This week's tips:

Trends in Foundations

I thought that it would be a good time to briefly discuss some trends in foundation giving to coincide with the statistics on giving, which were published in the Chronicle of Philanthropy on April 15th. 

The 65,000 private foundations across the United States gave almost $30 Billion dollars in 2003. This was down from $750 million from the previous year. Will this trend continue or will the recent advances in the stock market cause a ‘bump' up in giving during the next year?

Foundations have been through a very difficult time during the past three years . Most private foundations, by law, are required to contribute 5 percent of their corpus yearly minus administrative expenses.   Most of the larger staff foundations actually contribute around 3.8 percent (after salaries and all administrative costs). According to the article in the Chronicle of Philanthropy about “forty-five percent of the foundations said they expected giving to increase this year, while thirty-six percent expected no change in giving levels." Part of this is due to the fact that most foundations calculate their granting budgets on a three year rolling average of their total portfolio, so it sometimes takes more than a ‘recent bump' in the stock market before the upswing translates into their granting program. 

In an election year, giving generally increases . Even so, with state and local governments dramatically cutting their giving to arts, culture and health and human services organizations, the competition for the foundation dollars is still quite severe. With this type of serious competition, foundations look for reasons to turn down requests for money. 

On this less than positive note, let's look at some recent trends in foundation giving across the United States to see if we can find anything to give us hope ;>:

1. Foundation giving has decreased the most in areas such as health (-15%), social sciences (-11%), environment/animal organizations (-10%); while support increased in religious and faith based giving (+22%), science and technology (+16%), and international affairs (4%).
2. Foundations are continuing to give to specific programs , projects and capital campaigns. We have also noticed a trend with community foundations increasing their giving to general operations (which are typically the hardest dollars to raise).
3. Small family foundations are growing quickly   and probably make up 80 percent of the total number of foundations. Most of them grant less than $1 million per year; generally they do not have staff; they frequently lack guidelines; and they are comprised almost exclusively of family members. The access points to family foundations continue to be the trustees or family members. It is well worth your time to research these individuals, make copies of their information (including location, line of work, etc.) and circulate this information to your leadership, volunteers and friends. If you can't make a personal connection, it is worth it to write a letter of introduction if your research shows that they have an interest in your program or organizational areas.
4. Community foundations are also growing rapidly . When wealthy people set up trusts through community foundations, most of those dollars are designated to specific issue areas. Ask the program staff about these donor advised dollars.
5. The biggest percentage of growth came from corporate foundations, an area that grew over 10.5 percent. This might be surprising, but with the increase in corporate stocks and the general optimism of the rebounding economy (within the corporate board rooms), we are seeing expansion in this area. When approaching corporations, be sure to  emphasize how their dollars will come back to support their image, credibility, bottom-line, et cetera.
6. There is continued growth in the foundation ‘ affinity groups ' that are organized through the Council on Foundations. These are associations of private and corporate foundation leaders that gather together around specific issues to increase their knowledge and to support one another . Go to www.cof.org and research these affinity groups.
7. It is a good idea to research l arge family foundations (as opposed to small family foundations that we described above) on Guidestar at www.guidestar.org (take a look at their 990 forms), then contact other nonprofits that have received grants from them to see if they might provide you with a few strategies in approaching that particular foundation.
8. A more sophisticated approach to working with foundations is to recruit your ‘best friend' in the foundation community to host a luncheon. Invite other foundation leaders to the luncheon to hear your story. The host handles the invitations and the introductions and you conduct the educational session. It is a good way to get in front of many funders at the same time.
9. Get to know the operating foundations in your community and across the country.   These are generally larger foundations that operate their own programs. Some of the foundations are huge such as Roberts Woods Johnson at www.rwjf.org and Anne E Casey at www.aecf.org . These types of foundations are constantly changing their initiatives, and many of them will allow unsolicited concept papers of 2-3 pages.
10. Remember not to forget p hilanthropic trusts. These "foundations" generally operate out of banks and act much like small family foundations, except the bank's trust officers usually manage the money and play a role in determining who receives grants. Use your banking relationships to introduce yourself to the trust officers and ask if you can be placed on their approved list of grants.      

If you need help with your grants program, give us a call. Contact Nicolle Fogleson at 303-355-2919.