Milwaukee, the Virus & Fundraising
By Mark Sabljak
March 12, 2020
The coronavirus is spreading, the stock market is rolling and the presidential election is causing its usual every-four-years nervousness among some.
What does that mean for nonprofits and their fundraising in southeastern Wisconsin?
A quick, casual survey of local funders large and small show that the uncertainty caused by the virus, the market and election is causing some uncertainty among donors as well. Promising anonymity, I asked this question.
Do you anticipate the current stock market crisis....resulting in part from the coronavirus.....impacting your organization's giving for 2020?
The answers came back with variety: which means nonprofits that rely on generous givers need to be professionally vigilant, and understand that while some donors will be following the same past practices, others will be keeping a close eye as they are on key environmental factors.
When asked about the stock market affecting their giving, one funder used a single word, “Yes.”
Another was succinct in the opposite direction: We have no plans to change our giving.
Several funders said their giving is predicated on many months of previous stock market success.
One said: I anticipate that none of these factors will have any effect on our 2020 grantmaking. Our annual grant budget is established on the basis of a rolling average of the previous 20 quarters... If we have more than one catastrophically bad quarter in 2020, I suppose it could have a noticeable effect on our 2021 grant budget.
Another echoed: Thanks for asking and thinking about this important question! As it stands now, we have our 2020 budget in place and will be granting an amount that is comparable to giving in 2019. When we start thinking about the 2021 budget in September, we will see how things have unfolded and this could mean reduced resources available for 2021, but that remains to be seen. We develop our budget based on the last 16 rolling quarters, so the market’s performance this year may affect the amount of money we can grant in 2021.
Another major funder said: Regarding grantmaking, we do not anticipate reducing grantmaking in 2020. We have a balanced portfolio that is designed to weather downturns in the market. Our spending policy uses a 20 quarter rolling average, also designed to smooth the bumps.
Another donor recommended love and patience: I’m not a stocks and bonds guy and those fluctuations don’t change my behavior BUT they do others. However, something wonderful happened when the tax law changed for how and what can be deducted annually for 501C3 contributions. NOTHING! The last time the economy made significant impact on giving was 2008 and then it dropped by less than 6%. Am I an optimist...of course. I have to be. Am I a realist...of course. I need to be. Both of these personality traits are what we need at this time. That and a little more love and a lot more patience.”
And the election?
A donor said, “Since giving is required at a 5% rate, I believe most foundations will be giving at the value of their stock portfolio at the time of their foundation meetings. The major problem today is when will the coronavirus be contained. The elections will have an effect on the market immediately, if Bernie is elected. If Trump or Biden are elected, not much change.”