October 5, 2017
By Brad Caswell
One thing that sets Vanguard Charitable apart from other donor-advised funds is our $500 grant minimum. Donors occasionally inquire about this policy, asking if they can give in smaller increments. We take this feedback to heart, as we aim to always be responsive to our donors’ needs–our goal, after all, is to provide the flexibility and control you need to facilitate your philanthropic strategies as effectively as possible. At the same time, the $500 minimum reflects a strategic decision on our part to remain committed to our overall mission: Increasing philanthropy and maximizing its impact over time.
The vast majority of the nonprofits that we work with are quick to assert that all donations are welcome. That said, we recognize that costs involved in processing each contribution include time, resources, and manpower. With nonprofits often already operating on trimmed-down budgets, lean staffs, and striving to provide the most dollars to their mission, it can be much more efficient to process one $500 gift than ten $50 gifts. Larger gifts are also especially valuable for securing long-term goals, planning and budgeting for the future, providing a major boost during down times, encouraging others in matching challenges, or helping to get big campaigns started or over the top.
In its 2016 High Impact Giving Guide, The Center for High Impact Philanthropy speaks of a “philanthropic portfolio” to refer to the different tools at your disposal for supporting nonprofits. Different giving vehicles have different advantages and applications. For example, it is not uncommon to give a $100 direct gift to a new charity to show support, while buying time to further evaluate their performance and impact before committing more resources. In this case, direct giving may well be the most suitable approach. Recommending a grant of $500 or more through Vanguard Charitable, on the other hand, achieves different goals. In addition to reducing charities’ expenses, larger gifts lower our administrative costs, which lowers your cost of using a donor-advised fund for your philanthropy. Less overhead to run Vanguard Charitable ultimately means more money for charities and helps us realize our mission to maximize philanthropy.
Strategic grants are vital for a charity’s long-term planning and budgeting, and can provide a major boost during down times and campaigns.
Grant size was in fact a frequent topic of discussion in recent feedback from our partner nonprofits. One charity reported, “A larger donation indicates a significant commitment to the organization, which honestly makes us feel appreciated in our work and secure about being able to continue it.” Another nonprofit shared an alternate view, reflecting on the $10 contributions they received, and how appreciative they were for the heartfelt support from passionate donors.
I would be remiss in not mentioning that contributions of any kind–time, talent, or treasure–can play a critical role in the nonprofit industry. One of the tools that I value most in my own “philanthropic portfolio” is not financial in nature at all: By donating blood platelets to the Red Cross every month, I support cancer victims, a cause I am close to through challenges faced by friends and family. We all–charities included–want any assets we donate to be used to maximum value and effect in support of charitable missions.
Yet when it comes to financial contributions, there is a persistent need for substantial funds to support all manner of nonprofit work and goals. This is where a donor-advised fund operates most powerfully, and we believe that our $500 grant minimum empowers our donors to think strategically, and allows charities to operate effectively.
Brad Caswell is Chief Operations Officer at Vanguard Charitable.