This text is part of the special Philanthropy section
The pandemic has created or accelerated a series of upheavals in the philanthropic world. Until now a place of power based on the traditional model of charity, philanthropy is now acquiring new priorities and new methods of financing. The community seeks in particular to act directly on the causes of inequalities instead of relieving only the symptoms.
Usually called upon to create long-term strategies, foundations have more than ever had to be agile and finance the urgency of the situation during the past year.
Karel Mayrand came to head the Foundation of Greater Montreal at the height of the pandemic. The subsidy programs he was supposed to review were replaced by emergency funds. In the space of a year, the funds of this type collected by the Foundation have increased from 13 million in 2019 to 33 million in 2020.
The federal government has used similar philanthropic lighthouses, such as the United Way and the Red Cross, to raise funds in extremis. “The urgency struck, and this is what allowed us to be agile, to free us from the bureaucratic heaviness specific to the medium”, notes Karel Mayrand. Collaborations have also multiplied, as is the case with the consortium between the foundations of Molson and Saputo, among others.
A systemic approach to fight inequalities
In 20 years of economic growth, the Foundation of Greater Montreal has also observed that issues such as social inequalities, food insecurity and systemic racism have persisted and even worsened. “Like a magnifying glass, COVID-19 has magnified the inequalities that already exist in our communities. We understood that when we are struck by a pandemic, we are not all equal, ”observes Karel Mayrand.
From the charity model where the symptoms of poverty were relieved, philanthropy is now developing a systemic approach that aims to eradicate the problems at the root. For this transition to be successful, the general manager of the Cantine pour tous, Thibaud Liné, insists on the fact that the projects must be supported over the long term. Otherwise, the Good Samaritans resign themselves to continually plugging water leaks in the hull of the ship, without bothering to repair or replace it.
The Collective on Social Inequalities is part of this vision. It brings together around fifteen philanthropic foundations that are mobilized to fight against inequalities, rather than being content to soften them.
In the past year, the cause of the environment has risen to the top of the priorities of the youngest donors. They are now as interested in these issues as in more traditional areas such as health, education and culture. Some even offer mentoring to established organizations to anchor these new questions in as many missions as possible.
Diversity and inclusion also appeared in many strategic plans around the turn of 2021. The trend could be explained by the fact that racialized populations have been disproportionately affected by the pandemic. The story of George Floyd during the crisis in particular had an amplifying effect on this reality. However, the philanthropic community has very probably distributed less than 5% of its resources to racialized communities in the past. “Donors as employees are asking more and more how it is that the money does not go to these people”, notes Karel Mayrand.
For more responsible assets
In addition, the philanthropic community is debating the appropriate percentage of funds to distribute. Currently, organizations distribute approximately 3.5% of their assets, or between 16 and 20 million grants out of its 400 million assets for the Foundation of Greater Montreal.
However, Karel Mayrand believes that the stake lies rather in all the assets of the foundations: “The way in which we invest our money should support our objectives. It is not possible for an organization to generate returns for its community while destroying other social fabrics elsewhere. We must ensure that the investments also serve the common good. The Foundation of Greater Montreal has notably adopted a new responsible investment policy for this purpose.
This trend coincides with the higher expectations of donors about the impact of their donations. The latter are more concerned about the impact of their investments and the use of assets since the turmoil of the pandemic.
The rise of mission funding
Unlike large philanthropic institutions, small organizations like Mothers with Power experienced increased insecurity, relying on donors who saw themselves in a vulnerable situation.
Director Valérie Larouche has therefore chosen to return to the essence of her mission: the education of women at the head of a single-parent family. Determined to continue to offer support services throughout the crisis, it has focused its development efforts on releasing funds allocated to operations.
Before the health crisis, philanthropy mainly organized its funding by projects. Today, mission funding has proven to be a more effective method of funding. This more generic type of donation allows organizations to choose how to operate without feeling like they are constantly running out of resources as initiatives progress.
“There are certainly always some abuses with mission funding, but the losses are certainly less important than the gains made by the foundations,” said Thibaud Liné.
Not to mention the fact that mission funding, often spread over several years, greatly reduces the workload allocated to writing grant applications. This can easily eat up 10 to 20% of resources in the philanthropic environment.
Mission funding also seeks to address the high turnover rates in the philanthropic world. At the Cantine pour tous, the food and staff needs were just as urgent during the pandemic. “In general, donors prefer to meet non-recurring needs, such as extra food at the Guignolée, but we must focus on meeting annual needs, such as employee salaries, which allow the organization to function.” , says Mr. Liné.
Without being able to offer competitive salaries, the philanthropic community has a high turnover rate in its ranks. Many experienced employees retrain in the community, but there are limits to what they are willing to accept in order to find meaning in their work.
For Valérie Larouche, the repercussions of the pandemic will still be felt for a few years. “It is not over, because we are still facing salary and expense increases. The needs have increased, but not necessarily the quality of the service. However, to keep or develop my staff, I must be able to offer competitive conditions on the job market, ”she says.