In the midst of the COVID-19 pandemic crisis, we’ve witnessed communities move quickly to save jobs and lives, nonprofits scale programs over night to meet increased need, and incredible partnerships form between governments, corporations, and nonprofits. Many of these programs would be impossible without an innovative philanthropic tool called a recoverable grant.
Recoverable Grants 101
What is a recoverable grant?
Recoverable grants provide funds to the causes you care about when they are most critically needed and returns funds to your philanthropic account when permanent support or revenue arrive. Recoverable grants provide you with the opportunity to amplify the impact of your grant-making.
Why use a recoverable grant?
Recoverable grants may be used when there is a reasonable expectation of repayment and the charitable funds further the mission of the nonprofit.
The three most common ways we see donors use recoverable grants are to:
Bridge gaps: Frequently nonprofits have grant dollars committed from government sources, donors, or foundations that may be given at a slower pace than the growing needs. Giving a recoverable grant accelerates how quickly a service is delivered.
Grow programs quickly: Revenue-generating services provided by nonprofits have seen an increase in demand with the healthcare needs and rising unemployment resulting from COVID-19. To meet demand for more staff and supplies, a recoverable grant supports the up-front investment necessary for these programs to grow.
Expand charity goals: A recoverable grant can support research and development at nonprofits, such as testing out a new program or business line; or committing to vaccine research.
Why do DAF donors like recoverable grants?
Recoverable grants begin a granting cycle that continues when you re-grant charitable dollars returned from one recoverable grant. This frees up funds to support another charity. The potential for recovering funds allows you to expand your annual giving while retaining the long-term giving power of your donor-advised fund account.
Explore recoverable grants opportunities from our partners at CapShift
COVID-19 related health outcomes
Economic Relief - U.S. (National) & developing countries
Economic Relief - U.S. (Local)
Long-term recovery for communities most impacted
How do I get started?
Premier accounts should contact their representatives to identify recoverable grant opportunities, determine suitability and begin the review and approval process. Upon approval, donors will be asked to complete a Recoverable Grant Agreement Recommendation Form that will be submitted to Vanguard Charitable for approval. CapShift fees will apply.
How long does the process take?
Recoverable grants are more complex than a typical grant. Depending on the specifics of the opportunity, processing a recoverable grant can take up to several weeks.
What is the minimum grant size for a recoverable grant?
Because of the nature of these grants and the additional reporting burdens on grant recipients, Vanguard Charitable requires a $25,000 minimum grant size.
What happens if a grantee does not repay the recoverable grant amount?
Recoverable grants are meant to be flexible and are primarily a charitable endeavor. Recoverable grants are only repayable under certain circumstances, and in most cases, grantees are not obligated to repay the grant.
Are recoverable grants considered investments?
Due to the forgivable repayment terms, and the fact that most of the recoverable grants have no or a low interest rate, recoverable grants are considered a grant rather than a loan.