As a foundation or endowment fund, how do you choose the frequency of your commitment to supported associations? What is the impact of a multi-year donation commitment? What are the constraints?
If you are an individual donor to an association, you may be familiar with regular giving, also known as monthly giving.
The benefits cited by fundraising campaigns - via direct marketing or street fundraisers are multiple:
For the charity, it provides a regular source of funding, allowing them to better plan the scope of their programs and to better meet the needs of beneficiaries.
For the donor; no need to remember to donate every month or quarter, it will be deducted automatically from your bank account. This format can also allow you to make a larger donation because it’s broken down into smaller installments ( for example,100€ per month may seem more affordable than 1200€ all at once).
But what about a donation made by your foundation or endowment fund? Direct debit donating is not authorized for foundations or endowment funds, but it is entirely possible to commit to a charity organisation over several years via a donation agreement.
And a multi-year donation from a foundation or endowment fund can have as much a positive impact as that of an individual - for the association, but also for you and your foundation or endowment fund.
What do multi-year donations offer ? They provide:
Effective and productive partnerships with associations. This type of support allows you to get to know the supported charity on a deeper level - their teams, and their working methods. This can lead to a better understanding of program delivery strategies and hurdles, and therefore improve collaboration via non-financial support offerings (coaching or mentoring for example).
Stability for associations: multi-year donations provide charities with a stable financial base that allows them to stay focused on their programs and beneficiaries, rather than spending time looking for funding.
A better understanding of the problem you wish to address. You will be able to follow the beneficiaries, their progress and better understand their needs, which will allow you to better target your donations in the future.
All this does not mean that a one-time donation is not useful. What is a one-time donation? This is a one-off donation for a specific structure, program or event.
What do one-time donations offer? They:
• can serve as catalysts for specific short-term projects. They are particularly suited to financing special events or urgent needs (responses to natural disasters for example);
• allow foundations to diversify their areas of intervention by testing new ideas/solutions and mission areas without committing over an extended period.
• Allow for a foundation to test a partner with a new association before engaging in a multi-year partnership.
Ultimately, foundations can use both approaches by integrating them jointly into their overall strategy.
The important thing is to align these choices with the mission and fundamental values of the foundation, and also with the issue that is being addressed.
For example, when your mission is geared to addressing problems that require systemic change or chronic societal problems, a multi-year approach will give your foundation a better chance to test possible solutions and make a real difference.
Not sure how to position your giving strategy? Please don't hesitate to contact me, I would be happy to chat with you.
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