Developing Partnerships with Foundations

For some organizations, foundations are major funders and thought partners. For newer or smaller organizations, partnering with foundations can help to grow their impact. I am often asked how to approach securing foundation funding. Here’s a quick primer on foundations and considerations for applicants.

What is a foundation, and how much do they give?

• A foundation is an independent legal entity established solely for charitable purposes. There are several different types of foundations, but they all have wide latitude to set their missions and distribute grants. The types of foundations that you are most likely to be seeking grants from are:
  
  • Family Foundations: funds come from a particular family and family members have key roles in setting the foundation’s goals and priorities. They vary widely in terms of size and staffing; some are professionally staffed with clearly articulated goals and processes, while others may consist of family members determining grants without formal selection criteria.
    
  • Corporate Foundations: are separate from the corporations that establish them, but are closely tied to the company. They typically focus their grantmaking on charitable goals that relate to their business (e.g. an engineering company supporting STEM education) and/or give primarily in their main geographic area.
    
  • Independent Foundations: unlike corporate and family foundations, they are not governed by a single company or family. Most of the large foundations that are household names fall into this category.
    
    
• In 2020, foundation giving was 19 percent of giving in 2020 ($88.55 billion), the largest amount ever.
  
  

If you’ve never received a foundation grant before, where do you start?

• Are you ready? Do you have the accounting infrastructure to track grant funds and the ability to complete required reports? While foundations face few restrictions on what types of organizations they can support, most will require common documentation including your IRS Form 990, a list of your board of directors, and confirmation of your 501(c)(3) status. If you don’t have these things yet, you will likely need a fiscal sponsor to receive grants.
• How do you find the right foundations? Foundations have very focused missions, and in my experience, this focus takes two paths—issue area and geography. For example, if your organization focuses on youth art programs, look for foundations that name this as a program area, but also for the foundation players in your local area. Local foundations often support a wide range of organizations in their communities. If you’re starting your research from scratch, keep it simple and look at annual reports of peer organizations to identify foundation prospects. You will find that many foundations do not have websites—many organizations utilize Candid’s Foundation Directory Online, which is a paid comprehensive database and is useful for researching foundations that lack a web presence. If subscription fees are a hurdle, many libraries have access.
  
  

Once you have identified foundation prospects, how do you approach applying?

• Open applications and proactive outreach. Foundations usually state whether or not they accept unsolicited applications. If they do, they will outline a clear process on their website. Read carefully, with special attention to deadlines and the types of projects they do and do not support. If you have questions, reach out, unless they clearly request no contact. While it can be intimidating to speak to a foundation representative, you will be surprised by how accessible some people are. They want to get to know your organization, and if your mission is not in their scope, a conversation will save you time-consuming work. Don’t take a “no” personally—foundations have clearly defined missions and goals. Be polite and gracious even if you are disappointed. Even if you don’t achieve your desired outcome, initiating this relationship can be extremely valuable—particularly with local foundations. They may recommend other funders that are a better match for your work.
• Closed applications. Some foundations are unapproachable, with the dreaded “no unsolicited applications” language on their website. Where do you go from there? Don’t be intimidated—even the largest, most well-resourced organizations have trouble getting in the door. The best approach is to start with relationships—look at your organization’s closest supporters and do some contact mapping. Do any of their networks overlap with foundation staff or board members? Utilize LinkedIn and ask your supporters directly if they have relationships and can make an introduction.
  
  

If you’re successful in receiving a grant, what comes next? Next month, I’ll share some special considerations when stewarding foundation grants. Stay tuned!