6 Mistakes Philanthropists Make During a Crisis (and What to Do Instead)
Crises bring massive social, health and economic uncertainties, challenges and hardships. They also unleash unprecedented philanthropic leadership and opportunities for transformational social change. But being an effective philanthropist requires letting go of what I call “delusional altruism”—modes of thinking and behavior that get in the way of achieving goals. During times of uncertainty, these pitfalls can turn into defaults.
Here are six common mistakes wealthy donors often make during a crisis, be it a pandemic or another kind of disaster, and what to do instead.
Mistake #1: Stepping Back
During a crisis, we may want to hunker down and hold back. As a donor, you have resources; any action—especially during a crisis—risks exposure to requests and scrutiny. But letting fear and isolation take over cuts you off from the knowledge, connections and relationships you need to be an effective leader and make a difference.
Reach out. Call the nonprofit leaders you support and find out their concerns and needs. Then, listen and act on what you learn. Collaborate with other donors, foundations and corporations in your community, such as one of the 200+ COVID-19 response funds in the United States. If not one of those, there are many others around the world.
Mistake #2: Deciding to Wait and See
If you wait to see how things shake out, you miss the opportunity to provide the most help. One family foundation’s decision to stay on the sidelines until their September board retreat will cost them six months of payroll. They’re paying staff who are unable to execute because the foundation is sitting on its hands instead of helping people. That’s a luxury none of us can afford.
Instead, Clarify, Prioritize and Implement
The best way donors can navigate and lead through a crisis is to identify what you want to accomplish and the best way to accomplish it. While your mission should remain the same, your strategy can adjust year to year. If you lack a strategy, you can rapidly create one in as little as a day, and by working remotely. If you do have one, reexamine it now. We are living in a new world that’s going to bring tremendous adaptation and change. Once you have clarity on what you are trying to accomplish, determine your top priorities and focus your team on achieving them.
Mistake #3: Stop Building Your Philanthropic Muscle
To have the greatest impact, you need to be the greatest philanthropist you can be. This means building your philanthropic capacity and know-how. It means investing in yourself—your talent, learning, coaching, technology, infrastructure and relationships. But too often, wealthy donors withhold investing in themselves and instead allocate all of their resources to others. While the intent is noble, this scarcity mindset is part of the spell of delusional altruism. When funders start believing that they don’t deserve to strengthen their own talent, knowledge and capacity during a crisis, they diminish the impact they could achieve.
Instead, Invest in Making Yourself Stronger
Embrace an abundance mindset—the belief that investment in yourself is important and the more you put into your philanthropy, and yourself, the greater the return for the causes and communities you care about. This might include taking the time to learn about the impact of the crisis on the most vulnerable members of your community, retaining a trusted advisor to help you navigate your philanthropic giving during turbulent times or investing in technology, board training or strategy development. Put on your own oxygen mask first, and then assist others.
Mistake #4: Wanting to Maintain Control
During this crisis some donors may insist on lengthy grant applications, dictate how nonprofits use a grant or refuse to allow funds to be spent on overhead. These practices hinder grantees, even when there’s no crisis in sight; in the middle of a disaster, they can become downright untenable. What nonprofits really need now is support to address immediate challenges, not struggle with the donor-inflicted drama of inflexible funding.
Instead, Be Responsive and Flexible
Most nonprofits have minimal financial reserves to weather a crisis yet play an outsized role of providing society’s safety net. The most agile philanthropists trust nonprofit leaders to make good decisions—and are rapidly awarding additional grants with minimal or no applications needed, funding general operating support, removing restrictions on existing grants and extending or eliminating deadlines and reporting requirements.
Mistake #5: Diverting All of Your Resources to the Crisis
Sometimes funders get so caught up in responding to the needs of the moment, they overreact by dropping all other priorities. Before you switch your entire grant-making strategy to infectious disease prevention during a pandemic, take a deep breath.
Instead, Be Consistent
While it’s important to adapt to changing circumstances, overreacting makes us lose sight of all the level-headed thinking and decision-making that came before. Let’s say your philanthropy focuses on helping kids get into and graduate from college. Reprioritize or divert some funds to provide immediate relief to those you already serve who are impacted by the crisis, like college-bound youth whose parents lost their jobs during the pandemic.
Mistake #6: Only Respond to Immediate Needs
Short-sightedness peaks during times of stress and uncertainty, to the detriment of planning a long, sustained and effective response. At the same time, while disasters don’t discriminate, recovery does. Those who were struggling prior to disasters like fires, wars, flooding or a pandemic, all have a much steeper and longer road to recovery. When funders just respond to immediate needs, those longer-term and very pressing needs go unmet.
Instead, Take the Long View
There are multiple phases in any disaster: response, recovery, reform and resilience. To support the critical long-haul work that will strengthen systems and communities, make sustained gifts towards rebuilding homes and schools, replacing worn infrastructure and changing policies. Comprehensive long-term planning can help your philanthropy have an impact that lasts for generations to come.
Kris Putnam-Walkerly is a trusted advisor to the world’s leading philanthropists and author of the new book, Delusional Altruism: Why Philanthropists Fail To Achieve Change and What They Can Do To Transform Giving (Wiley, 2020). Learn more at putnam-consulting.com.