Foundations Aren’t Much Interested in You
This month I am proud to share a guest blog post by Laurence A. Pagnoni, MPA, Chairman of LAPA Fundraising.
[For this post, I interviewed the president of Candid, Brad Smith. You’ll learn that only 24% of U.S. foundations accept unsolicited proposals, but you’ll also learn that 57% of the wealthiest foundations welcome them.]
“America's foundations are not particularly interested in receiving your proposal.” – Bradford K. Smith, President of Candid
Grateful for Brad Smith’s candor and leadership over the years, I rang him up for a chat. Initially, I wanted to know if what our grant officers suspected was in fact true—that most foundations do not welcome your proposals. I wrote about this in my 2019 blog post “Do Not Apply”: Five Ways Around This Private Foundation Roadblock. The three dreaded words for grant officers are “do not apply—DNA.”
Jumping right in, I asked Brad if the “do not apply” restriction has worsened. “It’s about the same,” he said. “It has been a longtime problem. We phrase it as open applications versus closed applications. The data I am referring to is for U.S. foundations (excluding public charities). The ‘accepts applications’ figures are based on those foundations that specifically have some application information for us to work with. We have some foundations that definitively say that they will not accept applications. We also have a large number of entries with no information supplied either way. These are not included in our counts.”
Of the 101,542 independent, company-sponsored, and community foundations based in the United States, only 24,035 are willing to accept unsolicited proposals. That’s only 24% of the whole. Can I get a collective groan?
In general, the stats are pretty close to what they were in 2015.
But Brad offered me a silver lining amid this bad news.
He said that in the United States, 1,263 foundations have $100 million or more in assets, and they account for close to half of all giving by U.S. foundations. And of those, 711 (or 57%) accept unsolicited proposals. That’s better news for sure.
This most lucrative subset of foundations has the staff and a staffing infrastructure that make accepting unsolicited proposals possible.
One key reason that many foundations do not want to accept your proposal is because they will spend most of their time saying “no”! They generally receive 10 to 20 times more applications than they can fund. They don’t want to pay for a staff and an infrastructure just to have to say “no” all the time.
A second key reason involves concerns about preserving their privacy. That’s because 60% of U.S. foundations are family foundations with zero to little support staff, and they have concerns about the safety of their families.
Brad offered a few other key takeaways of note for grant professionals.
First, 92% of American foundations do not have a website. That’s not good—in part because when there’s a change from “all applications welcome” to “solicited only,” that information doesn’t show up on Candid’s database until the next tax return, a year later, but it could be discovered sooner if the foundation had a website!
Second, it is very good that many foundations invite Letters of Intent (LOI). The LOI is a middle ground between an open and closed application process.
Third, some foundations do invite nonprofits to apply, which is a healthy step so that they avoid parochialism and learn from the field.
Fourth, in 2019, federal legislation through the IRS required tax-exempt organizations to e-file their tax form 990. That change will infuse Candid’s databases with more juicy information that will help nonprofits research foundation prospects better.
Lastly, it's important to know that Candid crawls the web for foundation news and passes that onto its subscribers in its newsletters. You can sign up here.
A great fundraiser will never be stopped by the DNA status or the low open application rate. We share this data not to depress you, but to drive home how important upfront grant research is to deepen and grow your foundation funding pipeline.
Two final tips from Brad: There are foundations that we don’t know if they accept applications or not. You have nothing to lose by sending in a thoughtful letter of intent that seeks their advice. You know the adage, “If you want advice, ask for money; if you want money, ask for advice.” It applies here.
Finally, invite your foundations to your webinars, sign them up for your newsletters, ask them for phone or Zoom updates with your program directors so they can get to know you. Fundraising is all about relationships.
Laurence is author of Fundraising 401: Masterclasses in nonprofit fundraising that would make Peter Drucker Proud, available here. Celebrating his 26th year, Laurence serves as Chairman of LAPA Fundraising, and is a 35-year member of the Association for Fundraising Professionals. You may learn more about him at his website.
Juliana M. Weissbein, CFRE is a respected leader and decision influencer in regard to fundraising operations best practices. With over a decade of experience, Juliana thrives on professional growth, team success, measurable results, and inspiring fundraisers to utilize data-based strategies. Juliana currently serves as the Associate Director of Development Operations at Planned Parenthood Federation of America. She is AFP Global's 2019 Outstanding Young Professional Fundraiser and is a member of the AFP Global Women's Impact Initiative. Juliana is immediate past chair of the AFP New York City chapter’s Emerging Leaders Committee and currently serves on the chapter’s board chairing their mentorship program. She resides in Austin, TX and never turns down a good kombucha.