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Foundation Grants for Nonprofits: 8 Reveals of What Grantors Want

Jul 9, 2019Donors

Foundation-Grants Donors

Foundation grants and funding for nonprofits should be a part of any charity’s source of revenue.

In the recent report provided by Giving USA, charitable giving by foundations had a record-breaking year. In 2018, foundation giving reached its highest-ever dollar amount (over $75 billion) and largest share (18%) of total giving.

If you are a small nonprofit serving a community, state, or region, tap the many local foundations in your area – private, corporate, family, and community foundations — because you want to diversify your funding.

Do your research to determine the priorities and what causes the foundation from which you are seeking support are most interested in funding. Get to know the decision makers at these foundations. Utilize your board members to make introductions.

Foundations are frequently small-staffed, but the staff are often highly engaged in the community. They want to be approached with great funding opportunities that align with their funding priorities, so determine their priorities.

At my local Association of Fundraising Professional (AFP), Alabama Chapter meeting last year, representatives were recruited from four area foundations to provide guidance on their funding request processes. 

Below are the highlights from the panel discussion on applying for grants. Nonprofits need to get clear in these eight areas before applying for funding from a foundation.

To receive foundation grants for your nonprofit, focus on getting these areas right: 

1. Clarity of Mission and Funding Request

Construct a one-page cover letter clearly explaining what you are trying to accomplish. Make your request concise and easy to follow, so you don’t make the grantors burn too many mental calories trying to understand your project. Read 7 Elements of a Major Gift Proposal.

2. Collaborative Efforts

Grant funders do not like to see duplicate efforts or overlapping services from nonprofits of similar missions. It signals a lack of cooperation and collaboration and not good use of funds.

Funders also want to know what other foundations or entities are supporting the project. State how you are working with other nonprofits and entities. 

3. Inspiring Stories

There is no better way to convey a message than through storytelling.

Use inspiring stories to show the impact of your work and how you are making a difference. Use supporting data to support your stories. Provide an emotional tie to your organization’s work. Grantors are humans with human emotions. Tap into those emotions to convey your impact. For more about storytelling, read How to Incorporate Storytelling in Fundraising.  

4.  Measurable Impact

It may be difficult on some projects to provide measurable results, but you must determine how to measure the impact of the project. Funders want to see a return on their investment (ROI). 

Foundations want to see that your organization is well established, making an impact, and sustainable before it provides funding.

5.  Innovative and Creative Solutions

Consider creative solutions to your funding challenges. You are not looking for a handout. You have had success and want to take the project to the next level to impact more lives, your community, the world, for example.

Given you have a successful track record, grantors will fund new programs or grow an existing one. Funders are typically less inclined to provide funding to keep the light on and doors open. However, some foundations do provide operational needs.

6.  Sustainable Programs

Funders want to know your strategies to support your project after their infusion of funding has ended.

Try answering these questions:

  • How will you sustain the program?
  • How will you continue to operate the program and address the needs?
  • Will there be revenue streams, annual giving, earned income, campaigns, sponsors, government funding, for example. 

7.  Aligned Budget

It is important how you present the cost of your project. Make sure your budget aligns with your project goals. Don’t request an unrealistic amount. It is impractical for one grantor to fund a majority, for example, of the total cost of the project. Funders will review your IRS 990 to ensure you are financially healthy, often looking at cash on hand and assets.

8.  Engaged Board Members

Grant funders want to see a high level of board engagement and giving. Stress to your board the importance of 100% board giving participation and how it influences funding from grant makers. If the board is not contributing and endorsing the organization with their gifts, why would others invest?

Who is on your board matters. In your grant applications, list your board members and their business titles. Most foundations welcome nonprofit leaders and board member to contact their board members. Let board members know your grant schedule, and ask if they have any connections with the funding organizations. Ask board members to call or write a letter of endorsement. It's all about relationships.  

Summary

The increase in giving by foundation and corporations in 2018 emphasizes the importance of nonprofits to diversify their giving revenue.

Consider seeking funding from foundation grants for your nonprofits. Like all fundraising, it’s about relationships. Develop relationships with the decision makers, so you can understand what grantors will and will not fund. Align those gifts and submit a well thought out application.

Note: Charitable gifts received from individuals continues to outpace all other giving, including foundation and corporate giving.

How are you diversifying your giving stream?

 

Nancy Rieves, Ed.D. is a fundraising coach. She provides executive and development directors with a roadmap to maximize and sustain major gift fundraising. She prepares leaders to be confident and successful in raising money. Reach her at [email protected].

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