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Other Sources of Funding
Part Ten
Over the past eight weeks we've explored the philanthropic landscape in the U.S. talking about the different kinds of funding -- mainly grants and loans -- that you can garner to help you build your organization's programs and projects.
The last item to discuss is individual giving, including the proliferation of giving circles, donor-designated funds, and planned gifts.
Who Is Giving?
Years ago most people who wanted to give a large amount of money to charity chose to launch private foundations. This was a common, and much appreciated, way to give back to the communities where these individuals had made their money. Many people also opted to give to their churches. Some of these individuals gave large amounts of money, so their donations made up a substantial percentage of overall charitable giving.
That paradigm has changed. Today, though we continue to see a lot of faith-based donors and individuals who are starting foundations, there are also numerous groups of individual givers making significant financial gifts.
Recently, three emerging groups of givers are making an impact in the philanthropic landscape. These groups include: women, racial/ethnic donors, and diaspora donors.
Women have begun forming their own giving circles, establishing donor designated funds within existing community foundations, and generally becoming much more aggressive in their grantmaking. To learn more about women's roles in the area of philanthropy, and to see who is blazing trails, you can go to the Women and Philanthropy website. There are numerous other resources, as you'll soon see if you do a Google or Yahoo search on "women and philanthropy".
Racial/ethnic donors, including Native American donors, are establishing specific funds to help preserve their cultures, and grow healthy communities. There are a number of websites that provide information on these donors, including the Native American, Asian, and Latino populations, as well as numerous other ethnicities.
The Forum of Regional Associations of Grantmakers (FRAG) defines diaspora donors as "immigrants living in the United States [who give] back to their home countries through ‘remittances' and contributions to hometown associations." According to Foreign Affairs, foreign born individuals living in the U.S. provide over $35 billion per year to their home families and communities.
What Is a Giving Circle?
Giving circles can be a remarkably meaningful way to engage in philanthropy.
According to FRAG, giving circles are "formed when individuals come together and pool their dollars, decide together where to donate their collective contributions, and learn together about their community and philanthropy." You can find almost all of the information you need to start or build a giving circle here.
The beauty of giving circles is that anyone can start one. You don't have to have large amounts of money to launch a giving circle, yet giving circles can stimulate a lot of philanthropy in your community.
What Are Donor-Advised Funds?
Donor-advised funds are the fastest growing charitable giving vehicle, with more than 107,000 account holders (second only to charitable remainder trusts). Wikipedia defines them succinctly:
A donor-advised fund is a charitable giving vehicle administered by a third party and created for the purpose of managing charitable donations on behalf of an organization, family, or individual. A donor-advised fund offers the opportunity to create an easy-to-establish, low cost, flexible vehicle for charitable giving as an alternative to direct giving or creating a private foundation. Donors enjoy administrative convenience, cost savings and tax advantages by conducting their grantmaking through the fund.
In fact, I have established a donor-advised fund at our statewide community foundation, and the process is easy. Since we aren't wealthy people, my husband and I are creating this fund by carrying a life insurance policy which will endow the fund once I am gone. It's an easy way to make a large gift without having ready cash to do so. More and more people are making these types of "planned gifts."
Planned Giving: A Program to Consider
Before we wrap up this series, I wanted to mention the importance of planned gifts in the philanthropic landscape. As one generation passes their wealth to the next generation, we are also seeing a spike in estate giving.
According to PG CALC, planned giving refers to "charitable gifts that require some planning before they are made . . . Whether a donor uses cash or other assets, such as real estate, artwork, or partnership interests, the benefits of funding a planned gift can make this type of charitable giving very attractive to both the donor and charity."
I like their explanation because it's simple -- and to the point. There are, of course, numerous websites that can help you navigate the maze of planned giving possibilities (and there are dozens). Establishing a planned giving program is an avenue you want to consider if your organization is at least ten years old.
This concludes this series on understanding the philanthropic landscape in the U.S. today. If you have any questions, please feel free to email me
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