Creating a Strategic Philanthropic Portfolio | Uncovering the Process

Philanthropy is most effective when guided by strategy, intentionality, and a deep understanding of the organizations being supported. For philanthropists looking to maximize their impact, curating a well-rounded nonprofit portfolio is essential. Imagine a funnel—there are thousands of local nonprofits working to make the world a better place. Creating a strategic philanthropic portfolio requires funders to begin narrowing that funnel.

What is a Strategic Philanthropic Portfolio?

It is a group of nonprofit organizations that you choose to support that aligns with your philanthropic goals. Inside of your portfolio, you may have a mix of small, grassroots nonprofits along with long established, well funded institutions. All are operating to influence a particular issue area in which you hope to make an impact. Some philanthropic investments may carry more risk than others; while others may feel like a safe bet as their governance structure is proven and their programs are evidence based. 

For example, if you want to support a complex issue such as homelessness and housing, you may want to consider supporting a mix of shelters, advocacy and policy efforts, mental health and wellness programs and affordable housing initiatives within a specific geography. In coordination with your philanthropic strategic plan, setting up the framework for your nonprofit portfolio requires several steps outlined below.

How Do You Create an Impactful Portfolio?

Step 1: Define Your Philanthropic Priorities

Before selecting nonprofits to support, take time to clarify your core values and focus areas. Ask yourself:

  • What issues matter most to you? (e.g., education, environmental conservation, social justice, healthcare)
  • Do you want to support broad causes or niche areas within them? (education broadly vs. early childhood education programs, after school programs, etc.)
  • What kind of impact do you hope to achieve through your giving? (one student’s life changed vs. broader learning enhancements to hundreds of students)
  • Are you hoping to address root causes of an issue? Are you hoping to impact the symptoms of the issue you see? Or both?  

Defining these priorities ensures that your philanthropic efforts are aligned with your mission and values, creating a meaningful and lasting impact. Some philanthropists and institutional funders go so far as to develop a theory of change where they articulate the impact they hope to make and the steps that are needed to achieve success. A thorough theory of change will include a list of nonprofit partners that will facilitate the change; hence a portfolio is created.

Step 2: Determine Your Funding Preferences

Once you have identified your focus areas, consider how you want to allocate your resources:

  • Size of organizations: Do you prefer supporting smaller, grassroots nonprofits or larger, well-established organizations? Or a mix of both?
  • Grant size: Would you rather distribute smaller grants to many organizations or provide larger grants to a select few? Or your portfolio may include a range of grant sizes depending on the organization’s capacity to steward a gift well?
  • Type of funding: Are you more inclined to support general operating budgets, specific programs, capital campaigns, or endowments? 

Being clear about these preferences will help structure your giving and ensure alignment with your philanthropic goals.

Step 3: Engage with Thought Leaders & Community Stakeholders

Understanding the landscape of your focus areas is key to making informed decisions about your philanthropic giving. Ways to engage include:

  • Attending local events and nonprofit convenings
  • Joining advisory boards or giving circles
  • Learning about policies that shape your issue areas
  • Connecting with nonprofit leaders and other funders

These interactions provide valuable insights into challenges and opportunities, helping you refine your giving strategy.

Step 4: Establish Your Giving Budget & Allocation Plan

Having a clear budget will help you distribute your philanthropic dollars effectively. Consider:

  • The total amount you plan to give annually
  • Whether you will distribute funds evenly across focus areas or prioritize one over another
  • Setting aside funds for unexpected giving opportunities

A well-defined budget ensures consistency and intentionality in your philanthropic efforts. Inherent in any portfolio development, there will be risks and sure bets. You should give careful consideration in how much of your budget allocation is dedicated to the spectrum of risk-reward. 

Step 5: Conduct Due Diligence on Potential Nonprofit Partners

With your priorities and budget in place, the next step is vetting nonprofits that align with your giving strategy. Due diligence should include:

  • Reviewing financial reports and annual statements
  • Assessing organizational leadership and governance
  • Evaluating program effectiveness and impact metrics
  • Examining partnerships and collaborations

By carefully selecting nonprofits that align with your criteria, you increase the likelihood of meaningful impact.

Following your due diligence process, narrow the field of potential grantees and select a few for site visits. Benefits of site visits include a first-hand look at their programs in action; an opportunity to engage with leadership, staff, and volunteers; and a deeper understanding of challenges and opportunities. Beyond due diligence, site visits help build relationships with organizations, fostering deeper, more meaningful philanthropic partnerships.

After conducting site visits, take time to reflect and gather insights from trusted advisors, family, or peers. Share what stood out to you during the visit and if what you learned aligns with your philanthropic priorities. Using this feedback, finalize your nonprofit portfolio, ensuring that each organization reflects your values and goals.

Step 6: Utilize Your Philanthropic Portfolio to Sustain Your Giving

With your nonprofit portfolio in place, consider how you will sustain your giving over time:

  • Will you provide multi-year funding commitments?
  • How often will you reassess and adjust your portfolio?
  • What ongoing engagement will you have with the organizations?
  • How do you evaluate your giving  portfolio and its impact?

Strategic philanthropy is an evolving process. Regular check-ins and reassessments will ensure that your giving remains effective and aligned with your mission.

Final Thoughts

By better understanding your reasons for giving, conducting a site visit, being prepared with the questions you would like to ask and understanding alignment to your philanthropic priorities, philanthropists can build a nonprofit portfolio that reflects their values while ensuring that their investments contribute to strong, effective, and sustainable organizations. Thoughtful vetting, ongoing engagement, and a commitment to strategic philanthropy enable donors to make a lasting difference in the causes they care about most.

About Grant Philanthropic Advisors:
We’re an independent, Charleston-based firm helping clients to focus and maximize their philanthropy—in turn, strengthening the fabric of our communities. Founded in 2019, we help donors move from responsive patterns of giving by assisting clients to identify values and become more strategic in their philanthropy. Our goal is to help donors to become more effective as change-makers. Our team has a combined 100 years of experience working in the field of philanthropy.

We work with foundations (large and small staff teams), donor advised fund holders, multi generational families, individuals, philanthropy supporting organizations and corporations to design philanthropic strategies. We work with philanthropies that grant $1 million to $40 million annually. Our clients span the Southeast with a concentration in Charleston, Atlanta and Charlotte.

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