How a Community Foundation Increased Its Grantmaking Five-Fold To Meet Need

Growing up in small-town South Dakota, my family only used the word “foundation” in relation to my dad’s home improvement business. The world of philanthropy and nonprofit organizations was not so much foreign to me as it was wholly unknown.

Later, as a lower-income person with too much college debt and too little savings for my dream of attending graduate school, my eyes were opened to the world of philanthropy by critical support from the Bill and Melinda Gates Foundation/Gates Cambridge Trust and the Rotary Foundation. These scholarships literally transformed my prospects and ultimately led me to my current role as president of, yes, a foundation — namely, the Initiative Foundation, which advances community and economic development in Central Minnesota. Now, my team and our partners are working on a transformation of another kind, namely in the way we assist our region’s nonprofits and for-profit businesses amidst the ongoing challenges of the COVID-19 era.

Since its creation in 1986 as one of six sister organizations supported by the Minneapolis-based McKnight Foundation, the Initiative Foundation has had an out-of-the-ordinary diversified business model. We combine under one roof the traditional donor-led grantmaking work of a community foundation, small-business lending and training as a Community Development Financial Institution certified by the U.S. Treasury, and a number of in-house programs related to child care, leadership and entrepreneurial development, and nonprofit capacity-building that fill gaps in our rural region’s landscape of services.

The onset of COVID-19 motivated us to get even more out-of-the-ordinary. My colleague Zach Tabatt runs our Nonprofit Academy (NA) capacity-building program and traditionally has supported area nonprofits through in-person trainings related to strategic planning, board and staff development, and refining organizational business models. One thing he saw early in the pandemic was the effect of social distancing on our nonprofits’ delivery of critical community services and their ability to raise funds, particularly if in-person galas and other large events were a significant source of income. So, in response, we pivoted our Nonprofit Academy curriculum to virtual delivery and revised the curriculum to focus on major-gift fundraising from individuals using safe, remote outreach options, such as Zoom and phone. The training also included preparedness to access potential governmental recovery resources, all with an eye toward closing the gap left by cancelled in-person events.

In May of 2020, we paired this training with our discretionary grantmaking and offered small fundraising challenge grants that coincided with a statewide giving week. As a result, our cohort of small, rural organizations that had little experience with online fundraising was able to raise more than $34,000 in one-week — a notable figure amidst lockdowns and financial uncertainty.

Since then, we’ve further customized our fundraising school to “meet nonprofits where they’re at,” as Zach likes to say. As a result, our most recent cohort of participants raised more than $1 million, which it’ll use to meet urgent nutritional, educational and other needs of people across our region.

In addition to our efforts to help nonprofits directly access COVID-19 response and recovery resources, we also observed that many of those resources would pass our region by entirely without an intermediary to secure and then re-grant the funds using more localized knowledge. Governmental funding sources are, of course, not without various strings attached, and that can be a deterrent to some would-be intermediaries. But our finance and programmatic teams have strong track records as trustworthy stewards of public funds. So we actively worked to attract recovery resources both from governmental and philanthropic sources, and then we distributed those funds to COVID-19-impacted nonprofits and small businesses in our region.

As a result, our 2020 grantmaking totaled $10 million — perhaps not a large sum by some standards — but it was five times our organization’s typical annual total and thus warranted the “gi-grant-a-saurus” term playfully applied by our staff. Meanwhile, our five sister organizations undertook similar efforts in their respective regions, such that our group has collectively granted and/or loaned more than $60 million across Greater Minnesota, excluding the Twin Cities metropolitan area, since the onset of the pandemic.

Regrettably, the COVID “crisis” has dragged on to become the COVID “era,” and further adaptations and transformations will undoubtedly be required by all of us. Just as philanthropy transformed me, my team and I will continue listening to our partners as we adapt and transform the way we serve our region.