November 28, 2022

The Gift That Keeps on Giving

Community foundations encourage generosity this season
By Jillian Manning | Nov. 19, 2022

In 2020, U.S. nonprofits and charitable organizations saw a record of $466.23 billion in charitable giving, largely in response to the COVID-19 pandemic. According to the Lilly Family School of Philanthropy—an arm of Indiana University—2021 topped the charts again with $484.85 billion. (Though, with inflation, that 2021 number was actually 0.7 percent behind its predecessor.)

November and December are typically the most popular month for charitable donations, but with a seesawing stock market, rising inflation, and a decline in urgency as nonprofit pandemic woes fade, what will giving look like this year?

The Grand Traverse Regional Community Foundation
The Grand Traverse Regional Community Foundation (GTRCF) has served Antrim, Benzie, Grand Traverse, Kalkaska, and Leelanau counties for more than 30 years. They act as a connection point between donors and nonprofits, pooling resources to be distributed as grants and managing endowments and funds throughout the five-county region.

Dave Mengebier, the foundation’s president and CEO, says that so far, 2022 has been a touch behind pace for giving. “Through the third quarter, we’re approaching about [$1.5] million in gifts to the community foundation. … That is a little slower than we’ve seen in the last few years.”

Mengebier adds that recessions, economic downturns, and market volatility don’t usually have as big or immediate an impact on community foundations as they do on individual nonprofits, and that he’s optimistic that with the biggest giving months ahead, there’s still time to reach the foundation’s 20-year average of about $2.5 million in gifts.

Where does that money go? GTRCF has more than 340 funds, including 101 scholarship funds. This year alone, they’ve awarded $3.3 million in grants and scholarships throughout northern Michigan. Grant dollars support organizations geared toward the arts, health and human services, animal welfare, community development, the environment, education, and other areas of interest. There are also general community funds focused on each of the five counties that can address emerging needs other funds aren’t meeting, like attainable housing, youth mental health, or childcare.

One of the newer additions to the GTRCF portfolio is the Diversity, Equity, and Inclusion Fund, which, since its inception in 2021, has given out more than $50,000 in grants to DEI-focused organizations, businesses, and programs. Another new endeavor took form this year, giving the foundation a chance to give more support to capital projects in NoMi with partners Venture North and Northern Initiatives.

“Our board of directors just adopted a new policy under which we’re going to carve out $2 million from our endowed portfolio for impact investing,” Mengebier says. “So this is making low cost capital available to small businesses and nonprofits across the five-county region. … We’re not just investing on Wall Street; we’re investing on Main Street.”

This form of impact investing will have both social and financial return, according to Mengebier, who believes that investing in the small business community helps ensure northern Michigan has a viable economy.

The Otsego Community Foundation
The Otsego Community Foundation (OCF) also started a new fund this year, albeit one they never expected. After the May 20 tornado tore through parts of Gaylord and the surrounding area, OCF created the Tornado Response Fund, which has since received $1.5 million in donations and already granted $900,000 back into the community for everything from home repairs to temporary lodging to case management programs for survivors.

While shifting gears to disaster relief was a necessary move, OCF Executive Director Dana Bensinger said it came at a cost for the foundation and for other nonprofits in the region.

“At least 10 weeks of our year were all 100 percent focused on the tornado. It had to be, but that meant we weren’t doing the other things in our business. And especially some of our smaller nonprofits, they weren’t raising money to do their regular mission. So I’m super concerned about them moving forward,” she says.

The ripple effect is still being felt. Bensinger explains that in October, Otsego County saw a spike in people experiencing homelessness as the weather changed. While this is the type of urgent need the foundation would usually work to support, they had spent their discretionary funds for the year and couldn’t reallocate money from other areas to address the issue.

When asked what she recommends to help make up funding gaps like that, Bensinger’s answer is simple: “I would just encourage people, if they love a nonprofit and are thinking about giving a gift, give unrestricted gifts so that organization can do whatever they need to do. … Right now, nonprofits need to be flexible and nimble.”

Bensinger adds that the best part about giving an unrestricted gift is that it allows a nonprofit or community foundation to “not only meet the ever changing needs [of a community], but capitalize on opportunities that can move us forward.”

Giving in 2022
So that brings us back around to the question of giving. Will 2022 shatter the charitable donation record once more? CNBC reported in September that “despite economic uncertainty, some donors may be eyeing bigger gifts for 2022, according to a study from Fidelity Charitable,” a public charity connected to the financial institution. The study found that nearly 6 in 10 people were considering donating more this year because they were concerned about their communities and neighbors being under economic pressure.

Bensinger stresses that people should give to organizations they trust. If you’re new to giving or thinking about supporting a nonprofit for the first time, she says monthly donations—even if it’s just $20 per month—can make an impact. She likens this style of giving to today’s popular subscription model and jokes it’s a great way to “date” an organization before deciding if you want to get serious with them.

She also recommends knowing what your dollars are doing and where they can make the biggest difference. “One of the beautiful things about community foundations is, because you’re working with many different donors, you have a collective impact,” she says.

Mengebier agrees. “I describe it as long after [we] are gone, those funds that are endowed will continue to be supporting organizations and causes that we care about. And it’s that sense of legacy and forever that is really what distinguishes community foundations from other types of philanthropy.”

Both say that if you love a particular nonprofit, give directly to them. (Though Mengebier notes that many foundations have funds for specific nonprofits.) If you are more interested in a cause or area of impact, a community foundation could be a better fit for your donation.

To illustrate the concept, Bensinger likens a community foundation to a brick and mortar structure. The bricks are individuals, businesses, donors, nonprofits, and community groups, and the community foundation is the mortar that brings them together through investments, grants, and connections.

“In part, we’re here as a service to donors, large and small, who want to have impact,” Mengebier explains. “If we look around our five-county region, then we’d know virtually every nonprofit leader and nonprofit organization in the region. So when you want to have an impact on education, or social welfare and health, or youth and family programs, then we partner with you to help you ensure that your dollars are going to have the biggest impact that they can have.”

***

GTRCF’s Youth-Led Grantmaking Program

Looking beyond 2022, the next generation of nonprofit leaders are cutting their teeth on a grantmaking program offered by the Grand Traverse Regional Community Foundation. The program allows youth in the region to “be decision makers for youth issues, needs, and opportunities” by reviewing grant applications and recommending grant awards.

We asked one of the program participants, high school junior Jürgen Griswold, a few questions about his experience.

Express: What has been the best part of the program so far?
Jürgen: The best part of the program for me is when we do site visits towards the end of the year. It is always great to see what the organizations do with the grants that we give them. I find it interesting to learn about the background of these programs, and with the site visits, you get to see what really happens rather than just hear it from them during the grantmaking process.

Express: What have you learned about your community by participating?
Jürgen: Being in this program I have learned about the problems that my community faces, and I am lucky that I have a chance to help fund programs that try to help with some of these problems. Some of the programs that stick out to me are ones that help with family grief or food pantries.

Express: What are you most excited about working on as the program progresses?
Jürgen: As the program progresses, I am excited to get more youth to join in. I love being able to teach them about what we do and watch as they learn and get excited about the whole process of grantmaking.

Express: Do you think the skills you’re learning in the program will help you in the future?
Jürgen: Not only does YAC teach us about philanthropy and giving back, but it also gives us real life experiences in grantmaking. We have to be able to communicate with the other members to come up with a decision on who to give money to, and I think that the ability to communicate your thoughts is a very important skill to have and will be useful to me in the future.

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