The Changing Space of Private Foundations

It is generally understood that private foundations can give money to any project as long as that project is for charitable purposes.  As this is fairly general the opportunities abound.  Limitations arise when you start seeing yourself solely as a grant-maker.  The focus of this post is on reassessing your assets as a private foundation.

Last week I was on a webinar hosted by Advisors in Philanthropy on the role of private foundations in the charitable sector.  I liked how the presenter laid out the concepts around the non-monetary assets of the foundation. 

What you bring to the table (aside from financial):

• Skills - Unique expertise
• Networks - Your circles of influence
• Creativity - You bring a new perspective to an "old" issue (i.e. poverty)
• Credibility and your reputation
• Life experiences

How can you take these qualitative assets and apply them to your grant disbursement process?

1. Design a special scholarship program: This could be funding for a "B" student because "A" students have access to resources that other students who have growth potential don't have access to.
2. Create an award or a prize: This allows you to leverage funding the prize by engaging others in the process.
3. Conduct direct charitable activity
4. Act as grass-roots agents: Engage your community members as your "ears-on-the-ground." For example, if you are interested in tackling the Human Trafficking issue, engage your local police department during your information gathering process and engage them as you evaluate projects.  Grass-roots agents are those who are on the ground working in the space that you are interested in and are bringing information back to you to enhance your foundation's services.
5. Pay the costs for due-diligence reporting: You want to know how your money is being spent. It costs the charity to draw up specialized reports. Paying for these costs on top of the project funding.
6. Matching grants/challenge grants: This taps into your reputational capital and it engages the charity on a higher level.
7. Grant directly to individuals for emergency assistance
8. Provide technical assistance: This allows you to leverage your business knowledge and contacts; specifically around connecting business services to your recipient agency for their internal supports (i.e. technology, HR or accounting).
9. Program related investments: Provide a short-term low interest loan as part of bridge funding.  The interest generated on the loan can actually be reinvested back into your foundation for future disbursement.  You can also use your credibility and reputation by negotiating lower interest rates for your recipient (i.e. office rent, mortgage rates, loans)
10. Mission related investing: This is something that I have blogged about before - how do the other 96.5% of the funds in your foundation reflect where you are donating?  Have these dollars invested in like-minded for-profit revenue generators.
11. Act as a convener: Create space for others to meet, share information and knowledge, brainstorm and develop new ways of tackling these "old" problems.

The presenter during this webinar made a very good point, "Grants are high-risk because the money goes out of the foundation and doesn't come back."  The idea around the changing space of foundations is to look at all the assets, financial and non-financial, and how they can intersect to achieve your foundations mission.