Last week the venerable Chronicle of Philanthropy shared the news, gleaned from a study carried out by Foundation Source, that small to mid-sized grant-making foundations actually exceeded their payout requirements in 2009.
Foundations are required by law to spend 5% of their investment assets each year (although not necessarily solely via grant payouts). Foundation Source, a company that works with family foundations, found that “among 700 of its clients, the number and size of grants less than $1-million increased by 15 percent last year.” Typically these were foundations with less than $100-million in assets.
According to Foundation Source’s president, Andy Bansger, “small to midsize family foundations stepped up dramatically in this tough economy to assist a wide variety of people, organizations and causes.”
So, what, exactly does this mean to your small nonprofit organization?
I hate to say “I told you so” – truly I do, but what this says to me is that every small to mid-sized nonprofit out there needs to establish a sound grants system in place within their organization, one that includes:
1. Regular foundation prospect research (weekly at the bare minimum; preferably daily). Don’t have a subscription to Foundation Directory Online? I’m offering a limited time personalized webinar teaching you my secrets to learning how to find foundations to support your mission. Attendees are guaranteed a minimum of 10 prospective new foundation funding sources – and will receive a free copy of my book “Five Days to Foundation Grants” along with my grants toolkit – filled with samples of funded grant proposals (a $79 value!). Sign up now.
2. A compelling case for general operating support. One recent Foundation Center report noted that, not only has foundation giving increased by 14.6% in 2006, but foundation grants for overhead costs grew by 6.7%. Likewise, the Center for Effective Philanthropy, after surveying 20,00 grantees and 79 foundation executives, noted that foundations “should make larger, longer-term operating grants” of unrestricted funds that can be used to support the organization and its overall mission, not just specific projects or programs.”
Your time may be more effectively spent if, instead of spending weeks developing a program-based grant proposal to that $300-million dollar foundation for $75,000, you seek out 10-15 smaller foundations for general operating support grants from $1,000-15,000.
I personally guarantee less headaches when reporting time rolls around.
3. Lastly, don’t forget your follow-up. Read Behind the Scenes at a Grant-Making Foundation to learn the importance of good follow-up and the three questions you need to ask following a proposal declination.
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