As Nonprofits Confront Immediate Existential Threat, the Future Is Now

Imagine a Los Angeles where the neediest among us have nowhere to turn for food and other critical human needs, where the rate of people experiencing homelessness spirals further out of control and where already-limited access to healthcare ceases to exist because community clinics shutter.

Sound implausible? Think again.

COVID-19 has pushed vulnerable populations further to the margins and dealt a punch to nonprofit organizations across the nation. According to a recent study by the Center for Effective Philanthropy, 81% of nonprofits surveyed have reduced services, and 90% reported delaying the fundraising activities that make those very programs possible.

The 2020 Greater Los Angeles Homeless Count, released in June, found that the number of people experiencing homelessness jumped nearly 13% from the prior year to 66,000. Those figures were compiled pre-pandemic and are likely to be higher now.

Food insecurity poses an even greater dilemma. The Los Angeles Regional Food Bank estimates one in five residents of the county (approximately two million people) do not know where their next meal will come from. Countywide, demand at the 600 local agencies under the Food Bank’s umbrella has risen by 80% during the pandemic; but donations dropped steeply from traditional sources such as restaurants and grocers.

Is the outlook entirely bleak? Not necessarily. But as we speed toward 2021 with infection rates at record levels, action is needed. Los Angeles has always risen to meet its challenges, but unprecedented demand requires adaptability. As John Chamness, a divisional commander for the Salvation Army’s Southern California branch, stated, “Any organization that’s going to survive this pandemic is going to have to pivot and find new ways to serve people.”

One thing is certain: nonprofits are going to retrench and require as much assistance as possible along the way.

Nonprofits are going to retrench and require as much assistance as possible.

Fortunately, we are seeing bold measures from the region’s bellwether funders. The Annenberg Foundation announced in June that it would close the Annenberg Space for Photography to concentrate its philanthropy on pandemic recovery and expand its commitment to social and economic justice. The Jewish Community Foundation of Los Angeles (which I proudly lead), has redirected the entirety of our 2020 institutional grantmaking — $8.3 million in total, the largest amount ever to a single cause — to COVID-19 response. We provided an initial $2.5 million to 22 local nonprofit organizations addressing food and financial insecurity, homelessness and access to healthcare. Another $3 million was awarded this week, $1.5 million of which went to sustain 16 local Jewish causes and programs; $1 million also went toward day-school tuition assistance and summer camp scholarships to ensure meaningful Jewish experiences.

In an unprecedented move, five of the nation’s largest private foundations aligned to sharply increase their funds available for giving now. These funders are borrowing billions of dollars in the form of 30- and 50-year bonds, financing instruments historically limited to governments and corporations. The debt issuances will enable these foundations — The Ford Foundation, Doris Duke, W.K. Kellogg, John D. & Catherine T. MacArthur and Andrew Mellon — to keep their endowments intact while increasing payouts by $1.7 billion within the next two years.

We must encourage individuals with means to step up and contribute now, including those with donor-advised funds (DAFs), the nation’s fastest growing charitable-giving vehicle. Several hundred generous Jewish Community Foundation donors have contributed $5.5 million to COVID-19-related causes to date primarily through DAFs administered by our institution. Other high-profile national campaigns are propelling giving, as well. Californians David and Jennifer Risher — the drivers behind #HalfMyDAF — along with three other families, committed $1.4 million in matching grants of up to $10,000 for each philanthropist that halved their donor-advised funds by the end of September. This bold initiative generated $8 million in donor giving, in addition to its matching grants.

We cannot discount the prospect that, despite these extraordinary measures, an untold number of organizations and programs could still shutter. Venerable nonprofits elsewhere are in jeopardy. Southern California, despite its impressive record of social innovation, is no exception. Taking a page from the corporate world, nonprofits need to consider absorbing smaller programs and initiatives into larger, more viable social enterprises.

Hard choices are inevitable but necessary. Finite resources must be directed to nonprofits with the capacities and best prospects for delivering their programs and services to the greatest number of Angelenos, at a time when they have never been more needed.

Marvin I. Schotland is president and chief executive officer of the Jewish Community Foundation of Los Angeles, which manages $1.3 billion in charitable assets and, in 2019, distributed $128 million in grants locally, nationally and around the world.