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Better Together: Understanding Grantmaking at the Fayette Community Foundation

Have you ever wondered where the Fayette Community Foundation gets the funds to make grants to our local nonprofit organizations? The answer is pretty simple: we get those funds from generous donations. The mechanism behind it is a little complicated, but it’s well worth the explanation. Let me break it down for you and you’ll see how our community foundation transforms endowment funds into grants that make a significant impact on our community. Our grantmaking process is not only a testament to the generosity of our donors but also a reflection of our commitment to ensuring long-term, sustainable support for a variety of causes within Fayette County.

The Role of Endowment Funds

Endowment funds are the cornerstone of our grantmaking efforts. These funds are essentially donations that are invested with the goal of creating a permanent source of income. With careful management, the proverbial “well” never runs dry. This allows us to provide ongoing support to the community, ensuring that the impact of each donation is felt not just once, but year after year.

There are two primary types of endowment funds that support our grantmaking:

Field of Interest Funds: These funds are designated to support specific areas of community need, such as education, healthcare, arts and culture, or the environment. Donors can choose to contribute to a field they are passionate about, knowing that their funds will support relevant projects and initiatives that mean something to them or their families. 

Community Impact Funds: These flexible funds allow us to address the most pressing needs in the community as they arise. Contributions to these funds provide the foundation with the ability to respond to emerging challenges and opportunities. Currently, donations to our Community Impact Funds are being matched 2:1 by Lilly Endowment Inc., significantly amplifying their potential impact. Your donation can make triple the impact thanks to this collaboration.

How Donations Become Grants

The transformation of donations into grants is a meticulous process grounded in financial stewardship and strategic planning. Here’s how it works:

1. Investment of Donations: When donations are made to our endowment funds, they are pooled and invested together. This pooled investment strategy allows us to diversify our portfolio, manage risks effectively, and maximize returns.
2. Annual Calculation: At the beginning of each year, we calculate the amount available for grantmaking from each individual endowment fund. This calculation is based on 4% of the average balance of the fund over the past five years. This approach ensures that the grant amounts are stable and predictable, providing reliable funding for community initiatives while preserving the principal of the endowment.
3. Grant Distribution: Once the available amount is determined, our team works diligently to distribute these funds through our grantmaking programs. We solicit grant applications from local non-profits and community organizations, carefully reviewing each one to ensure they align with our mission and the specific goals of the endowment funds.

The Impact of Our Grants

Our grantmaking process ensures that the generosity of our donors has a lasting and meaningful impact on Fayette County. Through Field of Interest Funds, we support targeted projects that address specific community needs, from support for educational programs to health initiatives and cultural programs. Community Impact Funds allow us to be responsive and adaptive, tackling urgent issues and seizing opportunities as they arise.

Moreover, the current matching program by the Lilly Endowment for our Community Impact Funds means that every dollar donated is effectively tripled, significantly enhancing our ability to support vital community projects.

At the Fayette Community Foundation, our mission is to enhance the quality of life in Fayette County through thoughtful grantmaking. By leveraging the power of endowment funds, we ensure that each donation not only supports today’s needs but also builds a brighter future for generations to come. We are deeply grateful to our donors, whose vision and generosity enable us to make a lasting difference. Together, we are building a stronger, more vibrant community.

If you would like to join us on this mission – and work with donors from the past, present, and future – you should consider contributing to our endowments. Please contact us at info@givetofcf.com for more details on how to make an impact on Fayette County.

-Abigail Roszell, Executive Director, Fayette Community Foundation