Posted by Dahna Goldstein on Wed, Aug 25, 2010 @ 02:59 PM
Following up on last month’s post about philanthropy statistics, here are a few more, drawn from the Foundation Center’s Highlights of Foundation Giving Trends, and GuideStar’s The Effect of the Economy on the Nonprofit Sector:
- From the Foundation Center:
- In 2008, 164,353 grants were awarded by a sample of 1,490 large foundations to 63,794 recipient organizations;
- The average number of grants awarded by each of those 1,490 large foundations was 110;
- The amount of grant dollars dedicated to program support (~50%) and general support (~19%) remained consistent with the previous year’s numbers;
- All foundation types (independent, corporate, and community) prioritized giving for education and human services. Independent foundations also prioritized giving for health, though that data could be slightly skewed by the large number of dollars the Gates Foundation has poured into health funding;
- From the GuideStar survey:
- 40% of respondents say that total contributions to their organizations decreased in the first five months of the year, compared to the first five months of 2009, while 28% stayed the same;
- A previous GuideStar survey, whose results were released around the same time last year, found that 52% of respondents said that total contributions to their organizations had decreased compared to 2008. The fact that fewer nonprofits are now reporting decreases is somewhat encouraging, but does not imply that those nonprofits that did not report a decrease this year are necessarily in good shape from a fundraising perspective;
- Decreases in individual giving where the top-cited reasons for contributions decreasing (both fewer gifts and smaller gifts);
- Given that individuals make up the largest percentage of donations to nonprofits, this is not surprising;
- Corporate gifts and foundation grants also happened in fewer numbers and for fewer dollars;
- Though fewer grants were awarded, 41% of grantmakers reported that the number of requests they received increased;
- 62% of grantmaking organizations (both private foundations and grantmaking public charities responded to the survey) indicated that they had not made any major changes to their grantmaking practices. Last year, 43% of grantmakers had made changes as a result of the economy. In 2009, 20% said they had cut back on the types of programs they funded; this year, that number was down to 12%. Here’s hoping it’s 0% in the next survey.
Image source: http://www.flickr.com/photos/stewf/2026818238/
Posted by Dahna Goldstein on Tue, Aug 10, 2010 @ 03:01 PM
You may have just had your heart broken. It seemed like things were going well. Everything was perfect on paper. You were talking about it with friends. You thought you had found the one. And then, out of the blue, it ended.
Every grantseeking nonprofit has had this experience. Your programs match the funder's interests and priorities. You put together a thoughtful proposal, addressing the funder's particular interests, hoping to land significant funding. It looks promising, and then it doesn't happen.
Like dating, grant dating is relationship building, and it takes time, dedication, interpretation of unclear signals, and some strategy. And a little flirting doesn't hurt.
Step one - put yourself out on the market. Even if your last grant date was a disappointment, you need to get back out there. Yes, rejection hurts, but learn from it and move on. You're good enough, you're smart enough, and, doggone it, people like you (with apologies to Stuart Smalley).
Putting yourself back on the grant market means doing a few things:
- Take stock of your past funder relationships. Have you stayed in touch? Do you know their current priorities? What happened to end the relationship? Might they be open to exploring a future relationship? If not, what can you learn about how to position yourself with other funders?
- See who's out there. Who is currently funding your issue area? Your geographic area? Start with the Top Five Resources for Grant Opportunities. Even if a funder isn't currently accepting proposals, this could be a good time to start building a relationship. You have to play the field a bit to find the right relationship.
- Let your friends know you're dating. A lot of funding relationships evolve from personal connections. Do you know anyone at a foundation that hasn't yet funded your organization? Does one of your board members? Or a volunteer? Ask for an introduction.
- Create your online dating profile. What is the impression you want to make on a prospective funder? What information should be on your organization's website if a potential funder visits the site? How can you put your best foot forward in an initial meeting? It may only be a phone date, but you want to make a good first impression. Be prepared to talk about your organization when you meet people at conferences, at networking events, or when you're introduced by a mutual friend.
Next up, preparing for your first date. Stay tuned!
Image credit: http://www.flickr.com/photos/carbonnyc/132922595/
Posted by Dahna Goldstein on Wed, Jul 28, 2010 @ 12:30 PM
Jim Canales, CEO of the James Irvine Foundation, wrote a guest blog post on Tactical Philanthropy as part of the soon-to-be-renamed "Audacious Ideas" series. In it, he calls on large foundations to commit to increasing transparency, accountability, and authenticity in their working relationships with their grantees.
He specifically encourages foundations to make their processes more open, more transparent; to be held accountable to grantees (and to make the mechanisms for that accountability known to grantees) and to infuse interactions with grantees and applicants with respect. He further points out that if the largest 250 foundations committed to these types of activities, the quality of grantor-grantee relationships could be significantly improved.
I applaud Mr. Canales' calls to action, and also agree with him that what he's calling for are things that foundations should be doing anyway -- that what he's calling for should not, in fact, be audacious, though it turns out that it is, among current foundation practices.
I would take his encouragement one step further, and apply it to all foundations, not just the 250 largest. There is something of a gulf in the foundation world between the largest foundations (which, admittedly, comprise the largest percentage of dollars granted), and the remainder of the over 77,000 foundations that interact with grantees and prospective grantees in one way or another.
Nonprofits -- those that are on the grantee side of the grantee-grantor relationship -- apply for and receive funding from foundations that are not in that top 250. And they spend significant amounts of time doing it. The top 250 foundations are more likely to have websites and to publish annual reports than their smaller peers. It is generally easier for prospective grantees to find information about them and to interact with them.
The smaller foundations, many of which have few or no staff, frequently feel disconnected from the larger foundations, and that "keeping up with the Gateses" is out of their reach.
Here is one concrete step that I think every foundation, regardless of size, should take to move a little bit closer to Mr. Canales' vision of transparency, accountability, and authenticity: every foundation should have a website.
While not every foundation accepts unsolicited proposals, that does not mean that their work should be hidden from public view. I have contended previously that foundations should be more transparent. All foundations should voluntarily disclose basic information about their activities - what their funds support and in what quantities, how decisions are made, whether the foundation accepts unsolicited proposals (and if it doesn't, that's fine - putting up a website with clear guidelines and restrictions goes a long way towards letting prospective grantees know what to expect - and what not to expect).
Brad Smith, the President of the Foundation Center, makes the case in this post that all foundations, as a result of their favorable tax treatment, should accept unsolicited proposals (with the ability to express a preference for solicited submissions).
What do you think? Should every foundation have a website? Should all foundations accept unsolicited proposals?
Photo credit: http://www.flickr.com/photos/hellochris/2801931497/
Posted by Dahna Goldstein on Mon, Jul 26, 2010 @ 03:09 PM
I've noticed an interesting trend among PhilanTech's clients and the sector at large in the last few months - more foundations are using two-stage application processes, and requesting a letter of intent/inquiry (LOI) from prospective grantees before requesting a full proposal.
I think this is a good thing, and reflects a couple of realities in the grant seeking and grant making worlds.
LOIs are a relatively low investment way for both the prospective grantee and the prospective funder to see if there's a good fit. Think of it as going for coffee, but not for dinner (more to come in future blog posts about grant dating). If the fit isn't good, neither party has spent too much time, or invested too many resources. If the fit is good, the grantmaker can request a full proposal, which takes the nonprofit much longer to put together and takes the funder much longer to review. But that proposal will be a better use of both parties' time, since the preliminary fit was already established.
This shift reflects, I think, two trends:
- Increased competition for dollars
- Nonprofits are submitting more funding requests
- Foundations are receiving more requests (and generally funding fewer) and are therefore looking for ways to save time and focus their efforts on the proposals they are most likely to fund
- Funders are thinking increasingly about the administrative burdens placed on their grantees and trying to reduce them. One of the best practices suggested by Project Streamline as part of relieving the burden placed on grantees in grantseeking is to include a two-stage application process.
I predict that we'll see more of this, even as the economy continues to recover. Foundation grants remain an important source of funding for many nonprofits, and both parties will continue to streamline the process by shifting resources and processes and by using tools like PhilanTrack for online LOIs and proposals.
Photo credit: http://www.flickr.com/photos/shamjolimie/
Posted by Dahna Goldstein on Thu, Jul 08, 2010 @ 04:40 PM
A few interesting philanthropy statistics:
- 98,428 grantmakers (Foundation Center)
- 114 new grantmakers in the past month (Foundation Center)
- 997,579 public charities (National Center for Charitable Statistics)
- 293,000 nonprofits that could lose their exempt status due to not meeting new IRS filing requirements (National Center for Charitable Statistics)
- Over 372,000 grants awarded in 2008 by foundations (from Foundation Center data, some analysis mine)
- Charitable giving dropped 3.9% in 2009 (GivingUSA)
- Corporate giving rose 5.5% in 2009, fueled in part by in-kind giving (GivingUSA)
- Total giving in the US was an estimated $303.75 billion (GvingUSA)
- Of that, individuals are by far the largest single component. Foundation and corporate giving was $52.54 billion, which is nothing to sneeze at (GivingUSA; sneezing comment mine)
- Only 3-4% of donors do research on nonprofit performance before they give, yet 85% say they care about an organization's performance (Hope Consulting, referenced on TacticalPhilanthropy.com)
I'll track changes in these stats periodically. If there are other philanthropy statistics you want to know about, leave a comment and I'll see what I can find.
References:
Foundation Center
National Center for Charitable Statistics
GivingUSA
Hope Consulting
Tactical Philanthropy
Image from http://www.flickr.com/photos/lrargerich/3029485203/
Posted by Dahna Goldstein on Thu, Jun 17, 2010 @ 01:51 PM
I just read Seth Godin's blog post entitled "Hope and the Magic Lottery." In it, he advises entrepreneurs not to put any eggs in the basket of "hope and the magic lottery ticket." In other words, he writes, don't expect that your elevator pitch is going to land a $2 million venture capital investment. Instead, focus on growing revenue and delighting the people who are already your audience.
The same advice applies to nonprofits seeking grant funding. While it's possible that your organization will get a multi-million dollar grant from Gates or Ford, for most nonprofits, that's a magic lottery ticket. Focus instead on:
- Delivering great services and telling good stories about your work to your current donors (and use your service recipients, when you can, to help tell those stories);
- Build on existing relationships with the funders you already have;
- Do your grant research and find those foundations and other funders that are specifically interested in finding our what your organization does and what makes it gre at. Foundation staff generally don't like to receive proposals that don't meet the foundation's guidelines, and your odds of getting that kind of prop osal funded are slim to none.
Hope is important, but hard work, good research, and knowing your audience (the foundation staff and trustees who will be reading your proposal) will win the day.
(image from: http://www.flickr.com/photos/denverjeffrey/202431834/
Posted by Dahna Goldstein on Mon, Jun 14, 2010 @ 11:00 AM
I was a guest lecturer the other night for a social entrepreneurship class at the University of the District of Columbia. Along with Hilary Cherner of Arabella Philanthropic Advisors, I talked about the role of foundations in the U.S., and about running a social enterprise dedicated to serving the needs of foundations and nonprofits.
Hilary started by asking the students, all of whom are interested in social entrepreneurship, many of whom are mid-career, if they knew what a foundation was. Only a few hands went up. I was a bit surprised, but I shouldn’t have been.
Foundations play a significant role in the U.S. According to the Foundation Center’s latest research, there are over 75,000 grantmaking foundations in the U.S., and they collectively awarded almost $43 billion in grants in 2009.
But the average American doesn’t really know what a foundation is or what it does. NPR listeners hear about foundations underwriting their favorite public radio programs, and many Americans have heard something about the Gates Foundation, and perhaps about Ford and some of the other big foundations.
Even among the most engaged American citizens, those who hold leadership, committee, or board-level positions with community organizations, more than half could not name a foundation when asked, according to a survey conducted by Harris Interactive for the Packard Foundation’s Philanthropy Awareness Initiative. Sixty percent of those polled considered themselves relatively uninformed about foundations, and only a handful (11%) could provide a specific example of the impact of a foundation on an issue they cared about.
The report about the survey, Philanthropy’s Awareness Deficit, quotes Joel Fleischman, author of The Foundation: A Great American Secret, citing a report conducted in 2003 by the Council on Foundations showing that only 11% of the general public could name a foundation. While the most engaged Americans clearly fared better, this does not bode well for the overall perception of foundations and what they do.
Not surprisingly, those who had direct experience with foundations (for example, if an organization with which they were involved received foundation grant funding) had both more knowledge of and more favorable views towards foundations.
These findings and others point to an ongoing need for greater transparency in the foundation world. The engaged Americans who knew of foundations and their impact knew more about community foundations than private foundations. Perhaps increased knowledge of foundations at large would increase involvement in and donations to community foundations in the short term, and to private foundations and philanthropy in general in the longer term.
Posted by Dahna Goldstein on Thu, Jun 10, 2010 @ 11:00 AM
This is the first in an occasional series of “Top 5 Resources” posts. Each of these posts will propose a list of the top 5 resources for a particular category or issue, and ask you to suggest others if I’ve missed something that you think should be in the top five. I’ll revisit and revise these lists from time to time, based on any input received in the comments on the posts.
The objective of these lists is to help compile an efficient reference and resource list for people working in philanthropy – people who work for or with grantmakers or grantseekers – in keeping with PhilanTech’s mission to help social sector organizations maximize social impact. These lists, modified with any good suggestions received through comments, will be added to the Resources section of the PhilanTech website.
So without further ado, here are the top 5 resources for finding grant opportunities:
- Foundation Center
The Foundation Center is a national nonprofit that provides information about the foundation world to the philanthropic sector and others who want to learn about it. The Foundation Center maintains a database of the more than 98,000 grantmaking institutions in the U.S., drawn from their tax forms, other public documents, and voluntary reports submitted by foundations. It offers subscription-based access to its Foundation Directory Online (FDO); the FDO can also be searched for free in any of the Foundation Center’s libraries or cooperating collections.
- GrantStation
GrantStation is an online funding resource for organizations seeking grants throughout the world. A subscription-based service, GrantStation provides up-to-date, researched information about current funding opportunities. Grantseekers can search for foundation, state government and federal government funding opportunities, in addition to international funding opportunities. GrantStation also publishes the GrantStation Insider, a weekly update of current funding opportunities, grant-related training opportunities and more. Note: the Insider is sent at no charge to all subscribers to PhilanTech’s free mailing list.
- CharityChannel
CharityChannel is an online community for charity professionals in which articles and book reviews are published by nonprofit sector professionals. Available for a small subscription fee, the resources in CharityChannel include Don Greismann’s Grant Opportunities. Don Greismann publishes a weekly e-newsletter that includes current funding opportunities, and has written prolifically about grant opportunities, and the tools of the trade.
- Grants.gov
Grants.gov is the clearinghouse for Federal government grant opportunities. Applicants can search for current opportunities and can apply for Federal funding opportunities.
- GrantsAlert
GrantsAlert is a free, ad-supported, website that lists grant opportunities, with a particular emphasis on education grant opportunities for nonprofits, schools, and districts.
There are other research organizations that provide current information about local or issue-oriented grant opportunities, like Jankowski Research in the DC/MD/VA area (where PhilanTech is headquartered).
What are your favorite resources for finding grant opportunities? Add your favorites to the comments below.
(Full disclosure: GrantStation is a PhilanTech partner. We like them a lot. And I’m on the Foundation Center’s DC Library Advisory board. Both organizations are great resources for grantseekers and for the philanthropic sector at large.)
Top 5 graphic by http://www.flickr.com/photos/albertini/
Posted by Dahna Goldstein on Tue, Jun 08, 2010 @ 04:27 PM
Note: this post originally appeared on PhilanTopic (http://pndblog.typepad.com/pndblog/) in February 2010.
The nonprofit sector has been abuzz the last few weeks with talk of abandoning financial ratios in favor of program information to evaluate the impact of nonprofit organizations. The renewed focus on program measures was partially spurred by a joint press release issued by GuideStar, Charity Navigator, GreatNonprofits, and others.
There's no question that program information is essential in evaluating nonprofit performance and impact. But let's not get carried away.
There are good reasons to reject expense ratios as a tool for judging nonprofit performance, and they have been well documented (including here and here). I completely agree. It was, in part, the misplaced focus on expense ratios that led my company to team up with an expert in nonprofit finance several years ago to build a better financial analysis tool for the sector.
Many states require nonprofits to audit their financial statements. But while the quality of prepared and audited financial statements varies widely, much can be learned about an organization's financial health and stability by reading its audited statements and performing a few simple calculations. One can learn, for example, how many months operating reserves the organization has (a recent study showed that 53 percent of nonprofits in the Washington, D.C., area have less than three months, a significant vulnerability in these challenging economic times). Prospective donors also can see how quickly an organization pays its expenses, how well it is able to service any debt it has, and how much money raised in excess of expenses is available for investment in the organization's sustainability and growth. There's a wealth of information available -- if you know where to look.
Not everyone has the time or knowledge to analyze nonprofit financial statements. That's where our financial analysis tool -- and other tools like it -- can help. Based on nonprofits' financial statements, these tools typically produce a series of analyses that provide a detailed view of an organization's performance without presupposing specific financial analysis skills on the part of the person using them.
True, financial evaluation is only one tool in the nonprofit evaluation toolkit. But it's a critically important one as you make your donation decisions. A nonprofit that is doing great work but barely has enough cash on hand to sustain its operations is not likely to be an organization in which you'll want to invest. Or, maybe, if you believe in the organization's work, you'll decide to go all in and give it a larger donation with an eye to helping it survive. In either case, rigorous financial analysis can help you make an informed decision.
As the sector continues to explore ways in which program information can be used to evaluate nonprofits and help drive the more efficient allocation of scarce resources, let's be careful not to throw out the financial baby with the expense-ratio bathwater. And remember: Informed donors are effective donors.
Posted by Dahna Goldstein on Mon, May 17, 2010 @ 04:01 PM
Common Grant Applications
Common grant applications seem like a no-brainer, right? If colleges can get together and agree on a common application, why can't foundations? Seventeen associations of grantmakers have painstakingly brought groups of their members together and created common application and reporting forms (see the Foundation Center's list of common grant applications). The idea is to have all grantmakers in a region accept the same form, thereby enabling grantseekers to create one grant application and submit it to multiple grantmakers. The common forms aim to save significant time for the grantseeker.
In principle, this is a great idea.
In practice, it has some problems. In many cases, only a fraction of the association's members actually accepts the common forms. In other cases, the associations acknowledge that some grantmakers that accept the common forms make modifications to the agreed-upon forms, or require additional information from their grantseekers. In addition, nonprofits offen apply to a range of grantmakers, not all of which are members of a particular regional association.
Don't get me wrong. I'm all in favor of anything that streamlines grants management and saves time for both the nonprofits seeking grant funds and the grantmakers awarding those funds. The PhilanTrack online grants management system supports the common forms developed by the regional associations of grantmakers. And PhilanTech's research with the Urban Institute suggests that there are many commonalities in the information requested in grant reporting and application processes by foundations. Those commonalities serve as the basis for PhilanTrack's "Find Similar Questions" functionality.
But common forms only go so far if not all grantmakers accept them, if grantmakers both modify them and require additional information, and if multiple common forms are in use around the country.
There are some pieces of information that almost every foundation requests of its applicants (proof of 501(c)(3) status, for example), and it would be ideal if nonprofits did not have to reenter or re-upload that information for every grant application. PhilanTrack's approach is to enable easy reuse of common information while still enabling foundations to request information from grantseekers in a way that meets their individual process and decision-making requirements.
What do you think? Is it possible to create one common form that each of the 75,000 foundations in the U.S. would use? If not, what are other ways for foundations to get the information they need to make good decisions and be responsible stewards without placing undue administrative burdens on nonprofits?