Donor-advised funds have made a significant impact in philanthropic giving over the past decade. These organizations also contribute significantly to a community foundation. The fluid nature of community foundations makes it imperative that they are able to stay in touch with donors and ensure they are using their assets properly. Grant management software can be an especially effective tool for these foundations.
Over the past decade, donor-advised funds have grown more than 10 percent each year, and contribute about 50 percent of the assets and grants at the community foundation, according to a report from nonprofit consulting firm FSG. On average, 73 percent of community foundation assets come from donor-advised funds.
This means community foundations often rely heavily on this donor group. While in the past, donors mainly contributed funds to these organizations and nothing more, perspectives now are changing. Donors are discovering they can be more effective if they are more strategic about their giving. Consequently, the survey found that community foundations have multiple expectations of donor-advised funds. For instance, they expected them to increase assets that would benefit the community, promote grantmaking to local groups, create partnerships to support community needs, and more.
When donors are engaged, the community foundation can increase funding and promote local efforts that are in line with funder goals.
How to keep donors engaged
When it comes to dealing with donors, communication is very important. Donors that are engaged with the foundation they support can help these organizations advance their missions and raise awareness of their activities. According to a report from Council on Foundation and CF Leads, donors who have a greater awareness of what is going on at the foundation they support may also be able to serve in leadership positions, expand networks and work with foundation to increase skills and understanding of local issues.
Maintaining consistent communication with donors is very important. Foundation needs to be very responsive when asked questions about what funding is being used for and whether the efforts are successful. Grant management platforms can help foundation maintain data about grants made in the past and allow them to more easily provide this information.
There are also other ways to keep donors engaged. Some foundations have frequent gatherings to keep in touch with donors. Even potential donors may be invited. As an alternative, community foundations can send out e-news to donors or create a library of data and reports online so donors can remain informed of grantmaking activities.