Well, This Was Different

by Rhode Warrior Blogger, Mark Noll

It has been some time since I have written a blog.  I have had topics I wanted to discuss but it just seemed as though the timing didn’t feel right. The landscape seemed so different and I felt that my penchant for sarcasm was not welcomed in such troubling times.

But I only have so much patience and now that there appears to be a clearing in the COVID clouds, I thought maybe it’s best to now say what I have to say.

First, I would like to thank all those vendors out there who gave expert guidance on the unknown during the COVID outbreak.

I was truly enraptured that salespeople from all walks of the private sector would share their invaluable insights on us Prospect Researchers who were simply paralyzed by the bewildering world we knew absolutely nothing about.

I mean, who in our world would ever have thought to look towards donor advised funds and have special fundraisers for COVID relief? I know I, for one, was amazed at their acuity and came to realize just how myopic I was in the world of raising money that was not “business as usual.”

The ability for many experts to state the obvious was uncanny. 

But I suppose we couldn’t pretend that things were normal, and without these articles some vendors may have fallen into oblivion, much like the many unfortunate small businesses during this difficult time. I also understand we had to say something, and COVID did change the landscape of fundraising.

Which brings me to my second point: Has the fundraising landscape changed forever?

One thing that became evident to some was that the days of unrestricted giving may have been compromised a bit, and possibly forever. Targeted giving by younger alums increased in some areas. This should not be surprising because this sort of giving struck young donors where their philanthropic hearts rested. It wasn’t “money for whatever.” This was a need and many first-time donors found their way onto our databases.

Can we sustain these first time COVID donors? Time will tell.  But like all, we hope this is just their first of something more consistent and ever growing. 

The truth is, COVID changed the economy in a see saw sort of way.

The pandemic resulted in over 20 million jobs being lost. As a former labor market analyst, I can tell you that numbers of that magnitude do not auto-correct overnight. Some of the jobs will return but many are lost for the foreseeable future. More so, some occupations began their death throes. Smaller businesses were hurt by both shutdowns and fear itself. In many situations, survival came down to a business’s cash reserve and ability to withstand an unprecedented and unexpected downturn. Big corporations with deep pockets survived (not all of them), while smaller privately owned enterprises bore the brunt of the pandemic. 

I witnessed it myself here in Florida. I would often drive that wonderful death race they call I-4 that winds its way past Disney and all the other fantasy worlds.  What had once been like driving the Long Island Expressway at rush hour suddenly became comparable to a 4-lane country road at midnight.

I drove that wonderful stretch of road this past weekend and, though it wasn’t as devoid of other cars as it had been back in April, I could still change lanes at will and not have get ready to slam on my brakes in a second’s notice. This was Disney World? A place where us Floridians have learned to avoid any out of state plate lest you get caught in some tourist’s 4-lane “can’t miss my exit ramp” shift. Disney? Yes, empty. Had it not been for their billions of dollars in reserve capital, they could have gone the route of the nearby Pamela’s Potato Pancake Emporium. 

But I digress. The retail industry, which was already struggling to survive, found themselves going from bad to worse. Bankruptcies began to appear everywhere: J.C. Penney, J. Crew, Lord & Taylor, Pier 1, and EC Entertainment (Chuck E. Cheese), to name a few. Brand names we grew up with, even names our grandparents grew up with, were now shutting down.

Amazon is doing to the retail industry what the Burmese Python is doing to the Everglades. And not that Amazon didn’t already have a choke hold on the retail industry, but Mr. Bezos could not have thought up a better marketing plan than an epidemic with no inoculation or natural immunity. The only business getting hit harder than the retail industry are the commercial space owners that rent out the retail spaces. Strip malls may well become crypt malls. 

I could go on and on about who was impacted negatively by this pandemic, but then, I too, would be stating the obvious. Yet not all industries suffered. This pandemic resulted in what is called a K-shaped recovery. While retail, hospitality, and the service sectors in general floundered during the pandemic, highly skilled jobs in technology and professional services thrived. While many were selling off personal belongings to survive, November marked the best month for stocks in over 30 years. The rich got richer and the poor….well, you know the line. 

Now we are entering a semi-post-apocalyptic philanthropic world.

This is a strange time where the fork in the economic road has two divergent economic paths. From start to finish we are looking at the have’s vs the used to have’s. And the cruelty of it all is that one can make a reasonable conclusion that the divide exists along economic and educational lines. 

Then there is the other part of the equation, and I dare venture through this mine-field. There has been change in the party controlling the white house. Whatever your political beliefs may be, the election will likely result in changes. As fundraising strategists, we have to concern ourselves with not only what the transformed economy will look like, but also, what will it mean to us who have to figure out one’s giving capacity?

President Biden has stated that his administration will seek to raise taxes on individuals with incomes above $400,000, including raising individual income, capital gains, and payroll taxes. There would also be a higher tax on corporations by raising the corporate income tax rate and imposing a corporate minimum book tax. Will this revision pass? I don’t know. But if it does, the next question would be whether charitable write-offs will become more prevalent with those in these high income/increased taxed brackets.