In December, The Healing Trust reached a resolution to our five-year legal dispute with the Pension Benefit Guaranty Corporation. The resolution, which included paying out 15% of our endowment, allows us to continue furthering our mission thru strategic philanthropy, impact investing and advocacy.
This reduction in our endowment means that The Trust must change the way it operates, both internally and externally. Before we considered any changes that affected our grantees, we reduced our operating budget by 23%. While I wish that were enough, it is not, and cuts to our grantmaking are necessary. We are dipping into our endowment further to delay these changes until the third quarter of this year (applications due in July) to give our impacted partners 6-12 months to plan for these changes.
The Trust’s board and staff have worked since December to be thoughtful, compassionate, and transparent in our approach and considerate of the impact it will have on the nonprofits that we so proudly support. We considered many options – including not making any changes and just making each of the cycles far more competitive; however, we felt that this was unfair to our grantees to invest time in a process that may not yield the results they need. The changes announced today reflect a 22% reduction in our annual grantmaking budget.
To make these tough decisions, we remained grounded in our strategic plan, pulling in our grantee’s feedback from our Culture Café and the grantee survey that was conducted by the Center for Effective Philanthropy about what you value about The Trust. Be assured, we are not changing our core values or bedrock beliefs and remain passionately committed to healing and wholeness for vulnerable populations.
Our Board approved these changes less than two weeks ago; we wanted to get this information to you as soon as possible. Here’s what you need to know . . .
Timeline
To give our affected partners time to plan, we dipped into the endowment of our trust to delay changes until our Q3 cycle this year. Unless noted otherwise, these changes will be the way The Trust operates for the foreseeable future.
Changes to Eligibility
The Trust made three major changes to eligibility. First, our Physical Health grants will only fund direct patient care, caregiver respite support or health system navigation through the Get Covered TN initiative. Second, organizations with operating expenses over $20 million are ineligible. Third, at least through May 2018, only organizations who received at least one grant from the Trust since January 2014 are eligible to apply. This means that we will not be able to accept new applicants at least through Q2 of next year and as such will not hold the mandatory introductory workshops in the upcoming year.
Reduced Grant Amounts
Transom grants are now capped at $40,000, and our operating grant caps are reduced 10%. For the new operating grant caps, please visit our updated website here. Consequently, most organizations impacted by these two changes will experience a $3,000-$7,000 reduction in their grant amount.
Small Grants
In addition to these changes, small grants will move to a quarterly grant cycle. Our program team will contact each grantee in this category with further details.
Technical Assistance
While we are reducing our grantmaking, we are increasing our nonmonetary support. Our office space will continue to be available for free to area nonprofits for meetings and retreats. We will continue to offer our complimentary Healing for the Healer Retreats ten times a year. For any grantee since January of 2014, you will also be eligible for our leadership programs, Nonprofit Excellence Funds through the Center for Nonprofit Management, sabbatical grant eligible (if you meet the other criteria), and our expanded technical assistance program. Starting this month, we are offering 1-2 opportunities for our grantees to receive technical assistance thru workshops, consulting, and convenings, like our Legislative Updates Workshop on March 3 and our Consulting Office Hours on March 10.
The Trust’s grant cycles generally have about an 85% approval rate. We hope to keep a similar approval rate during this time, so incorporating the feedback received from prior grant applications and in the preliminary review with staff continues to be important.
Communication
Current grantees impacted by the eligibility changes or receiving a more than $10,000 grant reduction received a personal phone call from a Trust staff person to discuss their situation one-on-one. Current grantees facing a reduction $10,000 or under attended an updates meeting with Trust staff today where this information was shared with them. If any grantee partner has further questions or concerns about these changes, please feel free to check out our updated website, schedule to attend our Consulting Office Hours on March 10, or contact your program staff person directly. For an updated list of program staff and their grantee categories, click here.
Please know that all of us at The Trust realize that these changes are difficult. The changes will be an adjustment for all of us. We appreciate your understanding, but mostly we appreciate the amazing work you are doing in our community to make it a better place to live, work, and play. We are honored to have played a small part in your work, and we look forward to continuing to support it, just in different capacities.
With the kindest of regards,
Kristen