Foundations

Look at the big picture and learn from every victory and defeat. And avoid budgeting a large grant when there is uncertainty as to the outcome of the request.

This week’s question is from Alex, and it’s about cultivating foundations. Remember, cultivating means building relationships. Specifically, Alex wants to know: Should you cultivate foundations the same way you cultivate individual donors? The answer is, “Absolutely yes!”

That said, there are different kinds of foundations and they need to be treated differently. For example, you’ll need to take a different approach with family foundations (treating them much more as you do individual donors) than you might a corporate foundation that follows lot of formal policies and procedures.

Whole Me began 11 years ago with a grassroots effort. People who worked with deaf and hard-of-hearing children saw a problem. The kids they were interpreting for in school were going home to afternoons of isolation. So they built a solution: An after-school program for deaf students. No one got paid. The office was a dining room table. Over the next decade, Whole Me grew little by little. The budget reached six figures. But it took failure in 2011 for the small organization to find a solid path to financial security.

Foundation Source, provider of comprehensive services for private foundations, released the 2014 edition of its Annual Report on Private Foundations. According to the report, 2013 was a strong year for those private foundations with less than $50 million in assets, a segment that constitutes 98 percent of all U.S. foundations. The combination of a recovering stock market and additional contributions by their funders resulted in increased foundation endowments for a second straight year, in spite of charitable distributions that exceeded the 5 percent minimum by almost 50 percent.

We all have gatekeepers and influencers in our lives — and so do our donors. Some are formal, and some are informal. They can be family, friends, staff or professional advisors. As you develop strategy — your moves management — be sure to learn who they are and even if you feel you have a great relationship with the donor. Don't get caught surprised! Know the gatekeepers, and nurture relationships with them!

What are foundations doing to make more efficient use of their grant making? The Chronicle of Philanthropy mentions four trends in current grant making that charities should be aware of: interest in tackling really big problems, making social services more effective, encouraging struggling charities to merge with or partner with stronger ones and spreading the ideas that work.

This new emphasis by foundations on pooling resources and bringing in multiple players to solve big problems could be a signal for nonprofits to look toward mergers, cooperation and cross-agency projects before even approaching a foundation.

A foundation can gauge and improve its impact through an operational and financial commitment to evaluation, investment in building staff capacity, and a willingness to ask hard questions and change course based on the answers. In this article, we describe the concept and practice of strategic philanthropy, lay out the essential role that evaluation and impact measurement play in that approach, and share the framework and process that we have developed for measuring results at the Walton Family Foundation.

As foundation executives leave for Capitol Hill to educate members of Congress about issues in philanthropy, one wonders whether the complexities and challenges of U.S. philanthropy haven’t been so downplayed in the foundation sector lobbying as to lead legislators into inappropriate conceptual byways. The simplification of philanthropy for the purposes of speaking to Capitol Hill legislators and staff members may be counterproductive in the long run.

Donor-advised funds have made it easier for moderately wealthy people to think of themselves — organically — as charitable investors and function with charitable giving as a part of their investment mindsets. Whether you think DAFs pay out enough or not, their impact is in making charitable giving for moderately wealthy people easier, more strategic and more natural. For charities interested in reaching individual donors, getting comfortable with donors who give through donor-advised funds has to be a top priority in the new world of fundraising.

Nell Edgington of Social Velocity interviews Daniel Stid, senior fellow at the William and Flora Hewlett Foundation. He serves as an advisor to the foundation's president, Larry Kramer, leading the exploration of a potential foundation initiative to support and improve the health of democracy in the U.S. Before joining the foundation, Stid was a longtime consultant and strategist to governments, nonprofits and for-profit organizations, including as a partner in The Bridgespan Group’s San Francisco office, where he co-led the organization’s performance measurement practice.