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How Philanthropists Are Helping During the Crisis

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The coronavirus pandemic is a test of how philanthropists can use their wealth to fill an enormous gap in revenue for nonprofit groups.

There is an immediate need to fund nonprofit organizations that support people in health or economic distress because of the outbreak. But these groups are asking for money from the same people who have seen their investments yo-yo up and down over the past few weeks.

Few of these nonprofit groups have reserve funds to sustain them through a long period of uncertainty. To spur giving, the stimulus bill that President Trump signed on Friday increases the deductibility of cash gifts to 100 percent of someone’s income.

In this difficult time, I asked more than a dozen philanthropists, who have billions of dollars at their disposal and included Microsoft founders, tech and financial services entrepreneurs, and one former New York mayor, what they were doing differently. Their responses could serve as a guide for similar philanthropists, as well as inspire smaller donors who want to know the quickest ways to ensure their dollars have the biggest impact.

Here are six strategies for making the most of your giving.

Bad experiences have taught us to be wary of scammers. That has a knock-on effect for people wanting to give quickly but unsure of the organizations receiving the money.

In Seattle and New York, two centers of the coronavirus outbreak, community foundations have established funds that are acting as clearinghouses to distribute donations to charities that have been vetted and are poised to have the biggest impact.

Beth McCaw, a Seattle philanthropist, said she and her husband, Yahn Bernier, had given to the Seattle Foundation because it had “created this blueprint for government, philanthropists and corporations, and shared that blueprint and template with other communities.”

New York has done the same, creating a fund through the New York Community Trust that totals more than $75 million. The billionaire Michael R. Bloomberg, a former mayor and former Democratic presidential candidate, said he backed the fund because it was set up to give grants and interest-free loans to social-service agencies that were striving to do more.

Another reason to use these funds is that they have the experience and knowledge to mobilize quickly in a crisis.

“The difference here is the crisis has been both slow moving and touching the entire footprint of the United States,” said Rob Hansen, founder and president of Goodnation, which measures the impact of donations. “This is a health care crisis for sure, but the right lens to look at this is as a disaster.”

Money is rushing into coronavirus-related charities, but most other nonprofit groups are lacking in funds, too. Most have canceled their spring fund-raising galas, which can account for a significant part of their annual budgets.

Following your normal giving patterns is essential to keeping alive a part of the economy where only the largest entities have reserves for a crisis like this.

Duncan Campbell, who started Friends of the Children 27 years ago, said he and his wife, Cindy, had sent checks to the organizations that they typically supported at this time of year. But Mrs. Campbell said she was concerned about the “paddle raise” — the part of a gala where people are asked to contribute spontaneously. Most of the $2.3 million that the group’s chapter in Portland, Ore., collected last year was from the paddle raise.

Audrey Gruss, a New York philanthropist whose main focus is helping people with depression, added an at-home service through her Hope for Depression foundation. She also gave $30 million to set up a fund to look for new treatments for depression.

“There is a social anxiety that people feel in a disaster,” Mrs. Gruss said. “Our entire society is feeling it now, particularly for older people and people with pre-existing dispositions for depression and anxiety.”

Advisers are counseling their clients to be generous in the broadest sense.

“I’m never telling people they should give to religious projects over animal welfare projects,” said Alana Petraske, a partner on the charities and philanthropy team at the law firm WithersWorldwide. “I’d still never tell people to give to animals over religion. I just say, ‘It’s the time to give’. You don’t want to look back on this situation and say, ‘I had some means of influence, and I didn’t take it.’”

The shortage of testing kits is likely to get more difficult as the virus spreads. When the University of Washington Medical Center was designated a testing center, it lacked the money to perform the testing because government funds had not arrived yet.

Connie Ballmer, a co-founder of the Ballmer Group and the wife of Steven A. Ballmer, the former chief executive of Microsoft, said this was an area where the foundation could help, in giving an eight-figure gift immediately.

“It’s a bridge function until the public money can get there,” she said. “These programs are so enormous that public money has to get there.”

Some of the largest gifts are made over several years. Now is the time to accelerate those gifts. Ms. McCaw said she and her husband had paid out the rest of a six-figure gift to the Y.W.C.A., recognizing that the organization needed the money now.

Donor-advised funds have seen their assets swell. The money sitting in these funds is earmarked irrevocably for charity — and it has already been claimed as a tax deduction. But it’s up to the donors to recommend when those grants are made.

“Go ahead and start paying those out,” said Carla Wigen, managing director of fiduciary strategy at Laird Norton Wealth Management, which is based in Seattle. “Don’t let the money sit there now.”

Emptying those funds is an immediate, easy way to create a lot of change. And donors seem to being doing just that: Schwab Charitable said its clients had increased giving from their funds 31 percent from mid-February until Thursday, compared with the same time last year, with some 3,400 grants going to coronavirus-related charities.

This is no time for charities to be putting funding reports together or sticking to guidelines. Ms. Ballmer said that when grantees asked to redirect funds to other areas, she immediately agreed. “Our mantra is to be flexible,” she said.

Long-term goals do not change, but adaptability is important, said Jeff Raikes, a former senior Microsoft executive and the founder of the Raikes Foundation, which focuses on education and youth homelessness. He said the foundation was loosening or eliminating restrictions on grants and looking at making new unrestricted grants.

“The key thing is to send a message to all of our partners and those communities that are the least well heard,” he said.

Not all philanthropists are comfortable talking openly about using the influence their wealth buys them to reach politicians. But Ms. McCaw said this was the time for philanthropists to stop being coy about their clout and use it to advance the social good.

“I used to avoid all the campaign calls, but now I’m talking to them,” she said. “My money has given me access to them, and I’m using that to make them aware of what needs to be done.”

Nicolas Berggruen, a Los Angeles philanthropist, has doubled the money he gives to his Berggruen Institute, which focuses on long-term issues like governance, capitalism, geopolitics and the future of the human race. But in the short term, he said, he is reaching out to government officials in California and China, where the institute has offices.

“If you have a voice, you try to get some messages out in a powerful way,” he said. “We’re doing it, but there’s a limited amount we can do. The crisis is more systemic.”

Even Mr. Bloomberg, who wields enormous political clout as a former mayor and political donor, said he was focusing his philanthropic effort on working directly with mayors around the country to find the best ways to deploy the money.

But in the end, governments need to step up, he added.

“Philanthropy can’t replace the efforts of national governments on a challenge as massive as the coronavirus pandemic,” he said. “But it can support and augment those efforts, and help fill in gaps, and that’s what we’re doing.”

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