentage (often 5%) of the total assets of the foundation’s endowment. By simple mathematics, 5% of a smaller endowment total will mean fewer funds, then more funds for grants as the value of the endowment increases in value again.
The chairman of a midsized Catholic foundation wrote me the following yesterday: “The foundation has suspended all board grants until we reassess in May- heck of a time! I suspect our (grantmaking) budget will be slashed or we will look to support those establishments with the greatest needs due to economic impact.”
The total length of time for the entire cycle- stock market decline/crash to subsequent return to original value- is rarely less than 4 years. We might also apply these figures to individual donors, whose ability or inclination to make charitable gifts can decline as their own investments (stocks) decline in value. In the USA, for example, the stock market declined 7% in 2008 and charitable giving declined by the exact same amount, -7%.
I share this not so that we panic about any potential future grants but so that we begin now, not later, to adjust our grantmaking expectations for project funding as we look ahead. This is a time for each of us, according to our own charism-driven priorities, to determine which ministry initiatives are essential and which can be postponed until there is greater funding.
In closing, I offer a reflection that might also serve as a prayer for each of us. It is from fellow missionary St. Francis de Sales:
The same everlasting Father who cares for you today will take care of you tomorrow and every day. Either He will shield you from suffering, or He will give you unfailing strength to bear it. Be at peace, then, put aside all anxious thoughts and imaginations, and say continually:
The Lord is my strength and shield; my heart has trusted in Him and I am helped. He is not only with me, but in me and I in Him