Corporations pledge over $450 million in donations for social justice
The coronavirus pandemic had already prompted an increase in charitable donations before the current national reckoning over systemic racism kicked that number up even further.
By the numbers: An FT analysis has found more than $450 million in corporate pledges made to groups focused on social and racial justice — and that's before the increase in disbursements from the Ford Foundation, the MacArthur Foundation and others.
How it works: Some of America's largest foundations are borrowing money as part of their plans to increase their annual payouts. The Ford Foundation, for instance, will issue $1 billion in 30- and 50-year "social bonds" and spend that money over the next two years.
- The idea is to maximize the proportion of the existing $13.7 billion endowment that remains invested in the market rather than given to the needy.
What they're saying: A long list of high-profile philanthropists has called on Congress to mandate a 10% payout from foundations and donor-advised funds.
- "Increased funding could be immediately absorbed by food banks, health care providers, educational institutions, and organizations addressing issues like poverty alleviation, economic development, safe and secure voting, and social justice," they write.
- The proposal seems unlikely to go anywhere, and is opposed by substantially all of the foundations and funds that it would affect. As the social bond issues show, maintaining or increasing the size of a charitable foundation in perpetuity seems always to be the highest priority.
My thought bubble: We're at an unprecedented time in terms of demand for charitable services. Philanthropic foundations need to give away only 5% of their assets each year, and donor-advised funds — which are also tax-exempt — need to give away nothing at all. Now would be a great time to force a large rise in payouts.