1. Who We Are
2. How We Work: Grants
3. How We Work: Loans and Guarantees
4. How We Work: Direct Charitable Activities
5. Lobbying and Political Campaigning

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1. Who We Are

1.1  Who were Gaylord and Dorothy Donnelley?

Gaylord Donnelley was a grandson of the founder of the R.R. Donnelley & Sons printing company, which by the late 19th century was one of the most-successful businesses in Chicago. Born in 1910, Gaylord in 1935 married Dorothy Ranney, also a member of a prominent Chicago-area family. Gaylord spent his working life in the family business, interrupted by a stint in the Army Air Corps during World War II; by the early 1950s he was running the company, and he retired as chairman in 1975. In late 1952 he and Dorothy created and funded this charitable foundation, though they also continued to make significant direct contributions to various causes and institutions. Bequests from both Gaylord (who died in 1992) and Dorothy (who died in 2002) significantly increased the foundation’s endowment. Brief and detailed histories of the foundation can be found here. 

 

1.2  Is this foundation related to the Donnelley printing company?

The foundation and the company have always been legally separate, though from the 1950s to the 1970s many of the same individuals held leadership positions in both. Today there is no specific connection at all, as the printing company went public some time ago and the foundation has diversified its investment portfolio beyond Donnelley company stock.

 

1.3   Why do you call yourselves the “Gaylord and Dorothy Donnelley Foundation” instead of just the Donnelley Foundation?

There is a separate private foundation in Chicago called "The Donnelley Foundation," founded in 1957 by cousins of Gaylord Donnelley. Also, the printing company’s corporate grantmaking program is called the "RR Donnelley Foundation." In lists of contributors we request that grantees always specify "Gaylord and Dorothy Donnelley Foundation."

 

1.4 I’m a current grantee and I have a question about my grant. Which foundation staff member should I contact?

If your question is about administrative matters such as deadlines, reporting requirements or our procedures, contact our grants manager, Susan Clark (sclark at gddf.org). If you have a programmatic question, contact our program directors: in South Carolina that’s John Sands (jsands at gddf.org), in Chicago it’s Paul Botts (pbotts at gddf.org).

 

1.5 Will the foundation accept complimentary tickets to performances or events held or sponsored by an organization it funds?

Members of our staff and board regularly attend performances and exhibitions by our arts grantees, through a systematic rotation managed by our program directors for the Chicago region and the Lowcountry of South Carolina. We also try to always let a group know, after the fact, that someone from the foundation attended the event. However when attending a grantee's event we feel it is appropriate to purchase our tickets and to attend a regular performance rather than an opening night or fundraiser -- as much as we appreciate the thought, we’d rather you put those special-event tickets to better use than giving them to us.

 

1.6 How can I obtain a printed copy of your application guidelines and list of recent grantees?

All information about the Gaylord and Dorothy Donnelley Foundation is available on our website: www.gddf.org. You can download any information you wish from the site, but note that we require all that grant proposals be submitted electronically through the website.

 

1.7 To whom should we address a thank-you note for the foundation’s gift to our organization?

This raises an interesting issue. A foundation grant is not a “gift” such as a check your group might receive from an individual donor; rather, we view it is an investment. To the degree that any thanks are owed it’s to the memory of Gaylord and Dorothy Donnelley; those of us involved with the foundation now are best rewarded by your organization successfully doing what it does best. A thank-you note is not necessary. We’d rather see your time and effort go exclusively towards carrying out your organization’s mission.

 

2. How We Work: Grants

2.1 I’m with a non-profit group and thinking about seeking a GDDF grant for the first time; should I just submit a pre-proposal, or a letter of inquiry or an application? Or should I call first to tell you about us and what we want to do?

We ask that you not send a formal pre-proposal or letter of inquiry. Here is what we recommend.

First, we ask that you read all of the Foundation and Program sections of this website, as well as all of this FAQ so that you understand both the overall aims of the foundation and the types of programs we fund. After that, if you feel that your group strongly fits our guidelines, go ahead and submit an application. The type of organization for which this approach is usually the most straightforward is a small professional arts organization seeking general-operating support.

If you aren’t sure, a call or email briefly describing what you have in mind is better than submitting a formal proposal out of the blue. In South Carolina the contact person is John Sands (jsands at gddf.org), in Chicago it’s Paul Botts (pbotts at gddf.org). We’re always happy to respond to an email briefly describing your project.

Please note however that we do not make grants to organizations which have been designated as a Type III supporting organization as defined by section 509(a)(3), often called an operating foundation. See section 2.7 below for that explanation.

 

2.1.1 Do you make grants to public or quasi-public agencies?

We generally do not make grants to public entities, so we don’t accept unsolicited proposals from them. Occasionally such a grant can make strategic sense for our mission goals, but those exceptions will always arise from conversation between an agency and our staff.  Please contact us if you represent such an agency and would like to discuss a project.

 

2.2 What is the difference between a "general operating" grant and a "project" grant?

A general-operating grant is given to an organization and is not limited to a specific project. A project grant is for a specific purpose, and the recipient must segregate and track the expenditure of those funds. A project we may help fund could be something an organization has decided to do beyond its usual operations to carry out its mission (e.g. a public-awareness campaign, or a research effort), or activities which help an organization improve (e.g. creating a strategic plan or business plan).

 

2.3 Your website says that in the arts, only professional organizations with annual operating expenses under $1 million can receive general-operating grants. Why is that?

The foundation believes a key source of new artistic vitality in the Chicago region is small emerging professional arts organizations, but few institutional funders specifically focus on such groups, partly because they are inherently higher-risk investments. Research we conducted in 2006, which is posted on our website as the “Chicago Region Arts Scan,” supports that conclusion. So while we recognize the riskiness of such investments, we focus all of our Chicago-region arts general-operating grants on professional, small, fully-independent arts organizations. In that spirit we do not accept proposals from amateur, community arts groups; organizations having annual expenses greater than $1 million; or groups that are legally, financially, or operationally part of a larger institution. In the South Carolina Lowcountry we take a similar approach though without the $1 million budget cap because of the smaller number of organizations.

 

2.3.1 Are larger arts organizations eligible for any sort of grant?

There is one case in which we make grants to larger arts organizations. It is for project grants for work done to increase lasting public access to significant collections that illuminate the region’s artistic, cultural and historic vitality for area audiences. Annual-budget size is not a factor in those awards. It is important to understand, though, that project grants never support a group’s general budget even indirectly. We would not, for example, cover part of the salary of an artistic director to oversee a theater group’s education program. Again, the budget cap does not apply to arts organizations in the South Carolina Lowcountry.

 

2.3.2 What is your definition of a “professional” arts organization?

In most cases it is clear when an arts organization is professional -- for example a community symphony. However, the line can sometimes get blurry. If we had to settle on just one criterion it would be: Whether the artists who perform are active professionals in their artistic discipline who are chosen through an open competitive audition process. We also consider factors such as whether or not there is a salaried administrative staff, paid directors or guest soloists, and numbers of paying ticketbuyers/subscribers, but those are less central than who makes up the main body of artists and how they are chosen. As a general rule, we don’t view the amount of money that the artists are paid for performing as proof of “professionalism.” We view a case in which performers themselves pay a fee to be included or help cover production costs as a clear indicator of a “community” arts organization.

 

2.4 How much of a project’s direct costs should we ask the foundation to provide?

Obviously the more funders supporting a project the better, and it would be unusual for the foundation to cover all of a project’s direct costs. Situations vary, however, and there have been cases in which we have been the first funder in or have covered most or even all of a project’s direct costs. We will always expect that a viable project partner can cover its own overhead or indirect costs. (see items 2.13 and 2.131)

In the grant-application process it is very important to us that non-profit staffs not spend valuable time trying to figure what amount of money represents "not-less-than-we-could-get-but-not-too-much-to-ask." We ask that you be frank with us about what the project fully costs and why (including overhead or indirect costs). In return we promise not to hold that candor against you as we discuss your project with our board. Our decision will be based on the project’s caliber and cost, on the strength of the organization doing it and how strongly it advances our mission strategy and goals.

 

2.5 Do you ever make general operating grants to organizations other than small arts groups?

We rarely make such grants, especially in the Chicago region. In order to make a general operating grant to, for example, a land conservation organization we must already have a successful grantmaking history with that organization. The organization should be highly productive and stable and fit a high standard of uniqueness, i.e, no organization that is at all similar within the region. An unsolicited application for general-operating support, from a group we aren’t already funding and that isn’t a small arts group, is not likely to succeed.

 

2.6 You don’t accept unsolicited proposals for grants to capital fundraising campaigns, but does that also rule out applications for the costs of a campaign such as printed materials or a fundraising consultant?

Yes it does.

 

2.7 What is an "operating foundation" and why won’t you make a grant to one?

Operating foundations, a specific IRS classification, use the bulk of their income to provide charitable services or to run charitable programs of their own. If a private grantmaking foundation such as our own provides support to an operating foundation, IRS rules require us to take "direct expenditure responsibility" for the use of our funds. That level of detailed oversight costs both organizations a great deal of staff time to carry out, so we avoid it.

 

2.8 What do you mean by "capacity-building" grants?

Non-profits, as public corporations, are obligated to efficiently pursue their charitable purposes. But it is often hard to find the time, patience and funds for self-reflection or internal planning. A half-century of experience investing in the work of non-profits, though, has taught us how valuable these processes can be. As a result, we are open to making project grants to cover the cost of good professional help or training in areas such as strategic planning, marketing, fundraising, board development, etc. Creating good systems to objectively measure the results of your work is another type of important capacity-building that we consider. (see section 2.11).

We do not expect to participate in your planning process or in choosing the consultant you hire. When a robust plan makes a good case for it, we can consider start-up support for critical new internal capacity such as a new fundraising or marketing staff position. We are unlikely to cover the entire cost of such a new position even initially, and there must be a strong indication that the new position will shortly become sustainable from the organization’s general revenues. In Chicago, in partnership with several other funders, we have helped create a new fund aimed specifically at capacity-building for small arts organizations. Visit Arts Work Fund to learn more. 

 

2.8.1 If I get a grant from the Arts Work Fund does that mean I can't apply to the Gaylord and Dorothy Donnelley Foundation for a general operations grant?

Not at all. Small and medium sized professional arts organizations can still apply for a general operating grant from the Gaylord and Dorothy Donnelley Foundation, in addition to pursuing Arts Work Fund support for capacity building. They are separate grant programs with distinct goals. Visit Arts Work Fund to learn more.

 

2.9 What’s the difference between a "strategic plan" and a "business plan"?

What is the difference between a "strategic plan" and a "business plan"?

A strategic plan starts with the big picture and works down. It addresses questions such as: where does our organization want to be in three years, or five? What are our strengths and weaknesses, and what are the key external opportunities and threats that we must reckon with? Does our mission statement still make sense or should it be altered? Of all the worthwhile things we could do, how will we prioritize the very short list to tackle first? A business plan is usually a second step after completing a strategic plan. It is more focused, laying out how an organization will carry out its operations or a specific project. A business plan establishes specific financial targets and describes how they can be met; identifies financing needs and solutions; describes operational structures; identifies cash-flow needs along the way; and may identify key marketing challenges and strategies; etc.

 

2.10 What are reasons you would decline a grant proposal from a group whose work is of good quality and fits the foundation’s subjects of interest?

Our ethical and legal obligation, as a not-for-profit organization benefiting from tax-exempt status, is to get the most on-the-ground mission payoff for the resources at our disposal. Our goal is to ensure that our grant funds are put to the best uses we can identify.

We recognize that beyond the obvious questions of subject matter and caliber of the work, deciding which projects and organizations represent the best grant investment is an art not a science. The foundation's board is assisted by our staff, most of whom have extensive prior experience working for non-profit organizations. Here are some recurring themes that lead the foundation to decline grant applications:



2.11 How is it possible to do an ‘evaluation’ or ‘measure our results’? The work that non-profits do cannot be reduced to numbers and consultants can be expensive.

All of us who work at foundations understand how you feel about the evaluation issue, because we face the same challenge. Not only are we responsible for grant investments, we conduct our own initiatives and field projects (see the Program section of www.gddf.org) about which our own board of directors asks for specifics on accomplishments. And almost everyone on our staff has worked for public charities, so we know how frustrating it can be to be asked to measure what can seem inherently unmeasurable.

Nonetheless, we believe that the organizations most likely to make the biggest difference are those which are most serious about self-examination and measuring results.

An increasing number of foundations, including the Gaylord and Dorothy Donnelley Foundation, are willing to support the costs of implementing good evaluation systems at non-profits that are doing relevant work. If you’d like to explore this subject further, give a member of our program staff a call to discuss it.

 

2.12 What do your proposal reviewers mean when they ask about the ‘sustainability’ of our organization?

Sustainability refers to your organization’s ability to support its annual expenses from sources other than foundations. We care about that because if you are not able to do this, it is very likely that your organization will eventually go out of business.

The continuing growth of charitable giving in the United States (it has grown well ahead of inflation for decades now) is dominated by individuals. Foundation grants continue to be less than 15 percent of the total, even counting giants like the Bill and Melinda Gates Foundation. For arts groups earned-revenue opportunities have surged as well, with performing-arts ticket sales continuing to set new records. Those are the strongest potential sources of steady sustainable revenue for the non-profits whose success GDDF seeks to ensure. The current recession has not changed these long-term trends.

As the number of non-profits being established also surges, foundations continue to receive more requests for funding than it is possible to fund. Foundation grants, in other words, best serve the non-profit sector by being used as seed money. In general, an organization that relies on foundation grants as the core of its revenue base is not one that is ‘sustainable.

 

2.13 Will you cover indirect costs or organizational overhead costs related to a project to which you’re making a grant?

One core indicator of any organization’s health and effectiveness is that its core costs of doing business are sustainable. Therefore we expect project partners to be able to cover those costs. We will not cover indirect-cost recovery or organizational overhead costs. The basis for us to award a project grant is for that project to advance one or more of our mission goals or strategies, and we’ve learned that a weak or ineffective organization is less likely to carry out new projects well.

That does not mean however that you shouldn’t list indirect costs in your application. We understand that office rent and other expenses are real costs that must be paid for, and you should list those costs in a reasonable but complete manner as a matching cost of your project.

 

2.13.1 Can your grant be used to pay the salary of an existing staff member who will be working on the project?

An organization which needs foundation project grants to pay for its own executive director or program staffer is not likely to be a viable and productive project partner for us. For example, we know from long experience that starting education or outreach programs is not an effective way to secure new funding for core staff.

But again, do list such costs as something which your organization is contributing as a project partner -- we want to know about it, and that you understand that it will be a real cost to your organization in carrying out the work in the event that we award a project grant.

 

2.14 Will you fund a project which takes place outside your geographic region but serves people from within that region?

It’s very unlikely. Generally we make grants only for projects which are taking place within our community areas, simply because those are the projects most likely to have the greatest impact for the Lowcountry of South Carolina or the Chicago region. A project taking place outside of our geographic boundaries would have to not simply serve the communities within one of those regions but would need to uniquely advance land conservation or artistic vitality there.

 

2.15 Our organization has possession of an important collection of historic material which we’d like to make publicly accessible but the actual ownership of the items is murky, or we’ve been promised the donation of the material but that hasn’t happened yet. We are able to start working on making the collection accessible, so can we apply for a grant to support that?

You can apply, and if the collection is regionally significant and your plan to make it accessible is sound the foundation may award funding for the effort, but we won’t actually release any funds until you have clear legal ownership of the collection. You must be able to document either ownership of the material or permanent unrestricted rights to use it and make it available to the public before we can provide funding.

 

3. How We Work: Loans and Guarantees

3.1 What is a "program-related investment"?

A charitable foundation’s grantmaking and other program work are funded by investment returns on its endowment; the foundation’s board has a fiduciary duty to invest the endowment prudently. A "program-related investment" is one made in support of the foundation’s mission interests (in our case, artistic vitality and land conservation), in which case we can legally accept lower-than-normal financial gains or higher-than-normal financial risk. Some examples of this sort of work include making a loan to a non-profit organization, serving as guarantor of a loan, funding a revolving fund, or placing endowment funds with a bank which makes below-market loans to non-profits.

 

3.2 Will you use a program-related investment to lend money to non-profits to help them work through budget shortfalls?

No, we would not view such a loan as a responsible use of the foundation’s endowment. Program-related investments are always for projects, never for general operations. Also, any project we make a loan to must have a specific revenue stream lined up to fund its repayment. Our fiduciary duty requires a high degree of due diligence for any proposed loans or loan guarantees, so currently we will consider making program-related investments only to organizations which have already received GDDF funding.

 

3.3 We are an existing GDDF grantee and have a program-related investment opportunity that you might find sensible. What are the deadlines for applying for a loan or loan guarantee, and which forms do I fill out?

There are no deadlines or forms for program-related investments. Each program-related investment idea is examined individually by the foundation, and must be specifically examined and approved by a board committee or the full board. If you are an existing GDDF grantee and have something along those lines to propose, contact a foundation staff member to talk about the process. In South Carolina the contact person is John Sands (jsands at gddf.org), in Chicago it’s Paul Botts (pbotts at gddf.org).

 

4. How We Work: Direct Charitable Activities

4.1 What is a "direct charitable activity"?

When a foundation engages in what most people think of as the type of project typically done by a non-profit organization, it is carrying out a “direct charitable activity.” Foundations are themselves non-profits, with charitable missions and boards of directors just like an environmental or arts group; but it’s relatively unusual for a foundation to choose "direct charitable activity," as opposed to grantmaking, as a significant way to carry out its charitable purpose. The Gaylord and Dorothy Donnelley Foundation is different in that it does a fair amount of direct charitable activity, led by staff members who have held staff positions at large and small non-profits. The costs of such work qualify as part of the annual expenditures required of a tax-exempt foundation under federal law, though they total much less than our grants to other non-profits.

 

4.2 What sorts of “direct charitable activity” projects do you take on?

A grantmaking foundation with relatively broad areas of interest naturally becomes something of a clearinghouse for ideas and methods for non-profit work in those subjects. This gives us an opportunity to identify projects useful to the field, such as convening key parties to share resources or ideas; carrying out pilot or demonstration projects of new solutions to existing issues; identifying bridges for the gaps between the work of existing groups; and conducting practical assessments of the non-profit sectors we invest our grant funds in.

 

4.3 How do I bring an idea to the attention of the foundation?
We are always on the alert for good ideas that align with our program priorities. We welcome phone calls or email messages to discuss them. In South Carolina contact John Sands (jsands at gddf.org), in Chicago contact Paul Botts (pbotts at gddf.org).

 

5. Lobbying and Political Campaigning

5.1 What exactly constitutes "lobbying" that you won’t fund?

IRS regulations prohibit us from funding any activity which constitutes lobbying under U.S. federal law and regulations. Lobbying is efforts to influence legislative action, including attempts to get voters to contact their legislators. Note also that if the legislative action in question takes the form of a voter referendum then the legislators are the voters, meaning that putting up a billboard saying "Vote yes on Proposition 439" constitutes lobbying. If you are in doubt, you need to consult an attorney. Our bottom line is that we do not fund lobbying activity under any circumstances.

 

5.2 Do you ever fund groups that get involved in political campaigns?

No. While tax-exempt non-profits other than private foundations can lobby governments within certain limits, federal law explicitly forbids them from participating in partisan political activity: work on behalf of or against particular candidates for elected office. An organization which does that cannot be granted tax-exempt status under section 501(c)(3) of the IRS code, and hence is never eligible for any funding from the Gaylord and Dorothy Donnelley Foundation.