Giving USA Reports Foundation Giving on the Rise in 2014

This morning’s press release from The Giving USA Foundation reports that overall foundation giving for 2014 logged in at 8.2% higher than 2013.  Adjusted for inflation, the figure clocks in at 6.5% higher.  Foundation giving accounting for a full 15% of overall philanthropy, reflecting an overall high for this sector.

The report appears to substantiate The Foundation Center’s prediction that overall foundation from November 2014 that  foundation giving was experiencing an uptick, with contributions increasing among both independent and family foundations.  The Giving USA report notes that independent foundation giving does indeed drive the increase according to its researchers.

Link to both reports/releases below:

Giving USA 2015 Press Release

Foundation Center Key Facts 2014

Grantwriting: The 40% Proposition

Each fall, I teach a course on foundation and corporate grants as part of Columbia University’s Masters in Fundraising Management program. In our first class, after the usual introductions, I tell my students the following: “60% of writing a grant proposal involves following the instructions; the other 40% involves choosing your words, choosing your approach and making the right connection with the reader — that’s the fun part!”

Now I realize that “grant writing” and “fun” are not two words/figures of speech commonly found in the same sentence. But I look at most applications as a puzzle or challenge to be worked out. Who is this foundation? Who is the individual reading my proposal? What might motivate them to take this application seriously and, better yet, take action on it and become a stakeholder in our work?

To me, the 40% boils down to the following:

1.Understand the prospect. This is one of the basic tenets of all successful fundraising. How do I make the right connection between my opportunity and what the donor wants to accomplish via their philanthropy.

2. Move from need to opportunity. Speaking of which, its more about opportunity than need. Most grantmakers understand the needs and problems we are addressing. And most don’t know about the opportunities we have to do something it.

3. Frame your story. For most foundation readers, engagement comes down to context. Are we presenting too big of a picture to the reader and, in doing so, suggesting that we are trying to bite off way more than our organization can chew? Are we presenting too small of a picture, asking for a lot of money to help relatively few people? Or are we framing something that balances capacity with our capability to stretch to do something more — and hence the need for a foundation’s support?

4. Pick up clues and cues. I read foundation websites for way more than the application instructions. What kind of language do they use? Is their point of view “old school” or “new school”? What are the foundation’s particular values?

5. Mirror, Mirror. Picking up on clues and cues, how can I write in a way that will demonstrate to the reader that we have comparable values, points of view, approaches? And if we don’t match on every point, how are our differences in approach complimentary?

6. Choose your words carefully. Every semester, I assign Tony Proscio’s wonderful essay “In Other Words” to my students. It is an incredibly thought-provoking work about how language is used among grantmakers and grantseekers and how content can get lost in jargon.

60% perspiration, 40% inspiration? Interpretation vs. information? How do you view the writing process? Continue the conversation below.

2014 Foundation Giving: A Cautious Comeback

Year-in-ReviewI  love the days immediately before the New Year begins. For me, they are filled with reflections of the joys and challenges of the prior 11.9 months and anticipation for what is to come. Anticipation is a good word as we stand on the verge of 2015, since we are ending a year in which foundation philanthropy seems to be solidifying a long-awaited comeback.

The conventional wisdom is that foundation giving will always remain strong as we head into a recession (after all, many give based on prior-year returns when the market was stronger) and will trail a recovery (alas, the same principal still at work but based on a weaker market). The Great Recession seemed to have challenged that rule significantly since not only were foundation boards trying to sustain their philanthropic mission (not to mention the minimum 5% distribution) but were at the same time trying to rebuild endowments. Talk about building the boat as you sail across an ocean!

And lets not forget the game change of the disappearing foundation. Atlantic Philanthropies is in its final spend-down phase having left an enormous legacy, a deep footprint on its way to leaving a significant void among the giants of the foundation world. To be sure, new “Atlantics” are abloom but perhaps being created with the same notion of spend and invest generously during the lifetime of the donor. I refer to this as “supernova philanthropy” — a magnificent burst of energy as a star explodes leaving behind a beautiful aura as a legacy for astronomers and star-gazers (like moi) to behold.

Which brings us to “The Cautious Comeback.” For your consideration:

* According to Giving USA 2014, foundation giving marked a 5.7% increase in 2013.

* The Foundation Center’s own “2014 Key Facts” report published in November 2014 predicts that when all is said and done, ” overall foundation giving will continue to grow a few points ahead of inflation in 2014.”

* The 2014 survey of 637 foundations by Grantmakers for Effective Organizations found that the median level of grants devoted to general operating support rose to 25 percent in 2014, up from 20 percent in 2011.

* Foundation Source, which consults to and helps family foundations manage their funds notes in its annual report that “the combination of a recovering stock market and additional contributions by their funders resulted in increased foundation endowments for a second straight year, in spite of charitable distributions that exceeded the 5% minimum by almost 50%.”

The conditions for a comeback have been created and creatively used by foundations to increase giving. Looking ahead, I see both opportunities and challenges:

Opportunity: General operating support grants are on the rise as many grantmakers seem to be willing to help charities maintain/sustain operating infrastructure costs. According to a colleague in foundation world, this may be because they have seen many grantees make efficient, wise and pragmatic management decisions during the recent financial crises and this has reduced the sense of risk in these types of grants.

Challenge: I see more foundations closing portfolios, preferring to continue to support long-time grantees. Finding new grant opportunities is becoming more difficult and time consuming, adding to the length of time it takes to build or expand a grant portfolio.

Opportunity and Challenge: From my own work as a consultant, I have seen how many foundations have emerged from the Great Recession with stronger, more-targeted philanthropic investment strategies. This will be boon to some and a barrier to others.

I close by wishing all of you every success in your grantseeking efforts in the year ahead. May 2015 bring the investments of others toward the good you bring to those who benefit from your mission, passion and good work.

Rebound? Giving USA Reports 5.7% Increase in Foundation Giving

Its high noon, Eastern Time, and am taking a look at the just-released information from Giving USA’s report on 2013 philanthropy. Two items jump out at me this time around.

•Foundation giving overall posted a 5.7% increase. This is better than the previous 2% to 3% gains which kept foundation philanthropy just about on an inflationary par. This likely reflects a good market earnings year for foundation portfolios coupled with the creation of some new foundations over the past year.

•Giving to foundations, adjusted for inflation, made up 11% of philanthropic giving. Very significant. Nonprofit Quarterly appears to have taken a closer look at this number at it appears to be weighted by mega-gifts to large foundation trusts from donors like Mark Zuckerberg, Michael Bloomberg, Paul Allen, et. al. Potentially big and promising news for those charities operating in the spheres of interest and influence where those donors are making investments.

Read more from the Nonprofit Quarterly here

How do these numbers compare to your results?  Is foundation giving higher for your organization?  Please add your thoughts!

 

Impact Imminent: Wall Street Journal Reports Family Foundations Spending Down Faster

 

A recent study by the Bridgespan Group reveals that only 5% of the total assets of America’s largest 50 foundations were held by spend-downs, compared to 24% in 2010. This means that nearly one-quarter of the assets of the 50 largest foundations in the US will be spent within the lifetime of their founders/donors.

What is driving this change in philanthropic strategy?  A generation ago, foundations were seen as legacies by founders intended to perpetuate good and philanthropic intentions and, perhaps, to instill a philanthropic legacy among family heirs.  This may well be giving way to a new philosophy, embodied by next generation foundation philanthropists like Charles Feeney (Atlantic Philanthropies), Warren Buffet and Bill and Melinda Gates where the donor sees the Foundation as a strategic mechanism for meaningful philanthropy.  This is leading toward gifts — more accurately, philanthropic investments — that are likely to bring about more immediate and meaningful change.

Another reason for change is that the peer landscape has changed among the largest foundations.  One third of the largest foundations where founded within my working life time of 26 years.  Many were created as a by-product of new tax laws in the 1990s which encouraged young entrepreneurs to create foundations as a means to shelter income and lo and behold, many of those entrepreneurs have applied their acumen and aversion to risk to making a difference for the charitable sector.

We are now raising foundation money at a time where risk and reward are more prominent factors in giving and where a new generation of foundation donors are adopting strategic approaches to their philanthropy.  Read Veronica Dagher’s excellent Wall Street article here

Does opportunity abound or will these changes favor the few?  Is your charity seeing stronger and better results?  Please add your thougths!

 

Eyes on the Dashboard: How Do You Measure Your Grantseeking Efforts?

Frequently, I am asked to measure the success of a grants program.  Of course, the financial measures are the most obvious.  But what about the intangible metrics of the program which go beyond dollars raised?   And why are these metrics important?

  • Are we raising the right money?  Grants bring an infusion of cash.  They also bring expectations and deliverables that very well may take you beyond your projected budget for a program or activity.  I have seen any number of significant grants that, six months down the road, led to cost overruns in the interest of meeting the requirements and expectations of a grantmaker.  Careful planning and budgeting are clearly a panacea for this problem. But so too is developing the right strategy and clearly communicating what you can realistically accomplish.
  • Are we adding the “right” foundations to our donor list?  Foundation giving brings two things to the table, cash and credibility.  While having enough money to pursue your mission and programs is critical, having the support of industry leaders is important too.  Recently, when assessing a grants program for a large nonprofit, I learned that the institution had a central goal of positioning itself as a thought leader in its field.  Understanding this goal helped me to not only assess how much money was being raised and how that money was being raised but which grantmakers had a “place at the table” and which ones needed to be cultivated and invited to support the organization’s growth agenda.
  • How strong is our network?  One of the most common misconceptions about corporation and foundation relations work is that the essential skill is writing.  I argue that CFR professionals must be — first and foremost — consummate at communicating content and able to build trusting relationships with foundation professionals and board members.  Writing is important too, but to be competitive we have to be known.  So, a metric to add to our dashboard would be “how many relationships have we built that may result in a grant and/or increased visibility in the sector?”
  • How well-known is our organization?  Visibility plays are role in all fundraising, including grantmaking.  The reality is that if your organization is known before your proposal hits an in-box (online or sitting next to a coffee cup on a desk), chances are that it will be read.  I would argue that CFR professionals and nonprofit CEOs alike have the responsibility to spend time away from the office raising the profile of the organization among your community of practice, one that not only includes peers, civic and political leaders and constituents but also includes foundations who play the role of major stakeholders.  This is not purely solicitation time but time spent gathering and sharing ideas and discussing challenges.  Showing yourself to be a thoughtful and connected leader helps to build credibility with potential grantor, which helps lead to an investment in your mission and programs.

The right donors.  The right money.  Visibility.  Connections.  What other metrics do you consider to be important?  And why?

Setting Priorities: Getting Better Results from Your Prospect List

Portfolio management is one of the trickiest propositions when it comes to success in grant seeking.   We know that we will likely have to invite support from an number of foundations in order to be successful (and hopefully, we will hear the answer “yes” sooner rather than later).  To manage a list of prospects, t the key to success is understanding where to put your time and energy when it comes to building relationships and spending time on applications.

Priority must be given to major gifts prospects (that is donors who will make leadership commitments needed to attract other support).  You should arrange your contacts into a schedule of cultivation and solicitation to take place over the span of a few months. To ensure you are able to cover all of these sources in the shortest possible time frame, I suggest that you prioritize your prospects by assigning to each a code that signifies the level of intensity of contact. This code will be based partly upon the level of gift you will be seeking and partly upon your perceived ability to connect with the funder (see below)

Intensity of Outreach Success Factors
CATEGORY 1 High
  • Has funded your agency before
  • You have a personal contact with an officer or director
  • One of your board members has a personal contact with an officer or director
  • Mission statement aligns tightly with focus of your program
CATEGORY 2 Medium
  • Has given to program very similar to yours
  • Assets and giving are large enough to accommodate a grant to your agency
  • Mission statement aligns tightly with focus of your program
CATEGORY 3 Low
  • New or small family foundation or local corporation with no established giving patterns
  • General priority match(i.e. gives to organization that fall within same genre as your agency or gives to local charities)

Using this rating system, you can organize your list into a list of “likely” prospects vs. “maybe” prospects which will help you to maintain focus.   For example, a high level gift prospect will likely be a well-established funding source with ample staff for you to connect and refine your approach. Or, this prospect may be a smaller, more low-key donor but with whom a member of your Board may have sufficient enough of a contact to open the door.  On the other hand, you donor prospect may be a family foundation who has given to agencies similar to your own. However, this foundation may be administered by a trust department of a bank where staff do not take the time to meet with prospective donors but rather collect and screen proposals.

The rating system yields an added bonus: setting and managing expectations about results.  Oftentimes, I will present a prospect list to a client using these ratings to help make it clear that for best results, we will invest more time with fewer key prospects where the chances of results will be higher and less time with a larger group of prospects where we will spend more time cultivating the donor.

Rating your prospects helps you to set and manage expectations, manage your time and, in the end, achieve better results.  Grant seeking can, indeed, be a numbers game.  Rule number one is to make the numbers work for you.

Interlude: Two (More) Grantwriting Soundtracks

 

I take a lot of inspiration from music and love to listen while I work. My earlier post, “Five Grantwriting Soundtracks,” received a pretty tremendous response with a lot of requests to post more listening suggestions.  Without further ado, two more albums in my current rotation.

Jason Isbell, Southeastern.

I absolutely love Jason Isbell. He writes amazing, plainspoken lyrics and sets them to powerful music. Just like you would want a grant proposal to “sing” to a reader. One listen to this album and you feel that you have entered a personal world from which you simply cannot look away. Select track: “Elephant” (Warning: explicit lyrics).

Foxygen, We Are The 21st Century Ambassadors of Peace and Magic

In the Sixties, The Grateful Dead famously sang “What a long strange trip we’ve been on.” This 21st Century nouveau San Francisco old school duo are continuing the journey on this offering that echoes Lou Reed, Bob Dylan, The Kinks, The Beatles and any number of great psychedelic power pop bands. No surprise at the number of Frisco references.  This is my go-to summer listen so far.  Select Track: “San Francisco”