Civil rights groups receive surge in corporate donations

A protester holds a flag with the names of victims of violence during a demonstration June 4 in downtown Los Angeles.

By Andrew Edgecliffe-Johnson and Courtney Weaver

Financial Times

June 7, 2020 3:02 PM PT

U.S. civil rights groups have received a surge of corporate donations since Minneapolis police killed George Floyd, transforming the fortunes of some of the organizations hit hardest by the COVID-19 crisis.

A Financial Times review of statements from U.S. companies found more than $450 million in pledges to groups focused on social and racial justice, which typically depend more on individual donations, often from people in disadvantaged communities.

Walmart and its foundation promised to put $100 million into a new racial equity center; Warner Music and Sony Music announced $100-million funds with few details attached; and Nike pledged $40 million to various organizations.

Amazon, Facebook, Google and Spotify announced donations of $10 million or more, with Apple giving undisclosed amounts to groups including the Equal Justice Initiative. Goldman Sachs, Target, United Health and Verizon’s foundation each gave $10 million.

Jacob Harold, executive vice president of Candid, which studies nonprofits and foundations, said the group had tracked $232 million in donations to racial equity organizations since Floyd’s death — almost as much as they receive in a typical year.

The influx has come as the COVID-19 pandemic has plunged charities into crisis. After a decade of growth, many have seen donations collapse, their investments shaken and demand for their services soar. Half have only enough cash to sustain them for less than six months, Harold said.

The Center for Effective Philanthropy, or CEP, will report on Monday that 80% of nonprofits have tapped or expect to tap their reserves, and those working on racial equality have been particularly affected.

“This comes at a time when so many nonprofits, especially those working with marginalized and vulnerable communities, including communities of color, are absolutely reeling,” said Phil Buchanan, CEP president.

“In the business world, revenues go up and down as demand goes up and down, but if you’re a frontline nonprofit working with a vulnerable population, your demand increases in this crisis as your revenue decreases,” he noted.

Rick Cohen, chief operating officer of the National Council of Nonprofits, said charitable groups have been “hit from all angles,” with fundraisers cancelled and gifts drying up as unemployment leapt. Organizations focused on civil rights, racial equality and bail bonds are seeing “astronomical demand,” he added.

Beyond larger civil rights organizations, such as Black Lives Matter and the NAACP, the giving has filtered down to smaller groups, which said they had seen a huge spike in online donations, as well as offers of corporate money and partnerships.

The Black Voters Matter Fund raised more than $200,000 in a week, raking in roughly 500 times its typical number of daily contributions.

“We’re still wrapping our heads around it,” said Alexis Buchanan, the group’s development manager.

The Advancement Project said celebrities’ tweets had helped it raise $520,000 from 50,000 online donors — more than 10 times its entire 2020 digital fundraising goal.

“As a racial justice organization that’s led by a black woman, we don’t typically have the same access to philanthropy,” said Andi Ryder, its managing director of development.

Alexis Buchanan said Black Voters Matter is not afraid to turn down checks.

“We are very discerning with who we want to partner with,” she said. “You will find in this kind of crisis you do have corporations who want to jump on the bandwagon” or are “looking for a photo op.”

There is “reason for healthy skepticism” about companies’ motives, CEP’s Buchanan said: “Often there’s a significant public relations angle to what is being committed.”

Nonprofits’ need to align with companies committed to their missions has prompted some to stick with established partners.

“It’s much harder for us to engage with a company that we’ve only heard from today,” said David Johns, executive director of the National Black Justice Coalition, which has worked with Sephora and Walmart.

The National Coalition on Black Civic Participation received a grant of more than $1 million from Verizon — a company that has spoken out on criminal justice issues in the past — and is in talks with three or four others, said Melanie Campbell, its president and chief executive. Companies need to provide “practical day-to-day support to families to get through these crises we’re in,” she said.

A Morning Consult poll last week found strong public backing for companies donating to social justice causes, but while there was a net 36% support among black adults, the net approval among white adults was half that level.

The recipients of such funds run risks, according to Cohen of the National Council of Nonprofits. He said windfalls could both enhance an organization’s capacity and increase pressure on it to spend the money quickly rather than pace its spending for a long fight against entrenched challenges.

U.S. companies’ philanthropic response to public uproar over racist policing still pales in comparison with the $11 billion they have committed to the COVID-19 crisis, Candid’s Harold said, and chief executives are being told that more will be expected than donations alone.

Darren Walker, president of the Ford Foundation, told CNBC that just writing checks “is not going to work this time, because more is going to be demanded of corporations,” noting rising pressure for chief executives to support tangible policy changes.

Doug McMillon, president and chief executive of Walmart and chairman of the Business Roundtable lobbying group in Washington, said companies should look for “leverage points” where they could shape policy.

“Charitable giving is important,” he told CNBC, “but that’s not enough, and this conversation’s got to be longer-term and more lasting.”