Thursday, January 21, 2010

Adapting to the ways foundations have changed in the new economy



Would you like to know the most important tool in researching appropriate grants from philanthropic foundations for your nonprofits? Read on. ...

Today's post deals with seeking grants from philanthropic foundations. (One of my foundation clients tells me it's redundant to say, "philanthropic foundation." She may be right.)
In the "new economy" (the recession/post-recession era), nonprofits have had to make many adjustments. So have foundations. Understanding those changes can mean the difference between securing appropriate grants the are available and getting a rejection letter from a foundation.

First, the bad news. Every foundation operates differently, and some are more affected by the recession than others. But many operate on the basis of a 5 percent annual distribution of their assets. That means if a foundation has $100 million for a given year, it would make grants totaling $5 million.

Now, this entire post may strike some of you as a BFO (that stands for "Blinding Flash of the Obvious"), but stick with me. The recession affected the investment portfolios of foundations just like it affected your retirement savings account. They lost money. Between early September of 2008 and early March of 2009, the stock market lost about 42 percent of its value. Every foundation invests differently, but most lost assets during this timeframe -- the same timeframe when many of them they are setting their grantmaking allocations for the year.

Short story: The recession has been rough on everyone, including your friendly foundations.

Now for the good news. Foundations, like everyone else, have been hard at work adapting to this new economic environment. and they are still making grants. It is likely that the foundations you deal with are making fewer or smaller grants, but they are still there, doing their good work to provide nonprofits with some of the funds they need to fulfil their missions.

Some foundations have made small, incremental changes; others have changed their entire grantmaking framework.

So here's my point. When writing a grant, the most important element is research. Before you ever sit down at the keyboard with a grant application, research the foundations you deal with. Find out what types of grants they are making today and which ones they've curtailed for now.

This research is an easy two-step process that can save you hours of frustration and quite possibly help you secure needed dollars.

1. Step one: Check out every word on the Foundation's Web site. Many foundations have changed their grant guidelines and applications in recent months. Knowing which types of grants are available, and which ones you may qualify for, is the key to success.

2. When you find what appears to be a good fit, and after you have done all your homework in step 1, pick up the phone and call the foundation; the telephone is the tool that I alluded to in the introduction to this article. The foundations I deal with welcome appropriate calls (I can't speak for all foundations here, though!). You want to have done your homework so that you are asking specific, procedural questions; not "What should I apply for," or "How much should I apply for." And don't ask whether "this would be likely to be approved." That's up to you and your research in step 1. But if you have found a good fit and you want to make sure, for example, that the information on the website is still current, or that funds for the year are still available in this grant category, or whether you are completing the right application form, call! Foundations welcome thoughtful, specific, clarifying calls because they want to help you. Foundations don't want to overlook good grantmaking opportunities, so they want to hear from nonprofits with a qualified need. And no foundation executive likes to see you spend time on an application that isn't a good fit to begin with. So just talk with them! E-mail is not a good substitute; the two-way dialogue is where you'll learn what you need to know. Be brief, respect their time, and have your thoughtful, well-researched question(s) ready when you call. There's simply no substitute for this step.

I said there were two steps, but I'll offer one more tip. Don't try to jam a round peg into a square hole. What I mean is, don't try to get crafty and formulate your request so it "sounds like" it matches the foundation's criteria, if it does not. First, foundation people are too smart for that and they find it annoying and manipulative, which won't reflect well on your organization; also, the pool of applicants for grants is more competitive than ever. So it's better to continue your research using steps one and two until you find a foundation whose current grantmaking really is the right fit for you.
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Note to blog readers: I had to disable comments on my blog for the time being because I was under some sort of spam attack, getting hundreds of spams a day. To comment on any article, just email me at info@highviewhelp.com and I will post the comment.Steve Cebalt, Nonprofit Consultant(260) 471-5870 HighviewHelp.com
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