How do I best structure my support?
Once you have identified an organization you might want to support, think about how you would structure that support. What type of grant would you offer? What size? What would the requirements be?
More About Support
"Individual Donors—What Can I Give?" Forum of Regional Associations of Grantmakers
For a more detailed discussion of the various asset types you can give.
Program Related Investing: Skills and Strategies GrantCraft
Information on Program Related Investment (usually low-interest loans to nonprofits).
A grant's duration can be established up front, or conditioned on performance. Funding can be restricted to a specific program, or unrestricted.
- If you are thinking about supporting a fairly early-stage organization, consider a business-planning grant that focuses funding the development of a business plan (either internally or with outside advice). This type of grant can serve as a test grant. When the organization develops a business plan, you will better understand its strategy and growth potential, and use that knowledge to help you decide whether to make a larger or more long-term grant
- Consider a small grant to cover a due diligence process if you are planning to pursue in-depth due diligence as part of your evaluation of a potential grantee, and you want to offset the demands you are placing on that organization.
- If you are considering fund restriction, ask: "What is my rationale?" For example, do you want to ensure that the grantee focuses on programmatic areas you value? Do you want to limit the grantee's spending on overhead? What effect will restricted funding have on the rest of the grantee organization? Learn more about how overhead works and should work for nonprofits.
- If your funding will start a new program or location for the organization, do you know how the organization will achieve sustainable funding if or when your support ends?
Calibrate a grant's gross size by considering your overall capacity and portfolio decisions and grantee need.
- How much money is required to achieve your goals for this organization?
- How dependent on your support are you willing to let the grantee be?
- What is the grantee's overall funding mix?
- Who are possible partners to help fund the organization’s philanthropic needs?
More About Capital
"Money to Grow On: Funding Growth for Promising Nonprofits" Stanford Social Innovation Review
For a perspective on the value of supporting grantees with true growth capital.
More About Capital
"The Nonprofit Starvation Cycle" Stanford Social Innovation Review
For more information on the impact of overhead restrictions on nonprofits.
Set grant requirements by asking yourself: "What milestones will I expect my grantee to reach? What outputs? What outcomes? What extent of social impact, along the grant lifecycle?" Articulate in your grant the conditions that your grantee will have to meet for renewal, if applicable.
- What grant requirements will ensure success? Will the grantee be able to use these measures to learn and improve performance? How will we measure and evaluate performance along the way? Does the grantee have capabilities to track these outcomes?
- If you would like to require regular reports of grantees on performance, how precisely will you use these reports? How much strain will they place on the organization to produce? Can you leverage other reports they are already creating? Will you providing funding to support measurement?
- What is your exit strategy? How could this influence the grant’s structure? For example, you might want to require that the grantee raise matching funds or seek governmental funding to ensure that they have widespread support and funding streams down the road.