Within the foundation world, grantmaking and fund development roles are often treated like opposite sides of a coin. However, in reality, these two functions share a uniquely symbiotic relationship. While both roles are important within a community foundation, there are ways this shared relationship can be further improved.
In a community foundation, staff members charged with fund development assist donors with leaving lasting legacies by making contributions to the foundation’s engagement. Grantmaking staff are then tasked with the responsibility of working with local nonprofit organizations to provide them with grant dollars to fund the work they are doing to improve the community.
The challenge with donor flexibility and grantmaking restrictions
Community foundations are often faced with a wide array of challenges when it comes to creating synergy between the fundraising and grantmaking sides of the foundation. This tension is often caused by a discrepancy in goals between both functions.
The considerable flexibility given to donors within a community foundation often causes complicated restrictions for grantmaking staff. If a donor contributes $1 million to the animal rescue fund, the funds can only be used to support organizations engaged in the cause. While this benefits animal rescue organizations, foundations may be prevented from supporting organizations impacting specific high needs in the community, such as early childhood education, food insecurity, and drug addiction.
In an effort to better align development goals with grantmaking needs, many foundations are beginning to think more strategically about how they pursue future gifts. Conducting a community needs assessment may identify that many of the afterschool and youth summer programs are challenged with long waiting lists due to lack of funding. The development department can drive funding in the area of childhood education, so the grantmaking department can increase grant dollars in an area of need for the community.
Here are 5 ways to strategically align grantmaking and fundraising goals
While aligning fund development and grantmaking goals will take some work on the part of the foundation’s executive staff members and board of directors. While it may sound easier said than done, there are some simple ways to begin now:
Pull a report from your grants management software to identify where the most funding requests are coming from in your community. Has there been an increase in education requests in the past three years? Are local human service agencies suffering from government cuts to funding?
Analyze the types of requests for support. Are more nonprofits requesting support for training and development? Maybe the foundation could offer professional development opportunities or fund a professional trainer to provide workshops that organizations could otherwise not afford.
Make connections between donor wishes and community needs. Would a local construction company be interested in establishing an endowment to support building improvement? Are there local doctors that would support a fund for HIV prevention?
Track donor interest. Keeping a database of the interest of various donors can assist foundation staff in calling upon prospective donors to support strategic initiatives when specific needs in the community are identified.
Don’t underestimate your data. With the right tools, foundations have the ability to pull all kinds of reports that can be shared with current and prospective donors. Using your data to create a metric-based impact story can assist donors in realizing the potential impact of their gifts to a specific fund, or the foundation’s unrestricted fund.
As foundations are continuously spouting the importance of collaboration, it is time to begin taking the advice constantly being shared. Fostering collaboration between the individuals tasked with securing foundation assets and those distributing them will increase impact and cohesion within your community foundation.
For more tips on improving how you manage and engage donors, download 5 Proven Tips for Community Foundations to Better Engage Donors.