July, 14 2020, 12:00am EDT
New Campaign to Increase Charitable Giving Launches in Response to COVID Crisis
The Crisis Charitable Commitment challenges foundations and high net worth individuals to give more.
WASHINGTON
The Crisis Charitable Commitment (CCC), a new national effort to encourage major foundations, donor-advised funds, and high net-worth individuals to increase their charitable giving in response to the coronavirus crisis, launched today.
The CCC establishes a benchmark for the wealthiest individuals and philanthropies in responding to the multiple, unprecedented crises currently facing the country. The campaign calls on every foundation in America to increase its payout to at least 10 percent of its endowment over the next two years and high net-worth individuals to commit up to 5 percent of their net worth in support of nonprofit organizations.
Alan Davis, member of Patriot Millionaires and president of the Leonard and Sophie Davis Fund who is helping lead the effort, said,
"Dealing with one crisis is tough enough, but dealing with multiple crises all at once is overwhelming. Business-as-usual is not going to alleviate the suffering that's been caused or provide sufficient support to organizations that are working to ameliorate some of the problems these crises have exposed: challenges to democracy and to a safe and secure election, racial injustice, vast economic inequality, environmental degradation, and a health system that is not up to the task of meeting everyone's needs."
According to the CCC nearly $1 trillion is currently held in private foundations that are required to pay out just 5% of their assets each year. A further $120 billion is held in donor-advised funds (DAFs), which have no payout requirements. If all foundations and DAFS sign on to this commitment, an additional $50 billion would go to charitable causes. An additional $10 trillion is held by ultra-high-net-worth individuals, the 0.1% of U.S. households, comprised of families whose wealth exceeds $25 million. Were those individuals to sign on to the CCC's giving commitment, an additional $150 billion would go to nonprofit organizations. The CCC pledge does not require that funds go to any specific organizations or areas of work; simply that the giving be to a legitimate non-profit [501(c3) or 501(c4)].
"Since March, America's wealthiest individuals have seen an increase of billions of dollars in their net worth. Meanwhile, lines at food banks continue to grow, millions of individuals across the country have lost their health care and tens of millions of small businesses and non-profits are on the verge of folding. We are in an unprecedented crisis point in this country -it is imperative for the wealthiest amongst us to step up to the plate and meet the moment." said Nick Rathod, an advisor to the CCC and former senior official in the Obama White House.
The CCC further notes that a number of foundations and ultra high net worth individuals have begun to announce increases in their giving for this year. A few of the largest foundations, including the W.K. Kellogg Foundation, are increasing their payouts to six, seven, or eight percent. On the other hand, the Wallace Global Fund plans to give out 20 percent this year, and its President, Scott Wallace, is leading an effort to enact the Emergency Charity Stimulus bill, requiring foundations and donor-advised funds to distribute at least 10 percent for three years.
"The elite donor class has enjoyed stock market performance, even accounting for this year's craziness, of 10% or more for as long as anyone can remember," said Davis, "and yet they are hesitant to dig much deeper than usual to respond to the COVID-19 crisis. This needs to change."
Further information:
The Patriotic Millionaires is a group of high-net worth Americans who share a profound concern about the destabilizing level of inequality in America. Our work centers on the two things that matter most in a capitalist democracy: power and money. Our goal is to ensure that the country's political economy is structured to meet the needs of regular Americans, rather than just millionaires. We focus on three "first" principles: a highly progressive tax system, a livable minimum wage, and equal political representation for all citizens.
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