DAF Grants Show Donor Differences By Geography

New York City residents might provide the most grant dollars overall but other cities’ citizens give a larger percentage to different charitable sectors, according to an analysis of grants recommended by Fidelity Charitable Giving account holders.

The Boston, Mass.-based donor-advised fund (DAF) released its Geography of Giving study this morning, analyzing how donors in 30 metropolitan cities give to different nonprofits. The report ranked the top 10 metro areas in eight charitable sectors as defined by the Internal Revenue Service (IRS): arts and culture, education, environment and animals, health, human services, international affairs, and society benefit. Fidelity Charitable announced it has 200,000 donors nationally who supported more than 142,000 nonprofits in calendar year 2018.

The Geography of Giving ranks the top 30 metropolitan areas by the percentage of local Giving Accounts that recommend grants to nonprofits across each sector. Each metro area has 700 or more Giving Accounts. Human services (56 percent), education (54 percent) and religion (52 percent) are the most popular segments to which donors recommend grants, and the only ones that eclipse 50 percent.

Human services saw the most changes in its ranking, with four new cities joining the top 10 – Seattle, Charlotte, Philadelphia and San Francisco – likely in response to natural disasters like Hurricane Florence in North Carolina and wildfires in California. Support of education was particularly strong in the Northeast while religious organizations ranked high in the South and Midwest. The West was disproportionately prominent in its support of environment and animals while cities with a more global perspective, such as Washington, D.C., were active in the international affairs sector.

Environment and animals saw the largest increase in any charitable sector among Fidelity donors, with a 24-percent increase in the number of Giving Accounts recommending grants. That was followed closely by a 23-percent increase in grants to health-related charities.

The top metropolitan regions by percentage given in each charitable subsector varied, with Boston taking the top spot in two categories:

  • Arts and culture: Portland-Vancouver-Beaverton, Ore.
  • Education: Bridgeport-Stamford-Norwalk, Conn.
  • Environment and animals, Boston-Cambridge-Quincy, Mass.
  • Health: Boston-Cambridge-Quincy, Mass.
  • Human Services: Cleveland-Elyria-Mentor, Ohio
  • International affairs: Washington, D.C.-Arlington-Alexandria, Va.
  • Religion: St. Louis, Mo.
  • Society benefit: Miami-Fort Lauderdale-Pompano Beach, Fla.

The top regions ranked by total grant dollars from the region, followed by percentage of grant dollars recommended to local charities, included:

  • New York City, $780.5 million (58 percent)
  • Boston, $606.7 million (56 percent)
  • San Francisco, $511.5 million (21 percent)
  • Chicago, $343 million (53 percent)
  • Washington, D.C., $176.6 million (52 percent)
  • Connecticut, $169.1 million (26 percent)
  • Los Angeles, $149.2 million (49 percent)
  • Dallas, $99.9 million (61 percent)
  • Seattle, $94.9 million (46 percent)
  • Minneapolis-St. Paul, $79.5 million (46 percent)
  • Miami, $67.7 million (26 percent)
  • Atlanta, $58.5 million (57 percent)
  • Denver, $35.4 million (32 percent)
  • Cleveland, $21.4 million (53 percent)

To access the full Geography in Giving report, click here.

8 Budget Questions Funders Will Ask

Funders put the budget and budget justification under a microscope. According to Barbara Floersch of The Grantsmanship Center in Los Angeles, Calif.: “You’ve got to get it right. When you understand their concerns and the questions they’ll pose, you’re in a much stronger position to nail it.” Here’s a list of questions funders are sure to ask.

  • Does it fit within our general range of giving? If the foundation’s top grant is $5,000 and you ask for $25,000, you’re waving a huge red flag.
  • Is it consistent with instructions in the application guidelines? If the funder provides a form, use it. If you’re instructed not to request over $10,000, don’t ask for $10,001.
  • Is it consistent with the narrative? If an activity will require resources, it must show up in the budget. If a line item shows up in the budget, it must be discussed in the narrative. The budget should mirror the proposal narrative.
  • Is it reasonable to support the program? A budget that’s too lean is as bad as one that’s inflated. It must be adequate to fully and professionally implement the program and no more.
  • Are line-item calculations specific and based on solid estimates? Show the funder how you calculated the line items and indicate that they’re based on real estimates. Don’t just guess when constructing line items. Do some research.
  • Are expenses justified? Unless there’s no way to include it, Floersch recommended that a narrative justification always accompany a line item budget. Without a budget justification, the burden of explanation within the proposal narrative increases exponentially.
  • Does it include resources from other sources? If other resources will support the program, funders want to know how much will be contributed, where they will come from, and whether they’re committed. Even when funders don’t have match requirements, they want to see the entire program budget, not just the portion you’re asking them to support.
  • Will supporting the proposed budget be a good social investment? Funders are in the business of social change and they want to know that the results you expect are worth the investment of their grant money. Is the program cost effective, given what it will produce?
  • Does it add up (and down and across)? Nothing screams carelessness and incompetence like a budget that doesn’t add up. Spread sheet formulas can get wacky. Check the math with a calculator and when you’re satisfied, get someone else to give it a shake. You can’t be too careful.
    The budget section of the proposal can be a huge plus or minus. It’s worth your effort to ensure it moves you closer to a win. © Copyright 2018 The Grantsmanship Center.

Making Sure the Proposal Budget is Thorough

The budget is a high-stakes, make-it-or-break-it section of your grant proposal. A thorough, logical, and clear budget is certain to increase your likelihood of winning an award. And an incomplete, illogical, and murky budget is just as sure to sink your chances.

“We become so immersed in developing the program and writing the proposal that we’re sometimes too close to the information,” said Barbara Floersch, is chief of training and curriculum at The Grantsmanship Center in Los Angeles, Calif. “It can be hard for those developing the budget to step back and realize what’s been left out, or what assumptions have seeped in.” 

Here are a few tips for ensuring that the budget is complete and clear.

* Do a line-by-line check. Have a knowledgeable person who’s not involved in proposal development read the narrative and the budget at the same time, side-by-side. The task is to make sure every item in the narrative that will require resources of any kind is addressed in the budget.

Your helper won’t just be looking for obvious items such as the salary of a direct-service staff member. That person will need to think deeply asking whether necessities such as supervision, professional development, office space, equipment, and travel are also included to support that position.

* Check the timeline. Most grant proposals include a timeline listing major program activities and identifying who will be responsible for completing them. “Check who’s responsible for tasks and make sure that’s reflected in the budget as part of the requested grant, as cash match, or as in-kind resources,” said Floersch.

* Think specifically about indirect costs. Operating a grant-funded program consumes organizational resources and when reviewing a proposal budget, it’s all too easy to focus myopically on direct program resource needs. “Dedicate some time to assessing the myriad internal services and supports the program will require and assess whether those expenses are adequately reflected and justified.”

After years of experience, grant professionals develop a third-eye ability to catching all expenses, defining them in a tight line-item budget and explaining them in a well-reasoned, concise budget justification. “But even it you’ve done it hundreds of times, don’t let down your guard,” said Floersch. “There’s not a grants person out there who doesn’t benefit from having a careful, knowledgeable person double check the budget against the narrative. Don’t cut that corner.” © Copyright 2018 The Grantsmanship Center

3 Tips for Developing a Program Budget

Budget planning is an integral part of program planning. “Think of the budget as the bones of the program,” said Barbara Floersch, chief of training and curriculum of The Grantsmanship Center in Los Angeles, Calif.

“Without the bones, the program can’t go anywhere. Never wait until the whole program is planned before figuring out what it will cost,” according to Floersch. To put the essential budget pieces in place, she offers the following three tips.

First, answer the following eight questions for every program activity, from direct client services to program support such as payroll administration. Answering these questions will help you hammer out line-item totals and related administrative support needs:

  • Who will do the work?
  • How long will it take?
  • What’s an adequate pay rate?
  • What supplies and equipment will be required?
  • What logistical support will be required?
  • Where will activities take place?
  • Will anyone have to travel? What will the reimbursement rate be?
  • Will the activity require supervision or oversight?

Second, ask yourself from where the resources will come. Will they be included as part of the grant request, be covered by other cash income, be supported by your organization’s general fund, or be contributed as in-kind donations?

Third, categorize expenses as direct or indirect. Some line items will be easily categorized, while others will be tricky. “Those decisions will be driven by your organization’s financial policies as well as the funders’ requirements,” said Floersch. “The structural and logistical support indirect expenses include are essential to a program’s success and to the health of your organization. Be sure to consider them because someone is going to have to pick up the tab.”

“Be thorough and price things out so that line items aren’t based on guesses,” said Floersch. Approaching the task this way will expose budget problems early so that you’ll have time to solve them or to make critical no-go decisions if financial complications you encounter will take more time to work out. © Copyright 2018 The Grantsmanship Center.

Fidelity Reports Upswing In DAF Grants

Donor-advised fund (DAF) account holders with Fidelity Charitable recommended $4 billion in grants so far this year (as of July 19), a 48-percent increase compared to the same period last year.

There have been approximately 668,000 donor-recommended grants to 105,000 charities this year. Contributions to the DAF also are up by more than 40 percent so far this year, compared to the same period in 2018.

For the calendar year 2018, there were $5.2 billion in grants, some $700 million more than the previous year.

For the fiscal year ending June 2018, Fidelity Charitable reported $10 billion in total revenue, including $9 billion in contributions, with net assets of $26.9 billion. The Internal Revenue Service (IRS) Form 990 was filed in May.

“The strong rate of grant activity from donors who use a Giving Account underscores how donor-advised funds have become a growing source of reliable nonprofit support during periods of uncertainty or market volatility, such as the dramatic market drop we saw at the end of last year,” Pamela Norley, president of Fidelity Charitable, said in a press release announcing the totals so far this year.

In its announcement, Fidelity noted donors who were able to be strategic with donations through the strategy of “bunching.” In anticipation of tax reform, which was quickly approved by Congress in late 2017 and took effect in the 2018 tax year, donors made larger-than-usual contributions to their giving accounts. Donors then will support charities for several years while taking advantage of the tax incentives as fewer individuals are itemizing their deductions because of the increase in the standard deduction.

Fidelity Charitable also added the cryptocurrency Ripple to the assets that can be donated. Since 2015, Fidelity Charitable accounts have contributed more than $106 million in cryptocurrencies. The vast majority of those contributions came during the height of bitcoin’s value in 2017 when $69 million was donated to Fidelity DAFs. An estimated $30 million was contributed via cryptocurrency in 2018 and $7 million in 2016.

Schwab Reports Grants Up By A Third

Donor-advised fund (DAF) accounts in Schwab Charitable increased the dollars granted by 33 percent and the number of grants by 26 percent in fiscal year 2019 compared to the previous fiscal year.

San Francisco, Calif.-based Schwab Charitable facilitated more than $2.4 billion in grants to more than 83,000 charities, with among the most widely support recipients similar to the previous year: Feeding America, Planned Parenthood, Doctors Without Borders, Campus Crusade for Christ (Cru) and Salvation Army.

More than 420,000 grants worth just shy of $2 billion were distributed during fiscal year 2018, which was a 20-percent increase over the 2017 total of $1.6 billion. Schwab Charitable operates on a fiscal year that runs from July 1, 2018 to June 30, 2019. The five-year average payout rate is about 17 percent annually, according to Schwab Charitable. The calculation is designed to approximate the payout rate for private foundations, by using priori year assets, to be able to compare different giving vehicles.

In its most recent IRS Form 990, filed in February for the year ending June 2018, Schwab Charitable reported contributions of $3.3 billion, grants of $1.8 billion and net assets of $12.895 billion.

“Thanks to strong market performance over the majority of the last 12 months and a growing familiarity with the relatively new tax law, donors found the 2019 fiscal year to be an especially good time to give,” Schwab Charitable President Kim Laughton said in a press release announcing the results.

More than a year after the Tax Cuts and Jobs Act (TCJA) was enacted, some donors also realized that they could benefit from “bunching” or concentrating their charitable contributions, including contributions of appreciated non-cash assets. Individuals who employ this strategy make charitable contributions in higher income years and then recommend grants to charities of their choice over time. This enables some donors to itemize charitable deductions in some years and benefit from the increased standard deduction in other years, according to Schwab.

Two-thirds of contributions to the Schwab Charitable were non-cash assets, including publicly traded securities, restricted stock, real estate and privately held business interests.

In fiscal year 2019, older generations with Schwab DAF accounts generally gave more, with greater frequency, on average:

Greatest Generation (born before 1946), recommended 12 grants, $12,000 each, eight charities;
Baby Boomers (1946 to 1954), 10 grants, $5,000 to seven charities.
Generation X (1965-1984): seven grants, $7,000, five charities; and,
Millennials (1985-2004): six grants, $4,000, three charities.

“Through our conversations with donors, we find that Millennials are particularly interested in increasing their impact by combining philanthropic giving with socially responsible investing,” Laughton said. “This younger, passionate donor cohort will re-shape philanthropy in the years to come,” she said.

Foundation To Let Community Decide On Funding

The Philadelphia Foundation announced a public voting period for finalists in its $1 million “Key to Community Grants” initiative, which begins next week. From July 8 through July 26, the general public will have the chance to vote and ultimately select nine winners from a list of published nonprofit finalists in the categories of Economic Prosperity, the Opportunity Divide, and Community and Civic Engagement.

The Key to Community Grant program aims to accelerate the impact of nine solutions that are working and can be scaled and sustained to meet a significant community need or opportunity. To vote, visit philafound.org/vote. Voting is limited to one ballot cast from any given IP or email address per day in each of the three categories.

“We’re thrilled that the public voting period for these incredible nonprofits is almost here,” said Pedro Ramos, president and chief executive officer of the Philadelphia Foundation. “This is a wonderful opportunity to bring together the entire Greater Philadelphia region to vote for inspiring initiatives that are based around building stronger communities. It’s also a chance for the public at large to learn more about the nonprofits that are moving our communities forward with innovative solutions. We encourage everyone to vote and tell their networks to vote and share their voices.”

The nine grants totaling $1 million will be awarded across the three categories: three first-place $200,000 grants, three second-place $100,000 grants and three third-place $33,000 grants. Leaders from the nine winning organizations will also be invited to participate in the Philadelphia Foundation’s Leadership Institute in the fall and will be included in opportunities for targeted leadership development scholarships and expanded professional network building, which will be supported by additional funds.

Nonprofits serving Philadelphia, Bucks, Burlington, Camden, Chester, Delaware and Montgomery counties for at least three years were eligible to apply.

Where to Find an Evaluation Consultant

When you need an evaluation consultant, you usually need one sooner rather than later. Your proposal narrative might require a high-level evaluation plan to be competitive. The report that’s due next month might require data analysis that’s beyond in-house capacity.
“Because program evaluation is an imperative of good management, and because grant proposals require a description of the program evaluation approach, nonprofit managers should establish a relationship with a well-suited evaluation consultant,” said Barbara Floersch, chief of training and curriculum of The Grantsmanship Center in Los Angeles, Calif. “If you wait until you need one to look for one, you’re likely to end up with a less than optimal match.”

    But where do you look for a consultant? Here are a few ideas.

  • Your colleague organizations might use professional evaluation consultants. If so, ask them with whom they work. Their consultants could also be a good fit for your needs or might be able to recommend other experts who will be a better fit.
  • City, county, state, or federal agencies that administer grants will know of evaluation consultants who are experts in their fields of interest. Reach out to staff members at these grantmaking government agencies and request contact information for consultants they know and trust.
  • Faculty members at near-by universities might have expertise in program evaluation. Even if they don’t do consulting, they could be able to recommend appropriate professionals who can help you.
  • Even private research firms that don’t specialize in your field of interest might be able to direct you to professional contacts that can help.
  • Check out the American Evaluation Association. Their website (www.eval.org) includes a “Find an Evaluator” function that might be helpful.

Before you begin contacting prospective consultants, be sure you’re clear on what you want from the relationship. “Having a professional evaluator as an arm’s-length member of your team will be a tremendous benefit to your organization,” said Floersch. “It’s worth the time it takes to find the right one.” © Copyright 2019 The Grantsmanship Center.

Grants: Finding The Right Evaluation Consultant

It’s almost inevitable that most nonprofits will need assistance from a professional evaluation consultant at some point. A funder might require that the program be evaluated by an independent expert.
A complicated program might be beyond in-house capacity to adequately assess. Involving an evaluation expert could give a proposal just the needed competitive edge. “Good evaluation consultants are worth their weight in gold,” said Barbara Floersch, chief of training and curriculum at The Grantsmanship Center in Los Angeles, Calif. “And since you’ll actually be paying that gold for their assistance, be sure you find the right one for your job.”

When selecting an evaluation consultant, due diligence requirements for any hiring apply. Studying resumés and checking references are a given. But to find a great fit, Floersch suggests considering these items as well:

Expertise in the field. An all-purpose evaluation consultant can offer a lot, but someone who’s an expert both in evaluation and in your field of interest can bring more value. Every field has its nuances, and unless a consultant understands them it’s easy to take the wrong approach. Interview with an ear toward the consultant’s understanding of the subtleties of your work.

Organizational Culture. A formal suit-and-tie approach might not be a good fit for a jeans and flip-flops organization. The norms and expectations within organizations vary and consultants who are experts in your field of interest can still be thrown off balance when confronting operational or management approaches that they perceive as foreign or wrong-minded. You’re not looking for a consultant-clone but you are looking for someone who can function optimally in partnership with your staff. Spend enough time with the candidates to understand how they’ll interact within your work environment.

Clarity of Reports. Ask to review a sample evaluation report. You’ll want to make sure the consultant can speak to you and your stakeholders in plain, understandable language and provide data assessments and reports you can use.

Interview deeply enough to get a sense of each consultant’s flexibility, responsiveness, timeliness, and sense of humor, all of which are invaluable assets in a working relationship. “Just remember, you’re in the driver’s seat,” said Floersch. “You’re looking for a partner to bring solid benefits to the project. You don’t want a dictator and you’re not looking for a savior. A well-qualified and well-suited partner is all you need.” © Copyright 2018 The Grantsmanship Center.

Impact After The Grant Is Gone

Some programs are designed to develop a product during the period of grant funding and be done. But the product itself is expected to continue generating impact after the grant funding ends.

For example, a systems-change program that results in a law to reduce pollution is, itself, expected to perpetuate the impact.

    “In these sorts of grant proposals, organization leaders often describe the product they’ll produce and leave it at that,” said Barbara Floersch, chief of training and curriculum for The Grantsmanship Center in Los Angeles, Calif. “But every proposal is obliged to include a discussion of how impact will be continued beyond grant funding and these sorts of proposals are no exception.” They should include:

  • Systems Change. Ensuring that a new law, regulation, or system continues to provide benefits requires some degree of monitoring. “We’re all familiar with laws and regulations that don’t get enforced,” said Floersch. An existing citizen volunteer group might commit to monitoring enforcement of a law. A parent’s group might commit to watchdog a new school regulation. Your organization might not be the long-term keeper of the key, but your proposal should show a partnership with others who can provide ongoing monitoring.
  • Planning. When a grant funds a complex community planning effort, the result is a well-supported plan of action. Even though the purpose of the grant was to produce the plan, your proposal should provide some assurance that it will eventually result in action. You might not have all the answers when submitting the proposal, but you need to lay out at least a bare bones expectation of how the plan will be brought to life. That often means making sure that the right players are involved and that they express commitment to implementing the plan once it’s in place.
  • Equipment. The new computer lab, medical machine, or other equipment purchased with a grant is expected to deliver benefits for years. The computer lab will become useless without maintenance and repair. Without updates, the medical equipment will become outdated. Equipment ages quickly so be sure your grant proposal includes a plan for maintaining, repairing, and upgrading equipment beyond the period of grant funding.
  • Facilities. Buildings are expected to provide long-term benefits, but because they require maintenance and repair your grant proposal should tell the funder how you’ll cover the expense. If you’re replacing an old facility that’s costly to maintain, your current maintenance budget may be more than adequate. But if you’re establishing a new facility, how will you pay for long-term maintenance and repair? Perhaps you’ll rent out conference rooms or extra office space.

When the grant proposal includes a description of how you’ll ensure the protection and maintenance of the product produced with grant funds, you’re assuring the funder that the grant award will be a solid investment. © Copyright 2019 The Grantsmanship Center.