The Road Ahead: How the Events of 2020 Might Shape the Future of Philanthropy
Transcript of the video:
MICHAEL VOSS: Thank you for joining Stanford Social Innovation Review webinar, The Road Ahead: How the Events of 2020 Might Shape the Future of Philanthropy. This webinar is part of our ongoing multimedia series, Giving with Impact which is produced in partnership with Schwab Charitable. I'm Michael Voss, publisher at Stanford Social Innovation Review, and the host and moderator of today's webinar.
Before we begin, I want to take a moment to recognize that Stanford University, where SSIR is based, sits on the traditional land of the Muwekma Olone, people whose homeland encompasses most of the San Francisco Bay Area, and I give honor to these original stewards of the land.
Stanford Social Innovation Review is part of the Center on Philanthropy and Civil Society at Stanford University. We launched our webinars, called SSIR Live, to provide a forum for people involved in social innovation to present important topics. We host new webinars every few weeks, choosing topics that are of interest to people like all of you, and encourage you to look for our upcoming webinars on our website SSIR.org. We also encourage you to tweet and bring others into the conversation during this webinar using the hashtag SSIRLive.
Finally, I'd like to thank Schwab Charitable for their ongoing support of the Giving with Impact podcasts and webinars like this one. And now on with our program.
It goes without saying that the pandemic crises of the past year and a half, have created unprecedented challenges for the nonprofit and philanthropic sector. At the same time, these unprecedented challenges have elicited an equally unprecedented response, with nonprofits evolving their operations approaches and services at a previously unimaginable speed, and donor and funder organizations making vast amounts of philanthropic dollars available to support this work. But exactly how much funding was made available, and what besides funding changed in philanthropies approach to supporting organizations on the front line of addressing issues of health, justice, and equity? And, more importantly, as we start seeing a path towards a new normal finally emerging, what will the changes of the past 15- plus months mean for the future of nonprofits, philanthropy, and social change?
To help clarify what happened in our sector, and what that might mean going forward, we're extremely fortunate to be joined, once again, by a pair of speakers with a wealth of firsthand expertise on these issues from both a local and national perspective. And I say ‘once again' because this is a reunion of sorts, in that Nicole Taylor and Kim Laughton were part of our webinar back in April of 2020, Philanthropic Efforts to Battle COVID-19 Around the Corner and Around the World.'
And I also have to take a moment to let everyone know that Jennifer Alcorn, the Deputy Director of Philanthropic Partnerships at the Bill and Melinda Gates Foundation, who was originally scheduled to participate in this discussion will unfortunately not be able to join us today. Jennifer was called away at the last minute of an emerging matter.
So for those of you who haven't been introduced to her before, let me briefly introduce Nicole Taylor, President and CEO of the Silicon Valley Community Foundation. Nicole has a rich background in San Francisco Bay Area philanthropy, nonprofit administration and fundraising ,with extensive experience in the private and public sectors.
I'd also like to introduce our friend, Kim Laughton, who is President of Schwab Charitable, a nonprofit donor-advised fund provider established with the support of Charles Schwab and Company, to make charitable giving simpler and more tax-efficient for clients.
So with that brief introduction let me turn things over to Nicole to start us all.
NICOLE TAYLOR: Thank you so much, Michael. I really appreciate that introduction, and Kim it is great to be with you, once again. I am going to share my screen, so that we can get started.
Really excited about… I mean, it's hard to believe it's been a year once… for all, you know, on this, but it's been quite a learning journey for us, particularly in the community foundation world. And, today, we're going to be talking specifically about what that means, and what we've learned, and how we going to move forward.
I want to speak about, first, community foundations. Most of the folks on the call probably are very familiar with their local community foundations, but I think it's really important for me to start with this framing because it shapes how Silicon Valley Community Foundation responded in 2020. And we responded very typically in a community foundation manner. Many, many, many of my colleagues around the country responded in similar kind of fashion that you're going to hear me talk about, so I'm honored to not just talk about our work in Silicon Valley, but also as kind of a representative of the Community foundations around the country.
As many of you know we bring together resources and skills from across sectors to solve challenges. That is at the core of what we do. We promote philanthropy in our region and support philanthropists to invest with impact. And, for us, we also use advocacy, research, policy, and grant-making, and have all the tools in our toolbox, if you will, to seek systemic solutions to drive long-lasting community change.
And, you know 2020 it just proved that one of the key roles that community foundations can play is responding to unexpected emergencies or challenges, and we all know we were hit time after time with multiple crises. So what did we do?
In 2020, we leverage our expertise and deep relationships to bring together our partners, aggregate capital, and deploy money quickly into the community. We continued our role as community experts, we closely monitored the gaps and the needs in the communities, and translated that into information and strategies that would inspire donors to give and act, and bring… and just brought to life what was really happening in our local communities, and donors responded.
And the crisis, and I will get more into this, disproportionately affected communities of color, especially Black and Brown communities. It highlighted what… the inequities that had already existed, particularly here in our country. And we used our platform to prioritize support to these communities, and to advocate on their behalf, and to continue to focus on racial equity as we begin rebuilding our communities. And we intend to help to build back a much more equitable Silicon Valley. And, again, my colleagues across the country community foundations are really entrenched in and working through some of the very same issues, and this issue of equity, and how do we make sure that all of our communities, all of our neighborhoods, all of our neighbors can thrive as we move forward.
So let me talk about the lessons learned. The… but before I get there, I have a story, if you will, which will, I think, point to the role that we play, and we were able to play in 2020. And that was the bridge role, bridging resources and communities, for example. So that… one of our leading organizations in our community is Unity Care, and they focus primarily in the African American community and they work with foster youth… or the youth aging out of foster care as one of the core populations. They do many things, but that's one of the core populations they work with. And last December, in 2020… you know, we're still in the heat of everything our Community Action team received an urgent appeal for a long time… you know this long time grantee of ours, and they needed to raise funds for a down payment on a transitional foster youth home. And the land or gave them, literally, 60 days to move out in the middle of the pandemic, and they had 20 young people, ages 16 to 21, with nowhere to go. And our Community Action team our Donor Engagement team or Corporate Responsibility teams all work together to literally send out the SOS to our donors, and we identified four donors and institutional funders of foundations, who are interested in housing and youth causes, so that intersection, and we were able to raise 380,000 for the down payment and keep these young people in their home, again, in the middle of a pandemic, and all of this happened in three to four days.
And this is.. I bring this story up because it demonstrates the work that community foundations can do, our trusted relationships with our partners in the community, our donors, that allow us to be able to respond deeply. And that's the kind of thing that we were able to really do, and I'm so proud of our team, and just hats off to all the work that they've done in 2020.
We also, as part of that, the work that we've done, cross-sector collaboration is crucial, and it became the name of the game during the kind of the response, and it still is because, as we know, we're not out of it and there's still a lot of people suffering and hurting. And Destination Home, which is a supporting organization, or the component organization of the foundation was leading efforts to end homelessness in Santa Clara County, and they have been doing that for years. During the pandemic they aggressively fundraised to help secure resources for families and individuals in need, and raised $36 million from public and private funders, including companies like Cisco, and Facebook, and Google, and Bank of America, and foundations, and we also helped team up with them to raise funds from individual donors. And they were able to leverage county resources and create an infrastructure with over 70 community-based organizations to reach the county's lowest income households to keep them houses so they wouldn't end up homeless. And then they ended up assisting 15,000 families. This… and now they're working on how to deploy the Federal Rental Assistance Program again through the county… in the county of Santa Clara and the city of San Jose. So those are the kinds of things that really just amplified the importance of the cross-sector collaboration and keeping those deep community roots, so that we can continue to do what our communities needed us to do.
That's the pandemic.
Then we had to look at racial injustice. 2020 was a reckoning in this country and around the world. The bravery of a 16 year old to hold a camera while the man was being murdered, and the outcry for justice, and the relearning that many, many in this country have had to do about what are we doing as a country, and what are those injustices, and how stacked the deck really is against Black, Latinx, indigenous, and Asian communities and other communities of color, and our undocumented neighbors, how… and these disparities just came to light, we… none of us could ignore them.
And our daughters were highly responsive to that, as well, and… because COVID first reopened the communities that were hardest hit were these communities of color, and then we had all of the racial justice issues that we faced, same communities being the hardest hit.
We recognized pretty quickly people wanted to help, they wanted to understand how they could get money to who is needed. And we realized by aggregating funds, doing the due diligence on the organizations that would receive the funds, we made it easy for donors to identify what they could do, and who they should support. And they also started looking to us for resources to help, you know, navigate other crises that came to the fore last year.
And our donors are now more engaged than ever and it's reflected in their grant-making. They distributed almost $2 billion, which is a record high in the history of our organization and our foundation and over half-a-billion dollars went to support Bay Area organizations. So we're really glad that we were able to play that role right here.
Let me double-click, if you will, on what we did, specifically, in terms of our COVID response. As we saw that donors were hungry to figure out how to get their dollars out and where to do it, we launched seven response funds. You might say why seven, give me a minute and you'll understand why we need… why seven.
The first was a regional response fund. We started it early February, and it was one of the first response funds in the Bay Area, and, initially, it was going to… you know, remember back in February last year, we didn't know what was really going to happen. We initially started it thinking that the CDC would need support, so we knew that that could be… that could be helpful. And then, eventually, something may happen in the Bay Area that we might have to respond to, and it turns out, of course, it did. So we actually transition that fund to partner with our eight sister community foundations in in the Bay Area region, and that fund focused on those facing the most challenges, low income residents, those without health insurance, gig worker, workers with cut hours or lost jobs, low income communities of color, and our un\documented neighbors.
We lead the coordination in fundraising, and donors could designate which county they wanted to support because we had lead agencies in all 10 Bay Area counties that they could… that they knew were on the ground and get the resources out to individuals and families.
Then we launched additional funds because it was clear that in addition to the need that nonprofit… that individuals and families had, nonprofits, as you all know, many of you represent nonprofits, it was a rough year, continues to be really hard, that we needed to set up a fund to support our nonprofits. We also need to set up a fund to support small businesses, and then we had additional funds to support K-12 education, and one for child care. We also partnered with the City of San Jose, the County Santa Clara, and the County of San Mateo to aid their specific communities.
With what nonprofits were facing we also made all of the grants that we did general operating support, and simplified the process, reduce the application, and pretty much eliminated the reporting burdens for the nonprofits during that time.
The total that we raised across the seven funds was $64 million and, again, because we did it… we did… most of those funds were across the Bay Area, we were able to help 680,000 individuals and families, and… with basic things like food and rent and financial assistance. And we were getting stories of people who were telling us that families just needed diapers, they literally just needed diapers for their baby, or formula for their babies. And that's what we… our donors, we were able to engage to help them just do some of that basic support that was needed.
In our two local counties, San Mateo County and Santa Clara County, we made grants to support 378 nonprofits, and that… not just in social services, but in other issue areas, like the arts, environment, education, really critical support, and did all we couldn't to raise funds to get those nonprofits the… again, the general operating support they needed.
And then I… early in the pandemic and then a little later in the year, I, actually, put out a specific request to our donors. At first it was to ask them to give an additional… up to an additional 5% from their donor-advised funds, and later I was more much more aggressive. and I said, ‘You gave before, in March, when I put up a call, in October, when I did it again' I said, ‘People are still in need and help and, you know, think about giving an additional 10, or whatever you can do for your donor-advised funds to help.' And our donors stepped up, they gave almost $250 million to support COFID causes and 114 million stayed right here in the Bay Area.
I have a couple quotes here which emphasize some of what I'm talking about. One of the partnership with our sister community foundations, my colleague, Susan True, from the Santa Cruz Community Foundation, sent an amazing note to me about how we were able to help farmworkers in Santa Cruz, because of our Regional Response Fund.
And then one of our lead agencies in our part of the Bay Area region, Samaritan House in San Mateo County, the second quote, talked about what the money actually meant to the residents who were… they were working with so that they can stay housed. And they talked about a day… you know, they sent a note about a day laborer who got sick and was going to have to go into the hospital, and wasn't able to work, and was worried about getting evicted or what would happened with his family. And the funds were able to provide for that family, so that they could stay housed, and, you know, once he was well and back home allowed them to just continue to live and be during that time.
If you will note, these quotes also talk about the communities that were disproportionately affected, communities of color, in both cases, Latinx communities. We saw, as I referenced earlier, that on top of that pandemic then came the cries for racial justice in this country. With the murder of George Floyd, it reinforced our own commitment to racial justice and equity as a community foundation. And as funders, we knew that there has been a historical power imbalance between philanthropy, those with the resources, and the organizations that we resource and fund. And we knew that moving forward, we had to shift this imbalance, we had to correct this imbalance.
So in addressing racial justice, first, we knew we needed to increase funding to communities of color, and immediately we jumped on that and created a giving guide for Black-led organizations to encourage community support of local, state, and national Black-led organizations, and our donors gave over $5 million, almost $5-1/2 million to organizations featured in this guide.
Throughout 2020, we hosted or co-hosted 23 webinars to inform owners of pressing issues facing our communities, and spotlighted the work of our community partners. We did one on bias and structural racism with Stanford Professors Ralph Richard Banks and Jennifer Everhart. Jennifer is the author of the New York Times bestseller, Biased.
We also did one on diversity, equity, and inclusion in the news with NPR and our Bay Area NPR station KQED, the presidents of both of those organizations, and we talked about who is reporting the news, and who is in the news, and how news gets reported in different communities. And one of our donors actually stepped up and wanted to have a rallying cry on the fact that undocumented neighbors who are still doing frontline work, including in the agriculture sector, had no access to the relief dollars that were coming down, and many donors rallied to support our undocumented neighbors during that time.
We also created a community advisory council. So one thing that people ask is, you know, ‘How do we… how does philanthropy, how to foundations actually engage authentically with their communities and particularly leaders of color?' So we formed a 24-member advisory council, and their voices and perspectives helped inform our strategic direction, inform what was happening on the ground, where the needs were, and what policies we could be advocating for based on what their communities needed.
And with other funders, we launched the California Black Freedom Fund, which is a statewide funs to resource Black power building organizations for lasting policy, social, and economic changes across the state. And to-date, we've raised $39 million. It's $100 million five-year initiative, and we… you know, the first year we almost… we're almost at 40 million, so really excited about that work, and we're already making grants to organizations again on the ground.
So after… not after, kind of simultaneously, while we realized we needed to get resource directly to communities, we also needed to invest in the leaders, themselves, and invest in leaders of color, and movements that support communities of color. So we implemented a framework to do that. We developed and funded leadership development programs. We launched a new grants program for organizations in the areas of arts, culture, environment, health, media and journalism, immigration, neighborhood, neighborhood action, faith, and civic participation. And we did rolling deadlines short cycles, streamlined application processes, so nonprofits didn't have to wait months to receive critical funding. We… end this new… this new set of grants that we've done targeted organizations that have a clear racial justice focus and plan to center, really center the community, that they are serving in their programs and leadership.
And we prioritized emerging, small-, and mid-sized nonprofits, those with budgets, less than a million dollars. For those of you who are on the call, we understand often small organizations don't have a grant-writer report-writer, you had a lot of people wearing a lot of hats. And we knew that it was important… it was important to get them supported.
The next thing that we had because 2020 was that year, were the elections. You know, if a pandemic and regional reckoning weren't enough for our country, we also had one of the most intense election cycles that we ever faced, at least in our lifetimes. And, as we know, our elections faced tremendous obstacles, ranging from cybersecurity to pandemic safety, and we helped encourage philanthropic support. In August, we hosted a webinar with voting rights activist, Stacey Abrams, to learn about voting challenges in the upcoming elections. We also highlighted one of our local organizations, Californians for Justice, that organize young folks to help people understand the importance of voting and getting out the vote. In December, we hosted a reflective webinar about how philanthropy played a role in civic engagement and voter engagement.
The 2020 elections highlighted the importance of early and ongoing support for civic engagement and election work, and our donors gave more than $500 million to support that. And they've done that over the past three years, so wasn't… you know, it got intense and much more dollars were flowing in 2020. It was just something that our donors we're really keen on supporting.
And in our two counties voting rates reached historic levels, and the typical gap of turnout between White voters and people of color, voters of color, narrowed, which is a testament to the work of the local partners that were on this. And since then we've launched a Community Catalyst Fund so that we can continue the efforts to build, power, and encourage civic engagement deeply in communities, particularly those that have been historically marginalized.
So now what's next, right? So that was 2020. Now what's next? So community foundations all over the country are working with local officials to advocate for federal relief in their areas, but also how the funding is going to come down from the Federal Government to the counties and cities and into the communities. Many of us are working locally to ensure that that is done equitably, and figuring out what role the community foundations can play as those dollars get distributed. And many of our grantees are preparing for redistricting, which… following the census results.
Last spring, I served as one of the co-chairs for the Silicon Valley Recovery Roundtable. In many regions in the country, a lot of recovery efforts, a lot of people of cross sectors got together to talk about what does it mean once we get past the pandemic, to recover. What happens when things start opening like they are right now? And from that and other… there was another… there were two recovery efforts in in Silicon Valley, we are now launching a partnership with Joint Venture Silicon Valley and Stanford University around how… and many other partners, the three… our three organizations are taking the lead in terms of how do we mobilize commitments from Silicon Valley employers, how do we leverage local academic institutions, create learning communities of donors, employers, nonprofits, community members, academic experts, so that we can actually put into place those… the recommendations that came out of some really great cross sector work over the summer around recovery.
And we will continue to replicate our fundraising model. We see that donors really do enjoy and find it easy. When we aggregate capital for specific issue areas, it makes it very easy for donors and other funders to give in local communities. And, really, importantly, we continue to lift and center the voices of nonprofits and community partners, and those with the very lived experiences that we say we care about that we want to support, we need their voices in the rooms when we are making decisions when we are deciding on a strategic direction. It was critical during the pandemic and it's going to continue to be critical, and we are taking that very seriously.
We're also continuing to use our community knowledge, as I've talked about, to be that bridge, to help donors be the best philanthropists they can be, and to bridge their resources with where the communities really need the dollars. We continue to host more webinars so that donors can learn about issues. We had a recent webinar with the Obama Foundation on investing in the new generation, the next generation of leaders in our communities. We're going to continue provide general operating support. We're encouraging our donors to continue to provide general operating support. I often talk to some of our donors about how do they invest in companies. Do they go to the CEO and they say they want their investment to go to a particular, you know product or particular part of the company, or do they generally just invest in the company? That's kind of the mindset that I'm hoping we're going to take. Do you believe in an organization, you believe in the leadership? Give them the funds and they will do right by you. They've proven it over and over again.
Then… and we also have the funds that we are… we are supporting California Black Freedom Fund, which I spoke about; Equity Forward, which is the recovery effort that I spoke about; Latin Excel Fund is being launched do invest in Latinx communities and Latinx power building; and our Movement and Power Building Fund to support local organizations that are employing multiple approaches—grassroots, organizing, advocacy—to achieve systemic change on racial and economic justice.
So there's a lot that is next for us and really I see our role as really helping to enable and resource the leaders in our community to do the work that they know needs to get done.
So, with that, I am going to turn it back over to you, Michael, so Kim can get started.
MICHAEL: Thank you, Nicole, and I'll just pass things right back over to Kim.
KIM LAUGHTON: Okay. Let me get my screen setup here. There we go. Well, thanks so much, Nicole. I'm so grateful to be with you here, after a year of what, you know, as you mentioned, have just been unprecedented challenges. As you walked through them, I just sort of forgotten how many things happened in rapid succession. But really wonderful to see how generous your donors were, and, really, it's never been more important to support community foundations, and those community foundations really stepped up. I know many on the call are probably representing other community foundations. I just want to thank you all for the work that you've done.
I wanted to begin my remarks just with a quote from a report that came out recently titled, ‘Philanthropy and COVID-19 in 2020, Measuring One Year of Giving, published by Candid and the Center for Disaster Philanthropy. And I kind of think it states where we are in the arc of the pandemic. We've got a lot of data around giving that I'll share some of it with you, but it's going to take a few years for us to really understand the complete picture of how the pandemic has shaped us as a society and as philanthropists. So over the next several slides, I'll do my best to talk about what we can glean from the data we have so far. Donors have stepped up to support nonprofits working directly on the front lines of the pandemic. Also, they've stepped up to support those that are indirectly affected and being strained. So I'm going to try to address what philanthropy may look like over the next year, and then talk about some of the considerations, both financial and heartfelt that could assist, you know, you as nonprofits, and if their donors on the call, as you kind of consider how to really maximize impact going into this year and the years to come.
So many nonprofit organizations faced fundraising challenges over the past year, a time they were also asked to deliver more services to stem the tide of the unprecedented needs that they had, I am happy to say that across the US donor-advised fund owners did respond. Nicole mentioned that she had reached out twice to her donors to give more, and it's wonderful to see the National Philanthropic Trust Report that they do every year, it was just published about a month ago, that really showed as a sector that the DAF sector did step up.
They were only able to publish the first half of the year, that's all they had collected at the time. I know and coming months that we will be able to look at the full year, and I'll show you some Schwab Charitable data on the full year in a minute. But during the first half of 2020, the grant dollars from DAFs increased almost 30%, the number of grants recommended by donors increased over 37%. And in dollar terms grants from DAFs to qualified charities rose almost 30%, from 6.4 billion the first six months of 2019, to 8.3 billion for the same period of 2020. So as a point of comparison, the rate of growth is nearly double what we had seen from 2018 to 2019, so that's just terrific.
It's also good that the number of grants rose for every charitable sub sector. So human services grant dollars increased almost 79% compared to 2019. They directed more than a billion dollars to organizations like food pantries and homeless shelters, and really address the ripple effects of the crisis. Health grant dollars increased more than 54%, distributing grants to charities on the frontlines of the pandemic, like hospitals, clinics, and mental health facilities.
And I mentioned that I was going to talk a bit about our data just because we can give you a full year of that data, and I think many other DAF sponsors would have similar data, as well. Schwab Charitable donors responded to this need. They increased their giving significantly. They supported nearly 100,000 charities in 2020, with 830,000 grants totaling $3.7 billion. Compared to 2019, the grant dollars increased 35% and the number of grants to charities rose 39%. Some were specifically earmarked for COVID-19 relief, but most were not, right? People were supporting both… some of the charities they already supported, just earlier and with more dollars, and then added charities, as well. Seventy-four percent of Schwab Charitable donors supported at least one new charity in 2020. Wo as they increase their giving due to the amplified need caused by the pandemic, they also continue supporting those charities that they had traditionally supported, again, oftentimes, earlier in the year or multiple times. They also increase their support to the deep and varied needs of their local communities, with over 60% of grants going to organizations within their own community and state. In addition, 62% of grants were not designated for special purpose. As Nicole mentioned, really a focus on trying to make sure that that nonprofits had greater flexibility to deliver those services.
So now that we've hopefully cleared the first phase of the pandemic, and we see vaccines rolling out and being adopted across the country, we are hoping that this this response will continue into 2021. And we're also cautiously optimistic that that's going to be the case. Over half of the respondents, 56% in a recent survey we did have our donors said that they were planning to increase the amount of money they grant over the next 12 months. Another 44% say they plan to support a new charity this year. And the most… they have most interest in organizations that deliver human services, social services, food, housing, and disaster recovery.
I also just want to mention that there was a lot of collaboration done this past year between the national donor-advised fund providers and community foundations to try to ensure that the COVID relief funds were promoted among the national DAFs. So I know Nicole and I, and a number of other partners worked really closely to ensure that we were getting those COVID relief funds in front of the donors that were appropriate. And I think most of those relief funds saw quite a substantial amount of money come from donor-advised fund providers, not only from their local community foundation donor-advised funds, but also from the national donor-advised fund providers.
So how can nonprofits… and I know a lot of people… we have a lot of people listening to this webinar. I believe the vast majority, or at least about half of the largest representation is coming from nonprofits. So I'm going to address sort of my next remarks around how we can sort of sustain this level of giving into 2021 to nonprofits, and just sort of thinking about how you position yourself with donors to try to extract absolutely as much money as you can from them, which is… which I know is your objective and it's also our objective, too, to ensure that we're getting those grant dollars out.
So how can you kind of think about doing that? First, is you want to encourage donors to give non-cash appreciative investments and assets to you. As you all know, the stock markets are near all-time highs and many large donors have increased their wealth substantially over the past few years, the divide between the haves and have nots has never been greater. Appreciated non-cash assets that are held for more than a year offer really, really important tax benefits when compared to giving cash. Obviously, we all want to… we'll all accept cash. But for those donors beyond… they can claim a deduction for the value on their taxes, all donors can also eliminate top capital gains tax, so rather than… if they were to sell those assets they would have to pay a capital gains tax. If they donate it to charity, they don't… you don't have to pay that tax. And so donors really need to understand that, that in addition to… by giving those assets , that it's really a great way to save on taxes, and because they can do that, they can give more than they otherwise would, sometimes up to 20% more than they otherwise would to you all. And I know these materials will be available. There's an eye chart here, but it really does show how much more a donor can give if they give appreciate it investments and assets versus just writing you a check. And so, you know, happy also to provide any of these numbers to you all, if you want to sort of add them to some of your fundraising materials to encourage donors to do so.
You all may also want to encourage your donors to take advantage of what we call a bunching strategy. Others call it concentrating their gifts. But it's a way to take advantage of the current Tax Code to increase the amount they might be able to give. So the tax reform that was done a few years ago radically increased the standard deduction, nearly doubled in size. And because of this substantial increase many people, who, historically, would have itemize her deductions, which would include their charitable gifts, are now finding it more advantageous to just take the standard deduction. So some donors may find that the total of their itemized deductions in 2021 are going to be below that level, and they will just take the standard. And if that's the case they might find it beneficial to what we call bunch, or concentrate, multiple years of charitable gifts into one year. So, let's say, bring forward and give, you know, more than a couple of years, you know, 2021, 2022 contributions or gifts into one year. It would bring it to the level where it would make sense to itemize those deductions on their taxes, so they get the full tax benefit. And so, in addition to achieving that large charitable impact in 2021, it's going to produce a larger two-year deduction than it would otherwise, if they were to take the standard one year. So this, again, example has lots of numbers on it, but it really walks through that. It's great for nonprofits if they can encourage people to sort of give more in a given year. They can also use donor-advised funds to sort of help them with this strategy, where they can sort of sustain more giving and maybe increase their giving because of the tax benefits, and rather than giving… you know, give one year and then not the next. But just know that this is a strategy that your donors have available to them, and can be really, really smart. We see a lot of our guns using it recently.
Charitable giving through provisions of the CARES Act, the Coronavirus Aid, Relief, and Economic Security Act, that was first initiated last March at the onset of the pandemic, and then has been extended through 2021. So the first is that all of us can take a standard deduction for up to $300 in cash contributions, cash, check, or credit card, that are directly to operating charities, and couples can double that and create in and take a standard deduction of up to 600. I know everyone is probably finishing their taxes or already submitted their taxes. Hopefully, everyone has done that for 2020 taxes and they're going to be able to do that again for 2021. So you want to encourage your donors to do that.
More meaningfully, for larger donors, those who itemize their deductions can elect the CARES Act, 100% of AGI deduction limit, which is a substantial increase from what it normally is. That occurred in 2020 and that has also been extended into 2021. So that's very, very important for people to be aware of, and encourage your donors to do that, again.
I also just want to sort of clarify that… and this is really helpful for the nonprofits on the on the line, that all of these CARES Act provisions are only applicable for gifts directly to operating charities, not to any endowed vehicles, like private foundations, supporting organizations, or donor-advised funds. So this is really the opportunity for nonprofits to go directly to donors and say, ‘Give to us.' Right? ‘Don't give to your private foundation, don't give to your DAF. Give it directly to us to take advantage of these extra incentives through the CARES Act.'
And then charities should also be aware that those of your donors who are either approaching retirement or in retirement have a few extra ways to give.
So the first is the qualified charitable distribution, the QCD of IRA assets. If you've got donors who are wealthy enough to maybe not need to take that required minimum distribution. Even though it's been suspended, it was suspended for last year, and again this year, people are still wanting to sort of draw down their IRA account to save… oops, let me go back… to save money on their… to sort of draw their accounts down so that it lowers their taxable estate, So donors over 70-1/2 years old and older can directly give up to $100,000 per year tax-free from their IRA accounts directly, again, to operating charities, not to endow giving vehicles, like private foundations or donor-advised funds. So this helps them to reduce their IRA balance, reduces their taxable income in future years when they're going to be taking their required minimum distribution, and also lowers their taxable estate.
They can also use a charitable deduction if they are thinking about offsetting a tax liability, if they're going to be taking money out of their retirement account. And for people who are over 59-1/3, who take withdrawals from their retirement accounts in 2021, they can use these deductions to sort of offset that. And some donors, and this may happen with the Biden tax proposal, depending on what form it takes as it weaves its way through the legislative process, donors who are thinking about converting their traditional IRAs into Roth IRAs, that's a taxable event, and that may make sense for more donors if they think taxes are going to be going up in the future. Well, if they do that, they will have a taxable event in 2020, and just be aware that they can offset that taxable event, with a charitable… with charitable gifts. And, again, it's another way to talk to your donors about giving to nonprofits that are really in need from a tax perspective.
So as the economy struggles to recover from this pandemic and it… and leaves more Americans and charities than ever in need of assistance, we are also encouraged by some bright spots. We've seen, you know, a lot of the data that Nicole mentioned, as well as what I've shared with you. The… there is sort of… has been a heartwarming outpouring of support from philanthropists, and, hopefully, that will continue. The legislation that President Biden signed into law just in March, the American Rescue Plan Act, is one of the largest economic relief programs in US history. The Paycheck Protection Program has been extended until May 31st, the Employee Retention Tax Credit has been extended until June 30, so make sure that for those of you that are on the line, if your organizations qualify, to make sure to really look into those. And, you know, more optimistically, at least in our country, as vaccines are now fully available, the economy is beginning to open up more, we're going to, also… hopefully, in the next year or so also have a chance to welcome back many of our nonprofit volunteers in person to really begin to engage as they were prior to the pandemic.
So I think I'm missing a slide here, it looks like, so I'm going to just sort of talk a bit about some of the non-tax related considerations. I've been talking quite a bit about the details of how to extract more money from your donors. There are a few things that we are highlighting for our donors as they work through their philanthropic strategy for this year. The first, and Nicole kind of mentioned some of these, as well, in her remarks, is to continue to support those nonprofits that are close to home, and the community foundation COVID-19 funds and local food banks. And to make those… that support that you give to any nonprofit, you know, general in nature, and not give unrestricted funds, make sure you trust the nonprofit, that the nonprofit knows how to best serve the community, and don't restrict the funds. We're really encouraging our donors to do that. We're also encouraging them to think about additional nonprofits they can support, and giving them ideas on some of those nonprofits ,whether they're on the frontlines the pandemic or not. And last, giving more if they can. You know, the people who have been invested in the stock market, and we have a national donor provider, a national donor-advised fund provider, see a lot of them, have seen appreciation in their investments. So we're really encouraging them to devote a portion of their investment appreciation and those assets, give them directly to charity this year, because the need has never been greater.
So before we go to Q&A, I just wanted to quickly walk through some key takeaways from both Nicole and my remarks, and, also, we do have a couple of these… or what Jennifer would have spoken about from the Gates Foundation, if she could have been here. So the first, as I just mentioned, really, this is the year, as last year was also the year, to help your donors maximize the impact of their giving dollars, encouraging them… encourage them to take advantage of this this giving-friendly tax environment, which, hopefully, will continue. There are lots of really important ways that charities are supporting the needs out there, and they should make sure that they're using their appreciated assets, using their bunching strategy, and then using charity to offset any taxes that they may be incurring.
The second, and I think, Nicole mentioned this, but Jennifer would have mentioned it, as well, is that a good recovery strategy is going to require a lot of private, public, and nonprofit collaboration, So for those of you who are representing large donors, consider investing in those partnerships.
Work with your local community foundations. As Nicole mentioned, the need has never been greater and they're doing tremendous work.
Make space for and invest in community members of color, and those and have those lived experiences, those stories are vital.
And then, lastly, and I think we're seeing this in India right now, the pandemic is really shifting to more vulnerable countries. I know the Gates Foundation is very, very active in making sure that the vaccine gets there and that we're really… this is not… you know, once this is under control in the United States, that's not enough. We've got to get vaccines and other critical tools to those poorest countries, so that we can really address this globally.
So, with that, I will stop sharing my screen, and I think turn it back to Michael, who can moderate some Q&A.
Well, Kim, thank you for your key takeaways, and I want to thank both you and Nicole for your presentations. There was a ton of information in there and it spurred a ton of questions from the audience, too. We're going to use our remaining time together… we have about… a little less than 10 minutes to try to answer as many of those questions that were submitted by our audience as possible. So if you haven't already done so, I advise people to please submit your questions in the Q&A, and we'll try to get to them. But let's jump on in.
And, Nicole, I'm going to start off with you.
MICHAEL: You know, we… within the sector, we've all spoken a lot about… and, in fact, there's a person I know, a foundation leader I know we both know, who said that, you know, at the time, about half-a-year ago, when people were talking about ‘Oh, when we get back to normal?' that normal was the problem.
NICOLE: Right. Absolutely…
MICHAEL …So, we got quite a few questions that kind of came around that, is what role can philanthropically play to make sure that the road ahead is different from the one we follow until now and brings the kind of lasting change, the…
NICOLE: Right. Right, and I saw the question and it's a great question, and we have to figure out how to get back to all these… all these questions after the webinar, but the… there's a question related to that about, you know, people were great during the pandemic, general operating support, flexible, and it seems like they went back to business as usual. So as a sector, philanthropy needs to wake up and realize that this… there is no going back, there cannot be going back, that we have to actually be part of the ones pushing for this long, sustained change, like this shift in the power dynamics, the shift in, you know, how… who and what we're funding, what we're expecting from the people we fund versus how do we bring them in the conversation about resources, recognizing we are just one part of the… the pie, if you will, we're just one part of the equation, we are the funding part. The people actually doing the work are the ones that usually have the best solutions, the best ideas, what they're doing is working. And I think it's… I'm hoping that my colleagues in philanthropy recognize that this is not the time to go back to how we all used to operate that, that we need to be much more humble, and much more accessible, and much more willing to share the power. There's this feeling and it's pervasive right now in this country, unfortunately, that if I let you win that means I give up something, that I give up my power. And, again, this is pervasive beyond philanthropy right now, we're talking about all over this country. That is not true, there is… it's not a zero sum game. Me letting you win means we both will be better and the people that we serve will be better. Wo that is the… that is the…I'm just not going to stop talking about that, and I talk about it with my colleagues all the time. So that is how I would respond to that, that we've got to step up, we've got to continue to step up.
MICHAEL: And let me, let me ask a follow up related to that.
MICHAEL: You know we have seen, thankfully, philanthropists focusing energy and resources on racial equity issues, which we know are deep and systemic, and will take time to change.
MICHAEL: But is there a concern that they will lose interest if they don't see change happening fast, or they don't they don't… they feel…
Yeah, I don't know if it's a lose interest because I think this is going to be in our face for a long time. There's a question about our work with Asian American hate, and, you know, stopping AAPI violence. And we're actually working… there's a new foundation that's been launched that we are actually getting behind, and our… yes, we are supporting it, and we have a giving guide on it, we have resources, you know, where donors can give, particularly, here, locally. This isn't going to stop, the issues aren't going to stop. How many more Black folks were murdered by police after the Derek Chauvin verdict? I mean, like so these issues, I think, have reached a point where they're not going away. I don't think it's going to be a matter of losing interest as a matter of fear, or it's… this is hard work, because in order to do… in order to make the commitment you've got to look at yourself, you got to look at how are we all complicit in this, how… what does this mean to me, how I've been acting, what is… you know, what is really happening here and it's uncomfortable. And so I can see people not wanting to do hard work.
So it's not interest more than… you get yet what I mean? It's not that like, ‘Oh, you know, now I'm going to focus on something else.' It is, ‘This is really hard work and I don't know if I have the stomach for it.' It's more…it's… I think that… that may be more of a reason why people want to step away. I don't know how we can and… step away, I don't know because it equity, racial justice, permeates every aspect of our society in this country, every single issue where… look at the environment. Which communities get hardest hit by environmental issues? Communities of color, right? Healthcare, public health, we saw it. In the arts, which groups get less funding in the arts? Those led by leaders of color, those community arts organizations, right? I mean, give me an issue and I'll tell you if there's inequity. It's part and parcel of how funding goes and flows.
So I don't know if I answered you, but as you can tell, I am trying to use my megaphone to just keep people awake on the issue.
MICHAEL: No, and I think that is one of the points, is that this is… this is not a… you know, just an issue of the moment… well, first of all, let's realize, if you think about it, systemic racism is something we've been dealing with, you know, for 400 years, so it's going to take time to…
NICOLE: Yeah, exactly. Actually, 600, when you consider the indigenous folks.
MICHAEL: True. Yes, so thank you for that. I'm going to change tracks completely, and go to Kim with a question that you're probably won't be surprised at because we always have nonprofits asking this question. How can nonprofits better engage with donors who give through DAFs, Kim?
KIM: Yeah, great question. So, first of all, I would just make it easy for donors who have DAFs to give to your organization. So make sure that on all of your solicitation materials on your website that you've got an option for DAF giving, right? Have a checkmark box, make it very clear. You could consider dedicating a web page to information about DAF giving. We're happy to help you got lots of resources to help you figure out what to put up there. You know, you can include information on granting guidelines, maybe a story about one of your donors who gave from their DAF in your newsletter your emails that you send out.
You can also share information and insights about some of the strategies I mentioned, right? People who have DAFs are usually interested in doing things all in one place, right? They want simplicity, they want to do things efficiently, and they also want to do things tax-effectively. So if you can give them that educational information, topics like appreciate assets, bunching, the flexibility that they provide. We have a given guide that we're happy to … it's on our website that you can access, but it really just helps them to sort of think about how they give. And, you know, for those of you who already have staff, and most of you probably do with your staff, most DAF donors have given… most charities have had experience with DAF donors, but just realize that you can acknowledge them in the same way that you do your other donors. You know, put them into your granting software, show that it's a DAF gift. You can acknowledge them. You don't need to acknowledge the DAF sponsor. Don't give them… you don't need to send them a tax receipt. But just cultivate them just as you would any other donor, with the understanding that they are probably even more valuable because they probably have extra money in their DAF. And so, as Nicole mentioned, she knew that her DAF holders had extra money to give and was able to go out to them last March, and, again, last October for that incremental money that she was really looking for. And I think you all can do the same, right? You don't need to worry as much that they don't have additional funds to give.
Thank you for that. I want to try to get through a couple of other questions. I'm going throw them out to both of you.
There's like over a hundred.
MICHAEL: I know.
NICOLE: It tough picking which ones you're…
MICHAEL: I know, it's been a challenge, and I can't imagine how much longer we could have gone had Jennifer actually…
NICOLE: I know. I know.
MICHAEL: So let me ask a quick question for both of you. Obviously, it's been great to see all of this funding support for issues related to the pandemic and racial justice, but what about organizations that are not in that space they're not in food, shelter, housing directly.
MICHAEL: Do… are major organizations really only looking… funding organizations really focusing on those. But are there still spaces for the others or should those other groups just kind of sit on their hands and wait until we're further along?
NICOLE: Yeah. No, and that's one of the things that we did, and you can see from a national perspective. But we… I can speak about our experience. We absolutely… you know, our nonprofit support fund was specifically for beyond social service agencies so… because we knew that they were not getting the spotlight, because people were literally just trying to, you know, feed their families and stay housed. So many organization… many other foundations also realized that it wasn't an either/or again, it was both, right, it's both. And when I when I asked donors to give it was above and beyond what they were already giving, ‘Like don't stop giving you the organizations that you've been supporting. They still need your help and need it now more than ever. And guess what? Your community is suffering, and you need to do to go above and beyond, so that we can… we can really answer the cry.' So I've actually seen donors do both, recognizing that they had to continue and they actually had to step in during this crisis. So my hope is that that does continue.
You know, and even my private foundation colleagues here in this region, they've been doing both, right? They contributed to the aggregated funds that we had around COVID, they kept doing the work that they… and doubled down on the work, and gave larger grants, and gave unrestricted grants. So…
KIM: Yeah, and I would just add, the Schwab Charitable data bears that you. So, actually, very few, smaller than I thought number of grants that went out in 2020 specifically mentioned COVID relief, right? most of them were people realizing, you know, March, and I noticed personally from the boards I sat on, everybody's galas were cancelled, and people stepped up and said, ‘I don't need to eat some rubber chicken to give to you, right? And I don't need to go to the auction to give to you.' And people gave as much or more than they otherwise would, So I think people's first priority, honestly… well, maybe not first, but equal priority to sort of funding some of the urgent needs was to make sure that the nonprofits they cared about we're going to make it last year. And I know that we'll see the data over time as to how many did and didn't, but I do believe that we saw our donors stepping up both generally and then specifically in response to the health and human services category.
MICHAEL: Okay, one… hopefully, one last question, and this probably would have been directed to Jennifer, but she's not with us, so I'm hoping that the two of you might have an answer. You know, connection to local community may be difficult when the issues that organizations are trying to address are not local at all, but are… or not common in the United States. So any thoughts or suggestions for international nonprofits?
NICOLE: Yeah , so, you know, I focus primarily on the local because we are a community foundation, but we are also one of the largest international grant-makers, because when… I sit in Silicon Valley. We work with 60 companies. Almost every company we work with here are global… have a global presence, so a lot of our international giving is actually done with those companies, and they have doubled-down on their international giving. And some of our donors are also, obviously , focused globally. Either they've come from other countries or they have a presence with their companies in other countries.
So that is still happening, and, yeah, and, you know Jennifer would have been able to be much more poetic than I'm being right now, but we do know that… and we saw just with our… the companies that we work with that, they were really concerned.. We recently put out a call to those who do international giving around India, because we see it, and we know it hasn't really hit the African continent yet. That's coming next, right? So we know… we know, this is about to happen. And then the Caribbean, I mean, Caribbean is seeing a spike. So, folks, we have been we have a long way to go in this pandemic, and so there are folks out there and donors and companies that are responding.
KIM: Yeah, and I'd just say, you know, Jennifer were here, she would have stressed, I know, in one of her slides the collaboration they've seen across the board with corporations, with big philanthropists, with small donors around some of these international areas of need related to COVID. And so some of the… you know, going to the Gates Foundation website to sort of see what they're doing and trying to look at some of the larger nonprofits, trying to partner with them to do so, some of the larger philanthropists, giving some of the places they're giving. They have an area that I know we profile on our website, the Gates Foundation Giving List, right? So I think it's all around partnership and realizing, again, that this pandemic is not done until we get under control worldwide. We're seeing what's happening in India, and, as Nicole mentioned, I think, at least the Gates Foundation is very focused on the African continent, as well, and making sure that they are better prepared there than maybe they have been in other underdeveloped countries.
MICHAEL: Well, I I'm so sorry that I have to do this, but, unfortunately, as you both know, we've gone way over our time today. But I want to I… I hope that everyone will agree, this has been a great session, and I want to, once again, thank both of you, Nicole, Kim, for spending time with us today and sharing your insights.
NICOLE: Great thanks for having us, Michael.
KIM: Yeah, thanks for having us, and, hopefully, we are not needing to do this next year on this particular topic.
NICOLE: Yes. Yes.
MICHAEL: Let's, let's, let's all hope so. So for our audience, if you want to dive deeper into this subject, I encourage you to consult the list of resources that Nicole and Kim helped to compile for us. This slide, along with all the other slides. will be available for download, so no need to worry about having copied it all down just now.
Thank you all for joining us, and enjoy the rest of your day.
In this webinar from May 4, 2021, Kim Laughton, President, Schwab Charitable and Nicole Taylor, President & CEO, Silicon Valley Community Foundation joined Michael Gordon Voss, Publisher, Stanford Social Innovation Review to examine how philanthropists have responded to the unprecedented pandemic, what they learned as a result of 12 months of adapting their giving strategies to address mounting and desperate need, and how they can continue to prepare for what's next.
- What lessons have been learned during the first year of the pandemic about supporting the needs of communities, locally, nationally and globally.
- How these lessons can inform an effective approach during the second year of the pandemic.
- What donors at all levels of giving should be aware of as they think of how they can use their financial resources in the most effective way to tackle the long-term impacts of the pandemic.