February 09, 2022
How to Make an Impact Beyond Grantmaking
While grantmaking remains one of the most powerful ways to create an impact, philanthropists can leverage additional strategies. Here are several examples that can help you leave a more impactful legacy.
Become a strategic partner, not just a funding source
Philanthropists can make an impact in many ways beyond providing funds. By strategically partnering with your grantees, you can gain a better understanding of the issues and challenges they face. Your partnership may open new opportunities for your grantees through providing access to mentorship, education, training or even new staff and team members. You likely have relationships and other connections who could benefit the organizations you support in a variety of ways.
Example: You likely have an influential network including other funders, as well as business and civic leaders. Think about how your contacts could help your grantees scale their impact, and consider convening community stakeholders around common goals and interests. This can be especially effective for place-based funders.
Collaboration among funders can be an incredibly powerful tool. When multiple grantmaking organizations come together to share ideas and learn together, their partnership opens doors not only to increasing the financial support for grantees but also to discovering and responding to additional, unmet needs of these organizations and to magnifying the impact of the nonprofits they support. Ultimately, a collaborative take on grantmaking can create the opportunity to develop new strategies and improve the funders’ and grantees’ abilities to make a lasting impact.
Roll up your sleeves
One of the most mutually beneficial and effective experiences for foundations and their grantees is to work alongside one another. As a funder, you have an opportunity to get up close and personal with the projects and programs you support while also building a deeper connection with your grantees. For grantees, these moments provide an opportunity to see you as more than a funding source and learn more about your foundation’s mission, vision and values.
Example: If possible, try volunteering with your grantees. If you are willing to make a larger time commitment, you might offer to serve on the host committee for an event, chair a fundraising campaign or contribute to a strategic planning process. Conversely, consider inviting grantees to engage in your work as a funder by giving them voice in the development of your application and selection processes.
Align values and investments
Many investors believe their investment portfolio should align not only with their financial objectives but also with their personal values. For example, if grantmakers have a passion for supporting environmental causes, their investment portfolio can be tailored to use environmental, social and governance information throughout the investment process. By aligning their investment portfolio with their philanthropic goals and thereby aligning capital with the mission of grantees, grantmakers can focus their strategy on making an impact on what is most important to them. And grantees can feel confident the money earned is through socially conscious investing.
Make program-related investments
Program-related investments (PRIs) are a great way for grantmakers and philanthropists to invest directly in a cause they believe in. The investments typically come in the form of low-interest loans or equity investments in organizations to help address their social or environmental concerns. PRIs may be made to exempt and nonexempt entities, including for-profit corporations, and a foundation can earn income on its PRI. However, the primary purpose of a PRI must be to accomplish the foundation’s charitable mission. Grantmakers often will collaborate on a PRI through an intermediary such as a community development financial institution that handles the administration and reporting.
A community development financial institution is a private sector financial intermediary with community development as its primary mission. CDFIs have a variety of structures and development lending goals. There are six basic types of CDFIs: community development banks, community development loan funds, community development credit unions, microenterprise funds, community development corporation-based lenders and investors and community development venture funds. All are market-driven, locally controlled, private-sector organizations.
If you have any questions, please reach out to your Glenmede Relationship Manager or email EFSolutions@Glenmede.com.
This presentation is intended to provide a review of issues or topics of possible interest to Glenmede Trust Company clients and friends and is not intended as investment, tax or legal advice. It contains Glenmede’s opinions, which may change after the date of publication. Information gathered from third-party sources is assumed reliable but is not guaranteed. No outcome, including performance or tax consequences, is guaranteed, due to various risks and uncertainties. Clients are encouraged to discuss anything they see here of interest with their tax advisor, attorney or Glenmede Relationship Manager.