Nonprofits large and small must strategically marshal resources to ensure that they have staff, resources and capacity to accomplish their goals. Such challenges are magnified when nonprofits take on systems change work where powerful opponents are arrayed against them. Often under-resourced and outgunned, nonprofits need strategic philanthropic support to punch above their weight.

At FJC – A Foundation of Philanthropic Funds, we have worked with imaginative donors to structure revolving accounts (essentially, variations on Donor Advised Fund accounts) with a goal of empowering nonprofits to take on significant campaigns and projects. Such arrangements can be incredibly catalytic, giving nonprofits the confidence to move forward on complex projects while mitigating financial risk. Also, by prioritizing activities with a high likelihood of recovery, these structures create the potential for donors to amplify their impact, revolving their funds so that the same philanthropic dollar can have multiple impacts on multiple projects.

Revolving Funds in Practice with SELC

A case in point is our work with the Southern Environmental Law Center (SELC), a 35-year-old nonprofit organization active across six states. As a regional leader, SELC occupies the space between the large, national (and often well-resourced) environmental nonprofits like the Sierra Club and Natural Resources Defense Council, and local, grassroots groups often run by dedicated volunteers. This enables SELC to engage effectively on the local, state, and federal level, always informed by the players, politics, landscapes, and communities in this pivotal region.

To achieve their mission, SELC uses a broad array of law and policy approaches including strategic litigation which can be expensive and resource intensive. Some of SELC’s high-stakes legal battles continue on for years, a decade, or more. In addition to requiring tens of thousands of hours from SELC staff, such cases require the paid services of outside experts. Very often it is scientific or economic arguments that win the day.

Enter an anonymous donor at FJC. The donor worked with FJC to create an account where charitable grants to SELC are deposited and from which SELC can draw funds specifically to pay for direct litigation expenses (like expert fees) in potential fee-recovery cases. Periodically, when SELC wins a case and recovers attorney fees, they make a deposit back into the FJC fund to replenish it in the event of future need. To date, SELC has drawn approximately $1 million from the revolving fund to pay for professional experts and other direct litigation expenses. With an incoming payment of fees recovered from SELC’s landmark Atlantic Coast Pipeline litigation, SELC will have redeposited some $270,000 back into the fund.

Read the full article about revolving funds by Sam Marks at The Center for Effective Philanthropy.