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As Donations Shift in the Pandemic, New Databases Aim to Help



Charitable giving both increased this year and went in new directions, as donors, big and small, responded first to the pandemic and then to social justice causes after the killing of George Floyd in May.

The Foundation Source, which advises smaller corporate and family foundations, recently surveyed its members and found that 39 percent of respondents had shifted their foundations’ missions in response to the events of this year, while 42 percent had increased their giving. And some said they had used their foundations to make grants directly to individuals, award scholarships or engage in direct charitable activities.

“We’ve seen a change in behavior,” said Stefanie Borsari, national director of client services for Foundation Source. “Of the top reasons that people shifted their mission or focus, the biggest was certainly Covid, but about a third of respondents also noted social justice concerns,” she added. “It’s hard to separate social justice and Covid.”

Fidelity Charitable, the largest grant maker in the country, found similar increases in donations in the pandemic in a report in June that detailed how people used its donor-advised funds to make charitable grants. That report found grants to food assistance programs were up 667 percent nationally, but donors also continued to give to their regular charities.

What smaller foundations and individual donors have often lacked, though, was knowing which nonprofits in which communities would best use their donations.

Two new philanthropic databases are aiming to fill that breach by highlighting nonprofits that are addressing social justice and pandemic issues. Both are efforts to help channel a desire to help organizations ready to effect change. The two are also aiming to bring recognition to lesser known nonprofit groups that are doing work specific to the year’s crises.

The first, Give Blck, which went online Friday, was started by two philanthropists to call attention to Black-founded nonprofit organizations that were little known or too small to be highlighted by some of the leading philanthropic rating services. It is going live with about 200 nonprofit organizations in 18 categories, like education, arts and culture, and health and human services.

The second is an interactive map created by Vanguard Charitable, the mutual fund company’s donor-advised fund arm, set to be released next month. Vanguard’s charitable choice map allows donors search for pandemic-focused nonprofit groups by a variety of factors, such as those that operate in severely affected areas or focus on areas with fewer health care resources.

For example, the Clare Rose Foundation, which supports arts organizations that help children mainly in the San Diego area, struggled at first to fund programs and organizations that had almost immediately ended in-person programs. It knew that stay-at-home orders would jeopardize the support that these groups gave children, including food and mental health counseling.

In the first nine months of this year, the foundation began to focus on grants to people who were laid off by its partner organizations. Since the start of the year, it has given 65 percent more to nonprofit groups than it had in all of 2019.

“We gave about 42 micro-grants, between $500 and $1,000 to teaching artists, who were the first to be let go,” said Matt D’Arrigo, director of creative youth development at the Clare Rose Foundation. “You think, how could that amount matter? You don’t realize what an impact that made. This was before P.P.P. and enhanced unemployment,” he dded, referring to the Paycheck Protection Program and jobless benefits in the federal virus relief law.

The foundation has joined with others in San Diego to create a larger fund for arts teachers struggling to find work.

Likewise, the Voorhis Foundation, set up by Silicon Valley investors Grace and Steve Voorhis, had been focused on a multiyear research project on how to achieve more equitable educational outcomes. But given the new travel restrictions, the project was shelved.

Instead, the foundation found ways to make individual grants to the neediest families of children enrolled at KIPP Academy in San Francisco, part of a national network of charter schools. From late March to mid-June, the foundation gave $239,000 in direct grants to 330 families.

“We got it up quickly,” Ms. Voorhis said. “I don’t think I’d do this every year, because I think the audit process is going to be a nightmare with 330 individual families, some without a mailing address. But it’s been a very rewarding process.”

That’s where these new databases hope to step in.

Both the Clare Rose and Voorhis Foundations were giving to individuals connected to organizations that they were already supporting. They credited the Foundation Source with having legal documents ready so they could give to individuals, which the Internal Revenue Service allows under an extreme situation with a limit of $5,000 a person.

The databases aim to apply a similar principle to finding lesser-known nonprofit groups that are able to spread the money into their communities. They also seek to highlight well-established ones, like the Children’s Defense Fund, that can put large donations to quick use.

“I’ve seen it my whole life that Black nonprofits are cash starved,” said Christina Lewis, a philanthropist who founded Give Blck with Stephanie Ellis-Smith, a philanthropic adviser. “You can help Black people by doing more than donating to social justice organizations. You can give to food organizations. You can give to mental health, to technology and careers, to arts and culture institutions. But there was no easy way to find these organizations.”

Image“I’ve seen it my whole life that Black nonprofits are cash starved,” said Christina Lewis, a philanthropist who co-founded Give Blck.
Credit…Astrid Stawiarz/Getty Images

Ms. Lewis said the Give Blck database focused on Black-founded organizations because “I know that the founder identifies the problem that needs to be solved.”

Khary Lazarre-White, executive director and co-founder of the Brotherhood/Sister Sol, a youth development and social justice organization, said unsolicited grants to his organization rose when Give Blck’s research on the group was featured by Charity Navigator, which assesses nonprofits.

“We saw an uptick from a few in a month to dozens in a month, with lots of small donations from around the country,” Mr. Lazarre-White said. The group has an annual budget of about $7 million. He said he hoped that the database would help maintain public awareness around social justice and help push Black-founded charities into public view.

“There are more people aware and participating and looking for racial justice in the country,” he said. “But the energy that was there in the spring has already dissipated.”

Vanguard’s mapping project allows donors to use three major criteria to assess the coronavirus’s impact: an area’s vulnerability, its incidence rate and the amount of donations to local nonprofit organizations. The tool starts with geography, but allows donors to filter for specific areas within a region to find places lacking in medical resources or with higher concentrations of people with underlying conditions.

“Part of what we’re trying to correct for is the communities that are being overlooked with charitable donations,” said Magda Guillen Swanson, research project strategist at Vanguard Charitable who helped create the tool. The map includes some 300,000 nonprofit groups, including small local ones, that are focused on virus relief.

“Those communities that are already vulnerable — if they get hit hard, then they really get hit hard,” said Jane Greenfield, president of Vanguard Charitable. “You can search within the region. But you can also say, if I’m in the state of California and I want to help those that are hardest hit, you can search for those, and then you’re looking at charities that perhaps you haven’t seen before.”

And that’s possibly a way to translate passion into progress.


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The Trump campaign celebrated a growth record that Democrats downplayed.



The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.


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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.



The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.


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Ant Challenged Beijing and Prospered. Now It Toes the Line.



As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.


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