Every dollar granted mobilizes more dollars.
We believeFoundations are in a unique position to reshape the social sector and its ability to address today’s greatest human challenges. Driving change will require a shift in thinking by both funders and grantees. The first step is acknowledging our current nonprofit funding model is flawed.
Nonprofits must be encouraged to strive for sustainable business models. At the same time, foundations must recognize that a financial strategy built on diversifying philanthropic donations will not be sustainable over time.
Foundations that leverage their assets in innovative ways will play a vital role in building Impact Organizations and creating lasting change.
WHAT IF your grantees could earn enough revenue to cover their operations?
More often than not, grants to nonprofits are used to fund short-term, immediate needs – this year’s operations, repairs to broken equipment, or capital to build a new facility.
As nonprofits move toward financial sustainability, their dependence on donations and grants decreases. Philanthropy is only needed for growth opportunities. Learn more about the Sustainability Spectrum.
The road to sustainability requires time, commitment, and a willingness to change. Learn more about the SUSTAIN Initiative and the path to growth and scale.
WHAT IF your grant leveraged powerful opportunities for a nonprofit?
When a business is in growth mode, it is not unusual for the management team to look to outside investors for capital. Multiple options are typically available. The same is not true for innovative nonprofit organizations. Investors may not be willing to take a risk on the new idea, or the cost of the capital may be prohibitive.
Foundations are in a unique position to help Impact Organizations unlock low- or no-cost working capital. Through the GIVS Guarantee Program, foundations can use their assets to guarantee loans, or they can serve as the capital partner providing the scaling funds directly to the organization. Learn more about the GIVS Guarantee Program.
WHAT IF new tools could maximize your annual 5% distribution?
Foundations have a unique opportunity to create high impact in the community through program-related investments (PRI). A PRI is similar to a grant, in that in satisfies the distribution requirements, aligns with the foundation's mission, and creates impact for the nonprofit. This is where the similarities end.
A grant is a donation in support of the nonprofit's charitable activities. A PRI is an investment in support of the nonprofit's charitable activities that is expected to generate revenue. Over time, the nonprofit gives back the funds to the foundation, along with any financial returns. The returns go back into the foundation's corpus, and the initial investment dollars are distributed through a PRI to another nonprofit. The impact cycle continues for as long as the investment generates revenue.