The Nonprofit FAQ

In recent years, foundation grants have provided a little over 3% of the total revenue of community serving nonprofits organizations ("public charities" in I.R.S. terminology). In dollars, that 3+% represents about $45 billion -- not exactly small change! But still, these statistics make clear that receiving a foundation grant is a rare event among nonprofit organizations. (Recent statistics about amounts and sources of nonprofit revenue can be found at the National Center for Charitable Statisics -- http://nccs.urban.org/statistics/quickfacts.cfm.)

There are about 113,000 private foundations in the US. Most of them are quite small -- in 2006, a little over 20,000 of them made grants of over $100,000 or had assets of over $1 million. Even among those larger foundations there are many that have only one or two staff members. The marquee foundations with familiar names make up an almost invisible fraction. (Statistics about foundations are available from the Foundation Center at http://foundationcenter.org/findfunders/statistics/.)

The larger staffed foundations have employees (often called "program officers") who are responsible for becoming familiar with an area of potential grantmaking that fits the priorities set by the board and senior management. These program officers are usually also responsible for reviewing grant proposals, making site visits, assessing progress from grantees' reports and, generally, managing the foundation's work in one or more areas. In smaller foundations, these tasks are often performed by board members (many times members of the family that founded and supports the foundation); often the processes are less formal and the grantmaking program closely reflects the founding family's community interests and philanthropic goals.

So the first difficulty about engaging with foundations is just finding out which ones might possibly be interested in your work. There are directories, and online services, that can be accessed through libraries or by subscription. Only some foundations are listed and even among those that are listed the background information may be sketchy. Many foundations do not accept unsolicited proposals (meaning that they do their own research and then ask promising organizations to submit funding applications). Those that do accept proposals may publish guidelines and application procedures, but the former are often quite vague and general while the latter are often quite strict and demanding. The sad truth is that some of the more well-known foundations receive so many inquiries that they can barely pay attention to any of them.

Every expert who speaks or writes about finding foundation grants says "follow the application guidelines precisely." This advice is summarized in the Nonprofit FAQ item at http://www.idealist.org/if/i/en/faq/484-202/327-275.

If you listen in on convesations among people from the foundations that do accept proposals, though, you'll hear over and over again the complaint that many proposals arrive that don't follow the guidelines at all, are incomplete, and still include large amounts of material that is unnecessary and distracting. Anyone who seriously intends to seek foundation support as part of the ongoing revenue supporting a program needs to avoid those mistakes.

In addition to the sheer difficulty of finding foundations that are likely to be interested in any specific program activity, there are two more issues to think about before going too far down this road.

• First, many foundations include very specific instructions on how the money is to be spent with every grant they make. Keeping track, and providing the required reports, can divert energies from the core programs of the grantee.
• Second, few foundations are willing to provide continuing funding for ongoing programs. Most frequently, foundations support program development, research or other relatively short-term activities and expect grantees to cover ongoing activities from donations, program-service revenues, and, perhaps, contracts with government agencies.

-PB, 7/29/09