What does it mean to be a grantmaker, and what does it look like from a donor-advised fund?
In this video, Senior Philanthropic Advisors Nicole Stuke and Whitney Hosty share the ins and outs of making grants through a charitable fund at Greater Horizons. They cover:
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Video Transcription
Nicole Stuke: Hello, and thank you for joining us today. We are happy to have the opportunity to inspire your philanthropic journey and empower you to give in ways that are meaningful to you. I’m Nicole, and I’m a philanthropic advisor. And joining me today is my colleague, Whitney, who is also a philanthropic advisor. In this segment, we will share all about grantmaking. So I’m excited to jump in, Whitney, and talk a little bit more with you about grantmaking with your expertise and experience that you have. So tell us a little bit about what your thoughts are. What is actually grantmaking?
Whitney Hosty: Grantmaking is simply providing financial support to any nonprofit organization or cause. So the nice thing is that with a donor-advised fund, everyone can be a grantmaker. And you may also hear grants or grantmaking also referred to as giving or tithing. There’s no really right or wrong answer or correct word. It’s just providing that financial support to support the ongoing operations of an organization.
Nicole Stuke: So pretty simplified, right? Just really talking about your giving and more like that. So as we talk about grantmaking and things, how can I support organizations that I care about with my donor-advised fund?
Whitney Hosty: There are a lot of ways that you can support those organizations that you care about through your donor-advised fund. Really, the simplest, most basic and, oftentimes, most valuable to an organization is that unrestricted or general operating support. That allows an organization the flexibility to use those funds really in the areas that are needed the most within the organization at that time. Other ways that you might support one time or special projects within an organization could be for a capital campaign. A capital campaign generally refers to providing support for the construction, or renovation, or acquisition of facilities. Or, you might also provide support for an endowment. Endowment funds are important because they really help to provide ongoing support longer term for an organization. And another way that we see donors supporting organizations, through special events. Those can often be fun or unique ways to be involved in directly supporting the mission of an organization, while also helping them to raise financial support. There are ways to do all of this type of giving, any of these ways that I’ve mentioned, through your donor-advised fund as well.
Nicole Stuke: How do you add some strategy to that, or really think about how you want to plan out your giving?
Whitney Hosty: Well, we have worked over the years with donors at many points on their philanthropic journey. And it doesn’t really matter whether it’s an individual or a family that have set up the donor-advised fund, or perhaps it’s a corporate fund. We still will start the conversation the same way, no matter what type of donor it is. Our first question that we want to ask is what’s important to you? Because that should really be at the heart of any grantmaking strategy from your fund, and we get lots of different answers to that. For some, it may be a specific area of interest. Maybe it’s the arts. Maybe it’s education. Maybe it’s community development. Or perhaps, it’s something more like, “I care about supporting what my friends and family are supporting.” These are all things that can change over time too. If something is a priority for you now, it’s not to say that that will always be the priority. But that strategy can really help you to make sure that your giving or your grantmaking is really aligned with what you care about in the community.
Nicole Stuke: So as we talk through, Whitney, giving strategies, what is really that process of formulating a giving strategy?
Whitney Hosty: All our work is done one donor at a time, so it is really customized for each individual or family or company that we work with. And so when we’re, for example, meeting with a family, we will start with that conversation. What’s important to you? We’ll talk about your interests. We may do some exercises to identify your values, and we’ll help you to come up with, especially if we’re working with a family, what are some commonalities or similarities between those interests and values in family members? And oftentimes, there are some great intersections where we can find something that, really, maybe a whole family can rally around and support. Once we’ve identified what those priorities are, then we’re able to provide some research and reports to back up that work, and provide additional information on organizations that may be working in those areas that, as a donor, you might want to go learn more about and explore in the community, and see which ones might be the best fit with what you’re trying to accomplish through your giving.
Nicole Stuke: So Whitney, I heard you say the word values. It sounds like this is something that we can actually talk to donors about and really dig into what their values are, and maybe do some exercises with them to help them identify their values.
Whitney Hosty: Sure! Well, similar to aligning your giving with interest areas, you may want to consider aligning your giving also with your values. We found that, really, values help to drive a lot of decisions for donors. These, oftentimes, are values that have been in place in their families, maybe since their childhood, and we have exercises that we have done with donors to really help them to identify what their values are and in also identifying their interest areas. And then, really, that sweet spot is when we can work with them to align their values and their interests so that they’re giving is in support of both of those areas. Really, it’s looking at what is that change that you want to see in the world, and how are those values motivating your giving in those areas as well?
Nicole Stuke: It comes back to, “Okay, now I have this great donor-advised fund. I have some strategy around it.” I think to myself, “How much should I be giving, or when should I be giving, or how should I be giving?”
Whitney Hosty: Yeah. That’s another great question, Nicole, because this is something we talk with donors about a lot. We have some donors that have, maybe, in their peak income-producing years, set these dollars aside with a plan for being able to focus on their philanthropy during their retirement, and they really want to make sure that they’re prepared with those resources set aside and have the time and energy to focus on identifying what they really want to be supporting. We also work with some donors who say, “I have these funds, I’m ready. I want to go ahead and grant out everything in my fund right now and I’ll replenish it each year, and that just really helps me to budget for my giving.”
And then we have donors who, really, maybe they want to make that one-time legacy gift. Maybe they’re setting those funds aside to allow them to accumulate to the point where they can really have a significant, really life-changing type gift for an organization. And those transformative gifts can do incredible things to support organizations and causes that they care about. So they then can use that donor-advised fund to allow it to grow over maybe a five or a 10-year period until they’re ready to make that transformative gift. That’s where our advisors enjoy the opportunity to sit down with donors, and that’s part of that strategy of not only what do you want to support, but how? And is it providing some funding each year, or maybe looking at a longer-term transformative gift?
Nicole Stuke: Also, when you talk about giving, do you involve the non-profits at all in these conversations with donors?
Whitney Hosty: Absolutely. Whenever we can, it’s such a great opportunity to help make those connections with the donor and the organization.
Nicole Stuke: So who can help me with my giving?
Whitney Hosty: The great thing is we have a whole team here available to support your giving. So whether it’s talking about the strategy for making those gifts into the fund, or those grants out into the community to support causes that are important to you, we have a number of resources available on our staff. Everything from our donor services team to philanthropic advisors like us.
Nicole Stuke: Well as we wrap up here, I just want to say thank you, Whitney, for all your expertise and advice today to our donors. I think it was great, and they will have such a great time on their grantmaking journey. And I just want to thank all of you so much for joining us today in this conversation. We are here to help in any way that we can as philanthropic advisors, and really to help you on this journey of your philanthropic giving.
