2020 Philanthropy Industry Outlook

For Regional Non-Profits, Huge Need Emerges from Pandemic Fallout

By Dennis Boone

A world in turmoil. A major recovery. But an uneven application of that reprieve. That may be the most positive spin one could put on the events of 2020, which have assaulted the entire planet, the nation and the KC area in different ways. But there’s no question that the unprecedented loss of income—more than 40 million Americans displaced from their jobs in the spring within weeks—created unprece-
dented need for non-profit, charitable, religious institutions to address, even after applications of trillions in public dollars in assistance. One never wishes to be in desperate straits, but if there is a city where you’d want to live when the bottom falls out of your world, Kansas City might very well be it. For decades, it has been recognized as being among the most philanthropic communities in the nation. One way to confirm that is by looking at the biggest foundation here: The Greater Kansas City Community Foundation, with more than $3.7 billion in assets, is the fourth-largest of its kind. In the nation. It is outpaced only by peer institutions in Silicon Valley and New York, and, somewhat incongruously, by Tulsa’s. Perhaps Royals lead owner John Sherman said it best: “There is something in the water here. Role models with the last names of Hall, Bloch, Stowers, Helzberg, Dunn, Sosland, Sunderland, Berkley, Kemper, Patterson, Illig and many others have all changed the face of our region. Wherever you drive, you’re reminded of what they each did for neighborhoods throughout our city. Their impact is evident, and it lives on. It raises the bar for all of us.” “It’s part of the culture of Kansas City that we fight above our weight class,” Sherman says. “It has struck me so many times. We’ve been the 29th- or 30th-largest metro area, but we consistently raise and distribute money like we’re in the Top Ten.” 

If there is a city where you’d want to live when the bottom falls out of your world, Kansas City might very well be it.

The Kansas City Spirit

Much has changed in recent years in Kansas City, with the loss of iconic brands like Sprint and a number of M&A deals that relocated significant companies’ headquarters out of Kansas City. Then there has been political division, social unrest, and economic upheaval through the pandemic. Has Kansas City’s reputation as a philanthropic community endured?

No question, says Janet Baker, executive director of Shepherd’s Center Central. “We support each other in Kansas City, and after living in Portland, Oregon, for the past eight years (before returning), I have learned not to take that for granted. Kansas City is the most collaborative and supportive philanthropic and volunteer community anywhere.”

This area’s reputation as a highly philanthropic community is definitely intact, says Mary Esselman, president and CEO of Operation Breakthrough. “Look no further than the response and recovery fund that was quickly assembled after the start of the pandemic in March,” she said. “For many agencies, it has made the difference between closing and continuing to provide essential services.”

At Harvesters-The Community Food Network, CEO Valerie Nicholson-Watson offered and emphatic “YES!” to the question. “When it became apparent in March that many more families, children and seniors were at risk of food insecurity, the community stepped up to support Harvest-ers work in a big way,” she said.

There is a reason, declared Major David Harvey of The Salvation Army, why Kansas City has such a robust non-profit industry. “People here are always willing to support a cause they believe in, especially when it is an organization,” Harvey said. “They see doing good work with their donations.”

At the Rose Brooks Center, CEO Susan Miller took a slightly more cautious line. “For the time being, yes,” the region’s level of giving is holding up. “We are taking great care to continue to steward to our existing donors, grow our donor database, and research grants to maintain and grow funding for our organization to  further our mission.”  

Support from local community leaders and local foundations appears to have increased, said Kim Carroll, CEO at Heart to Heart International. “We benefited from organizations that normally only give for capital expenditures (i.e., Sunderland) shifting to also give for operating needs. We saw the Hall and Sunderland foundations initiate the Greater KC COVID-19 response and recovery fund as just a few examples.”

Overall, said City Union Mission CEO Terry Megli, Kansas City remains “an incredibly generous community. As we approach our 100th anniversary serving Kansas City, we count it a privilege to minister to the needs of hurting and hungry folks of our great city.”

Katrina Scott of Mariner Wealth Advisors said that in her additional role overseeing the Mariner Foundation, “I get to see needs and great organizations trying to help meet those needs all across the country as well as here in Kansas City. I continue to be amazed at the stories of non-profits that started by helping one person or some small group of people that has now turned into a sizeable charity helping many children and families.”

Count MaryAnne Metheny of Hope House among those who believe the giving spirit remains strong here. “Those who are able to give are giving,” she said.  “It has been very helpful that donors who typically have restrictions or specific designations for their gifts/grants, have relinquished most of those in order to adjust to COVID challenges, and have allowed us to use the donations where it is needed most.”

Those donors, she said, also understood that service delivery and services provided may not look the same as in the past because of COVID restrictions, and that numbers served may be different, as well.

“Kansas City’s reputation as a philanthropic community is solid and stronger than ever before,” declares Qiana Thomason, CEO of the Health Forward Foundation. “The COVID-19 pandemic has elucidated the critical role of philanthropy in our region—in both foundations and corporate philanthropy.” Support through various collaborations, she said, “has helped our social-sector safety net partners continue to serve those most in need during this difficult time.” 

Reasons to Give

The motivations for such giving are as unique as the number of causes.

Rob Reiman, founder of The Giving Grove, said that “while I’m humbled by the notion that we may impact many neighborhoods and many families, my real joy comes from building a relationship with an individual person.” Those who join his effort to plant and maintain small urban orchards, he said, “are the true heroes in this story, and I cherish being connected to them. They give me hope. They inspire me. They have become my extended family.”

Lew Wiens of True North Hotel Group said the corporate component can’t be overlooked. “When you put your company and value systems together and how you want to have your culture in your company,” he said, “if you don’t bring in that benevolent feeling and do the giveback, you’re not getting a full value system set up for your company.”

Under Blue KC CEO Erin Stucky, the region’s largest health insurer grounds its giving in a commitment to improve the health and wellness of individuals and families, officials say. Charitable contributions are a key part of that. But in addition to financial and other support for health and wellness, the company funds social services, education, arts, culture and civic endeavors.

CommunityAmerica’s CEO, Lisa Ginter, takes pride in the impact made by the region’s largest credit union: more than 5,130 hours of volunteer time for 160 organizations and more than $1 million donated to charities in 2019. “We love supporting the causes doing important work in our backyard,” she says. “Our community is only as good as our investment into it.”

Lockton’s Joe Agnello, president of the Founders Series consultancy, also addressed the power of focused giving: “Every decision we make at Lockton revolves around our three pillars: our clients, our associates and our communities,” he said. “These pillars inform our actions not only in our business, but in the non-profits we choose to support. Simply put, we care deeply about the causes that are important to our associates and our clients.”

A similar focus at Polsinelli PC, the largest law firm based in Kansas City, turns its biggest assets loose on some of the thorniest community challenges. “Our lawyers are focused on addressing ways in which the firm can leverage our national footprint to create a larger impact in several areas,” say co-managing partners Mary Jane Judy and Greg Kratofil. Among them: civil rights, immigration/asylum, housing/urban revitalization and economic development, corporate governance and non-profits and families/children and veterans issues.

At health-care software specialist WellSky, CEO Bill Miller said that “we view giving back as an ongoing responsibility that we all have. It’s something we know we must do to ensure the long-term health of our communities.” That’s especially true during a challenging year like 2020, he said.

2020: Damage Report

So how badly have area non-profits been hit by the multiple calamities related to the pandemic year? Perhaps not as hard as one might think from reading the daily headlines.

There’s no question, Harvesters’ Joanna Sebelien said, that non-profit business models have suffered, including her own. Shortages of aluminum, for example, mean fewer donations of canned goods. Food prices are up; food drives are fewer in number in the era of social distancing and canceled events. “The scope of what we’re trying to do and the need we’re trying to meet is like nothing we’ve ever seen,” she said. “Charity cannot do it alone. The government nutrition programs, including both government commodities and the supplemental nutrition assistance program, are of major importance to meet the nutrition needs in our communities.”

Nonetheless, the community response, said Mary Esselman, has been “incredible.” The generosity of the funding community and individuals across the metro, she said, “has also allowed us to provide over 200,000 pounds of food, diapers, and toiletries, case management, housing and utility assistance and critical behavioral-health services to both parents and their children.”

Donors, said Major David Harvey, “understand the commitment to The Salvation Army is to help people in a moment of crisis, and there are few bigger than a global pandemic.” By and large, he said, the Army has been extremely fortunate. “We had donors of every stripe stepping forward to lend their support to our cause from March onward. Whether single, one-time donations or large grants awarded by established foundations, we received a great deal of help we were then able to provide to people who came to us for assistance.”

That’s not to say everything has been smooth sailing, and he said it’s important that “we do not drain their current financial ability to assist us now and eliminate their ability to help again in the future.”

Heart to Heart, said Kim Carroll, is stronger with it’s operational funding, but “we did have to put our capital campaign on hold. Only time will tell if that causes harm.”

Because Rose Brooks operates a shelter, it was able to apply for additional funds to cover unbudgeted costs, said CEO Susan Miller. “Otherwise, we would have had to dip further into board-restricted funds.  Our solid financial preparation allowed us to make immediate, preliminary decisions to safely provide services that were later replaced with grant funding.”  

The need for assistance, noted Mike Kanaley of Global Prairie, does extend beyond the non-profit world with organizations that are equally deserving of citizen engagement. “The public schools, teachers and administrators throughout the region need the support of parents, businesses, government and community at large,” Kanaley said. “They are the true engine that will drive the ultimate success of Kansas City and the rest of the country and without additional support, they cannot be effective.”

Dennis Curtin, the Re/Max realty executive who founded Mimi’s Pantry, has seen first-hand the types of emerging needs caused by the pandemic. “I have become personally very involved in the Friendship Inn,” he said of the home-away-from home for families of patients at the University of Kansas Health System, many of them admitted because of COVID-19 complications.

“There is such a huge need to help families be close by when a loved one is being treated at the hospital,” Curtin said. “Many times, these extended families have no other means or resources available to house everyone while their loved ones are going through a medical procedure or in a rehabilitation stage of their recovery. We are now in the planning stage of creating more Friendship Inn facilities nearby.”

Bright Spots

Not everything about 2020 has been a curse, executives say.

“The bright side to the challenges we face,” says Qiana Thomason, “is that there is now a heightened focus on health disparities and economic and racial injustices. I am seeing and forecasting a trend in philanth-ropy to return to its roots—a focus on the root cause factors of social ills.” While philanthropy is uniquely positioned to lead that change, she says, “we cannot do this alone. We ask other organizations and businesses to join us in developing equitable, asset-building opportunities that improve health and economic well-being with and in our communities.”

Another helpful development: new ways of connecting. “The normalization of virtual meetings has enabled me (and our development team) to have more time with partners and donors,” said Kim Carroll. “Less travel is not bad. Our board is also more effective virtually. Everyone is on even footing and doesn’t have to travel for meetings.”

“There are plenty of bright spots,” said Mary Esselman. “I think the fact that everyone is affected by the pandemic has made donors even more empathetic with our families. They call more often to ask how the children and parents are doing and how they can help.” Like Carroll, Esselman appreciates the embrace of video conferencing. Because of it, “we are getting more invitations to speak at corporate and community meetings,” Esselman said. “And we get a good turnout from our donors when we put on bimonthly Zoom updates. Because they are at home, some people have more time to engage with us and are eager for connection.” 

Joanna Sebelien said “the generous giving in our community is both humbling and inspiring on every level” at Harvesters. “Every gift we’ve received has been so im-portant. Early on in the pandemic, several Chiefs players committed to supporting Harvesters and had a friendly competition on social media. Our staff, many who are huge Chiefs fans, said they felt like the Chiefs and the community were rooting for them instead of the other way around.” Major David Harvey said that at The Salvation Army, “every day our team gathers together is a bright spot. We have lifted each other up. We have cheered each other’s successes. And, we have comforted people in moments of tragedy. Our work is essential in keeping The Salvation Army operating and there have been scant few days off for our development team, just as there have been few breaks for our officers and social services team.”

Susan Miller said one bright spot initially came with increased donations for Rose Brooks. But, she said, “these leveled out in the late summer.” Still, she said,end-of-year giving initial results appear to be positive year-over-year.”

On the financial side, said Meara Welch Browne’s Julie Welch, there is some relief coming to individuals and corporations. For taxpayers, an individual can contribute cash of up to $300 to a public charity, and even if they do not itemize deductions, they can get a tax deduction. They can also deduct up to 100 percent of contributions of cash to a public charity, up from 60 percent, though the increased limit does not apply to donations of appreciated stock. Corporations, she said, can deduct up to 25 percent of their taxable income (up from 10 percent) for contributions of cash to a public charity.

A Look Ahead

Through the late fall, the global pandemic has been particularly tough on the Midwest, including the highest case counts Kansas City has seen since it all started in March. With new rounds of state and local restrictions on business activities, non-profits are concerned about increased need from higher unemployment, fund-raising challenges with individual donors, and the impact on corporate philanthropy.

“As we look to the first quarter of 2021, we believe the need will continue to grow,” said Valerie Nicholson-Watson. “Past experience also tells us that the national and local economies recover much faster than individual families or households.” The  most effective way to help most non-profits, executives say, is to donate money.

“As some of the increased costs will extend past the immediate COVID specific funding, we are continuing to maximize our individual donor growth, adopt new and innovative ways for individual giving (virtual events, text to give, etc) and continue pursuing grant opportunities as we have the staff resources to do” at Rose Brooks, said Susan Miller.   

Qiana Thomason said 2021 will be a year of moving upstream for Health Forward, with a focus on initiatives that address what she calls “the nexus of health, economic well-being, and race equity. We cannot achieve quality health without health equity. And we cannot attain health equity without centering race equity—the condition in which one’s racial identity has absolutely no influence on their ability to thrive.” She expects the foundation will see its grant-making evolve, its partnerships diversify, and its advocacy footprint broaden.

Heart to Heart’s Kim Carroll said the international relief organization has a vision in place: “We are going to execute a growth strategy in 2021 with more emphasis on KC Metro programming,” she said.

As part of the coping strategy at City Union Mission, Terry Megli said, “We are looking very seriously at our Google analytics and how we process information through our Web site. We believe much more giving will be done through our online portals in the future.”

The Salvation Army, said Major David Harvey, is working diligently to cultivate new donors and returned lapsed donors to the rolls. “Sometimes, all people know about The Salvation Army are our Red Kettles, so we have used our work during the pandemic to demonstrate our year-round commitment to families and adults in need in every community in the metro area,” he said.

Emerging Trends

One of the biggest challenges facing the larger non-profits is how to compensate for the cancellation of annual galas and other key fund-raisers in the age of social distancing.

“For decades, the annual dinner and auction has been a staple of fund-raising for non-profits all across the spectrum,” said Mary Esselman. “I don’t think fund-raisers will go entirely back to the old model. The desire to participate without being physically present at events may be here to stay. We had to pivot from a hotel ballroom to a drive-in theater this year for Operation Breakthrough’s annual fund-raiser, with an auction that was totally virtual.”

The flip side of the challenge: If folks don’t need to dress up and find a baby-sitter, it may be easier to give. In addition to concerns about food availability, said Valerie Nicholson-Watson, there may be a challenge ahead with volunteer availability if people are reluctant to venture outside their homes. “Another concern is winter weather and its effect on our food distribution network model,” she said. “We believe some traditional methods for raising funds, such as non-profit special events, will change, and we are keeping a close eye on this.”

That, suggested Susan Miller, could have an unintended positive consequence. Virtual platforms for events, she said, are particularly attractive in Kansas City, “where the event calendar is flooded, and people tire of another charity dinner. Additionally, creation of a more meaningful monthly giving program is on our radar for 2021.”

The trendline in giving has turned sharply to digital this year, said Major David Harvey, at least for the Army. “Whether via Facebook fundraisers, Venmo donations, or just clicking a round-up during an online purchase; the more opportunities you can put in front of people that fit in with their ‘connected’ lives, the more you make donating a natural extension of everything else they’re doing via their smartphone, tablet, or computer.”

Donors, said Mary Esselman, “are always eager to see their impact, but that’s going to be especially true the longer they go without being able to volunteer hands-on and conduct site visits. We hear a lot of supporters say how much they miss being here and seeing the children. When it becomes safe for supporters to visit our building again, we plan to offer plenty of opportunities for them to tour, tutor children, hold babies, meet our families—really make those human connections that we’ve all been missing.”

Through all the changes of 2020, donors and volunteers have had ample opportunity to reflect on how and why they give. It can be, executives say, a good time to reassess one’s impact. The quest to be effective challenges residents, wealthy or not, in different ways. That’s why Janet Baker, executive director of Shepherd’s Center Central, urges people to understand their own limitations and tailor their engagement to fit their passions.

For example, she said, “Kansas City is rich in art and culture,” but not everyone is as motivated to get behind non-profits in that area as they might be with a social-services mission. Knowing where you fit in allows you to make a measurable difference, she said.

“At this point, my experience and values dictate that I work at the systemic level as much as possible to move the needle on equity for Kansas City’s vulnerable populations. We have tremendous leaders in other areas,” Baker said. “If I can financially support their work in areas that are not my strong suit, I’d like to do that.”

Wealth on the Move

Wealth management firms are already raising the alerts over the looming transfer of assets to Generation X and Millennials from the Baby Boom generation, a staggering $30 trillion—yes, that’s with a “T”—that will have a profound impact on donations set up through estate planning. In addition, non-profits are mining the potential of new donors in the younger generations, with some success.

The next great wealth transfer, from the Baby Boomers, is on the horizon.A great deal is riding on that outcome for philanthropy in general, and for exec-utives now positioning their organizations to capitalize on it.

Joanna Sebelien is hopeful about that pending transfer, even though signs of it have to determine the full contours. “We are fortunate to have many donors who have told us they have included Harvesters in their estate planning,” she said.

Mary Esselman says Operation Break-through has seen among the younger donor class “an increasing desire to be directly involved in the solution to create opportunities to mitigate the challenges our families face, coupled with a desire for hands-on involvement in how funds are dispersed. We will continue our focus on creating awareness and showcasing how the opportunities that philanthropic support has provided increases resilience, performance outcomes, and sustainability for the clients we serve.”

Major David Harvey said The Salvation Army was deriving good results from the ability of donors today to more readily see the impact of their gifts. “We want to make sure they have an opportunity to see the good they are doing in their community. So, we make sure we provide donors with the option to not just wait until their wills bequeath us with a gift, but rather we utilize their donation today for the tangible benefit of people in need.”

In that way, the Army hopes current donors will instill a love of philanthropy in the next generation. “Today’s six-year-old dropping a dollar bill in a Red Kettle is tomorrow’s philanthropic leader who is looking to continue and deepen their relationship with The Salvation Army,” Harvey said.