As the year comes to a close, advisors and donors alike are thinking about year-end strategies that set the stage for meaningful, legacy-building impact.
What Are Recoverable Grants?
Recoverable grants allow donors to support high-impact organizations while maintaining the possibility of recovering funds if specific conditions are met. This approach offers a unique opportunity: donors can make a meaningful difference today and keep their philanthropic options open for tomorrow. Particularly, helpful for a donor who is still defining what they hope their legacy will be.
Turning Interest into Action
Many clients are motivated to take action at year-end but may feel cautious or overwhelmed. Recoverable grants are an excellent entry point for clients who are new to philanthropy or hesitant about larger commitments. Recovery of funds is not guaranteed, but the potential is there, offering some optionality.
For instance, a client considering a grant to a nonprofit they’re unfamiliar with may feel uncertain about long-term support. By using recoverable grants, they can make an impactful contribution while getting to know the nonprofit better, offering a win-win solution for both donor and nonprofit.
Here are some benefits of recoverable grants to highlight when discussing with clients:
- Flexibility: Donors can test new giving strategies, support innovative initiatives, and reallocate grants without increasing their overall philanthropic budget.
- Optimizing impact: By recovering and reallocating grants clients can support multiple initiatives over time, making their philanthropic capital work harder.
- Long-term legacy planning: For donors looking to create lasting impact, recoverable grants can become part of a broader strategy with the possibility of replenishing donor-advised funds or other vehicles for ongoing giving.
Helping Clients Get Started with Recoverable Grants
If your clients already use donor advised funds, many of these programs offer curated menus of recoverable grant opportunities. These options span a range of causes, including climate solutions, affordable housing, community development, and more.
A pre-vetted menu makes it easy to start meaningful conversations with clients about their values and philanthropic goals – look through the list to see what charitable areas of interest, geographies, or terms might be relevant to them, and eliminate things that don’t appeal to your clients.
Advisors have a unique opportunity to introduce recoverable grants to their clients as a versatile tool for maximizing philanthropic impact. Whether your clients are seasoned philanthropists or new to giving, recoverable grants can serve as a flexible option for year-end contributions.
Ready to explore recoverable grants? Find out more from CapShift’s resources or contact us to learn how we can help you guide your clients toward impactful giving this season.
