Give5 pledge sets the bar far too low for Canadian philanthropy’s response to this crisis
Why It Matters
The Give5 campaign, which asks Canadian foundations to bump their disbursements from 3.5 percent to 5 percent in response to the COVID-19 crisis, has the potential to unlock $700 million for Canadian charities. But what about the other 95 percent of foundations’ endowments?
Five percent just isn’t enough.
On Giving Tuesday, in light of the COVID-19 pandemic, Canadian foundations were invited to sign the Give5 pledge, a commitment to donate at least 5 percent of their net assets to charity before the end of the fiscal year.
The Give5 campaign was developed by several Canadian philanthropic leaders, who call on their peers to recognize that the COVID-19 pandemic is a once-in-a-century crisis, requiring a once-in-a-century disbursement.
Many of the 50+ foundations that signed the pledge have published press releases celebrating the announcement. But does this proposed increase really represent the “once-in-a-century” effort that’s required by our current moment?
What goes unnamed amidst this celebration is that the pledge requires foundations to increase their giving by a miniscule 1.5 percent above the annual legal minimum. For example, a foundation with $100M in assets might distribute $5M as a result of this pledge, rather than their standard $3.5M — leaving a whopping $95M in the bank untouched. Further, 5 percent actually was the legal minimum for many years, but it has been steadily lowered since 1984.
In the midst of the greatest economic crisis since the Great Depression, Canadian foundations seem to have the mentality that they need to save their wealth for a rainy day.
If they don’t think it’s raining, they haven’t stepped outside.
Both inside and outside the philanthropic sector, we often hesitate to question the choices of foundations, because we perceive their giving as an act of pure generosity. But, as one of the Give5 campaign coordinators has pointed out, this is only half the story: the wealthy people who endow foundations receive huge tax breaks for these gifts. This means that about half of foundation assets were diverted from public coffers. As such, it is more accurate to understand philanthropic wealth as is public money in private hands. These funds are being kept idle, while our government commits to running a deficit greater than 10 percent of GDP in order to address this crisis.
This is not just a question of generosity. It’s a question of public policy and private power that deserves the scrutiny of everyone in this country.
Canadian foundations control a staggering $84.4 billion in net assets, and this wealth has been growing considerably over the past ten years. In 2009, Canadian foundations controlled ‘just’ $36.4 billion. Today, they’ve nearly tripled that total.
Though economic growth will be down this year, over the long term, many foundations average greater than 5 percent interest on their endowments. Thus, even increasing giving to 5 percent of assets ultimately reinforces the trend of foundations accumulating more wealth than they redistribute.
The Give5 campaign has, thus far, missed the opportunity to name and celebrate what a truly once-in-a-century crisis response can and should look like. If the pledge truly aims for foundations to give at least 5 percent of assets, that number needs to be presented as a starting point rather than a finish line.
Beyond celebrating this small first step towards an adequate crisis response, we need to lift up examples of just how much farther we can go. In the US, the Libra Foundation and Skoll Foundation have respectively doubled and quadrupled their 2020 grantmaking in recognition of the extraordinary needs of this moment. Here in Canada, the Sprott Foundation and the Trottier Family Foundation have both announced 2020 granting plans well above 10 percent of their endowments.
Moreover, there is a growing trend amongst foundations who are ‘spending down’ their endowments by redistributing all of their assets by a specific date. For example, the Chorus Foundation intends to spend down by 2024 based on their belief that “the climate crisis is simply too urgent for us to do otherwise.” This trend is in stark contrast to the norm within Canadian philanthropy, where the vast majority of foundations still exist in perpetuity with endlessly growing endowments.
Fortunately, these examples and others are being gathered and highlighted by The Circle on Philanthropy and Aboriginal Peoples through a complementary campaign, #Other95. In this parallel initiative launching on May 11, the Circle is inviting community members to publicly share their vision for what should be done with the “other 95 percent” percent of foundation wealth.
As more of these stories are shared, the Give5 campaign has a chance to spark a deeper conversation around what philanthropy’s response to this once-in-a-century crisis should really look like. Celebrating foundations that “Give 5” without encouraging them to go further risks creating complacency, at a time when truly bold action has never been more needed.
In a historical moment defined by crises like climate change and inequality — challenges that will remain with us after this pandemic has passed — those of us with great privilege have a specific role to play.
Beyond Giving 5, to uphold our responsibility in helping to address the pandemic crisis, we must push one another to go all in.
Jonathan McPhedran Waitzer and Bronwyn Oatley are founding members of Resource Movement, a group that mobilizes young people with wealth towards the equitable redistribution of land, wealth, and power. The views expressed in this article are their own.
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