In the last year, human services organizations have experienced an increase in philanthropic giving as a result of donors’ heightened awareness of the pandemic’s economic consequences and racial inequities faced by marginalized communities. Human services organizations, thanks to the influx in giving, were able to transform their work seemingly overnight to heroically meet drastic increases in demand for their support.
As organizations continue to deploy fundraising windfalls to meet ongoing heightened demand, many are revisiting their strategic plans with the goal of leveraging surplus funding to center the voices of their clients and more deeply address the root causes of the challenges facing their communities.
What We Are Seeing
Contributions to the human services sector compromised 14% of all donations received by U.S. charities in 2020. According to the recently released Giving USA 2021 report, giving to human services organizations grew 9.7% in 2020, totaling $65.14 billion. Adjusted for inflation, sector giving grew by 8.4% between 2019 and 2020. Contributions to human services in 2020 totaled the highest inflation-adjusted amount recorded to date. Not only are more people giving, but they are sustaining or increasing their level of support. A Fidelity Charitable survey found that 9 out of 10 donors maintained or increased their giving because of COVID-19, with 46% of respondents giving notably more than before.
We have also witnessed an influx of leading philanthropists making transformational gifts within the human services sector. According to a recent study by Bank of America and the Indiana University Lilly Family School of Philanthropy, nearly 90% of affluent Americans gave to charity in 2020. Human services organizations were a focus of MacKenzie Scott’s $5.7 billion in giving in 2020, including 42 food banks and 30 Meals on Wheels programs. Jeff Bezos made a $100 million gift to Feeding America, the nation’s largest hunger relief organization, in addition to considerable philanthropy throughout the human services sector and beyond. Charles and Helen Schwab and Joe Gebbia gave generous gifts to support people experiencing homelessness, with homelessness being the top cause among their total 2020 contributions of $65 million and $27 million, respectively. These mega-gifts, alongside many others, demonstrate that donors recognize the critical role human services organizations have had in supporting our most vulnerable populations throughout the pandemic.
Deploying Funds to Meet the Need and to Invest in the Future
The increase in philanthropic support provides a historic opportunity for organizations to strategically expand their vision and means of achieving their mission. What was once a moonshot idea may now be within reach because of unrestricted philanthropic support. Across the sector, organizations are deploying their funds in three overarching ways.
1) Immediate Need
At the peak of the pandemic, the World Bank projected that global extreme poverty (living on less than $1.90 a day) would rise for the first time in over 20 years. And as communities were reeling from the repercussions of the pandemic, human services organizations had to completely restructure their operations to meet safety measures whilst finding a way to significantly increase their outputs.
Increased levels of philanthropic support enabled organizations to create innovative solutions to meet the immediate and incredible needs of their communities. We have seen food banks across the nation feed millions more neighbors through first-of-its-kind drive-through distribution sites of prepackaged food. Partner organizations such as the Salvation Army were able to strengthen their efforts to break cycles of generational poverty by providing extraordinary utility assistance and access to shelter. The job of a human services organization is never complete, but as the pandemic created a heightened need, increases in philanthropic giving have been vital to providing critical services.
Human services organizations are often hyper-focused on the issue at hand, and for good reason! However, an increase in philanthropic support has enabled organizations to think strategically around investing for long-term success.
The influx of cash that many human services organizations have received enables them to ensure the longevity of their work through the creation of an endowment fund and reserves. Whether through the creation of a general endowment fund, endowing a specific need such as technology, or creating or expanding a “rainy day” fund, organizations can now apply surplus funding to sustain client services.
Organizations have also invested in their staff. Through the addition of a new development team member or impact officer, nonprofits can focus on retaining new donors and have the means to sustain their mission. Nonprofits in the human services sector now have a greater ability to ensure their work continues well into the future.
3) Catalyst Investments
Some human services organizations that now have the funds to address immediate needs and build reserves are considering bold and visionary ideas. From expanding their scope of work to include wraparound services and/or advocacy, to streamlining processes to make services more readily available to their clients, human services organizations are exploring how they can make deeper inroads to addressing the root causes of their communities’ challenges. Additionally, many organizations are considering capital investments to achieve their work more effectively and efficiently and impact their community in a more meaningful way. An increase in philanthropy has allowed human services organizations to act on ideas they had previously dreamed about but did not have funding to realize.
Centering the Voices of Those You Serve
As human services organizations strategize the most impactful way to deploy surpluses from fundraising windfalls, they are uniquely positioned to double down on efforts that empower the most vulnerable populations in their communities. This comes during a time when donors are asking, “How are you helping to solve the challenges facing the populations you serve?” Organizations are finding that amplifying the voices of their clients is a critical step to truly meeting the needs of their community and creating a deep and lasting impact. We are seeing human services organizations approach this work in three key ways:
Understanding the Challenges of Their Respective Communities
Human services organizations are keenly focused on solving biosocial problems that impact people from an extensive range of socio-economic backgrounds. Thus, the needs of different communities can vary widely and present distinct factors that will inform how service organizations can deliver the most effective services. Organizations are meeting with community leaders in their service areas to learn more about the people they serve: their unique needs, hurdles they face in accessing support, and measures that can be taken to overcome them.
Some nonprofits have taken this work a step further by targeting their outreach to the most vulnerable populations, recognizing that socio-economic challenges disproportionately impact specific segments of their communities. These conversations and listening sessions inform how nonprofits can tailor their strategic plans to ensure funds are deployed in a highly intentional and impactful way.
Questions to consider when seeking to understand the challenges faced by the communities you serve:
- How can your organization engage in conversation to co-create solutions to issues facing your service areas?
- How can your organization prioritize the needs of the most vulnerable in your planning and realization of your mission?
Creating and Expanding Partnerships
No one organization can address every issue facing its community. Through complementary partnership, nonprofits, governments, and corporations can together create an incredible network of support that leverages the brain trust and skills of experts from different facets of human services work.
We have seen nonprofits who work to reduce food insecurity partner with local healthcare providers to tackle multiple social determinants of health at once. Financial guidance nonprofits, career training teams, social workers, and hunger relief organizations have combined forces under one roof to provide a one-stop shop for individuals experiencing poverty. Partnering with other organizations allows for increased impact, more amenable services to those you are serving, and providing a space for innovative ideas to come alive.
Questions to consider when looking to create or expand partnerships:
- What partnerships can be deepened or built to more deeply address the root causes of the challenges your clients are facing?
- How can partnerships create more accessible services for your clients?
Reassessing a Client’s Experience
The past year has placed much-needed emphasis on breaking down racial stereotypes to build inclusive and equitable access. At the heart of this reckoning is the need to honor the dignity of individuals who access support. Human services organizations are uniquely qualified to make progress on these priorities. One of the ways they are doing this is by assessing how clients experience their support. For some organizations, this has meant distributing fundraising surplus as grants to immigrant-led nonprofits to ensure the deployment of culturally relevant support and services. Other organizations that have a prominent seat at the figurative “table” – whether that be with a government, nonprofit alliance, or professional association – are creating an opportunity for immigrant and marginalized community leaders to ensure true representation. Respecting and creating agency for the people you serve fortifies relationships, increases trust, and deepens your mission and impact.
Questions to consider when exploring ways to create agency:
- Where can your organization focus on equity versus efficiency?
- What shifts can your organization make to be more amenable to the clients’ needs, in turn meeting them with dignity?
Increases in philanthropic support to human services organizations provide a historic opportunity for organizations to explore bold and visionary investments. With immediate operational needs and financial reserves addressed by spikes in fundraising, nonprofits should leverage their additional surplus to explore catalyst investments. Engage, partner, and empower the communities you serve to inform how your vision should be pursued and how impact can be measured. Donors trust your organizations to be the experts in your respective work. Your commitment to centering the voices of the communities you serve will instill further confidence and enthusiasm in those who support your mission.
 The Giving Institute, Giving USA 2021: The Annual Report on Philanthropy for the Year 2020
 Fidelity Charitable, “A Year Unlike Any Other: How Donors Plan to Approach Giving at 2020’s Year‐End”
 The Chronicle of Philanthropy, “Jeff Bezos, MacKenzie Scott, and Michael Bloomberg Top List of America’s 50 Biggest Charity Donors” and Food Bank News, “42 Food Banks Prepare to Spend Mega Gifts from Philanthropist MacKenzie Scott”
 The World Bank, “COVID-19 to Add as Many as 150 Million Extreme Poor by 2021”