Ever Consider Applying for Funding from Family Foundations?

Oct 9, 2017 | Fundraising and Giving, Philanthropy Journal, Resources

Nonprofits have an opportunity to look beyond the largest foundations and focus their attentions on the largely untapped reservoir of family foundations.

By Page Snow, Chief Philanthropic Officer at Foundation Source

When we think of private foundations, what first comes to mind are names such as Gates, Ford, and Rockefeller. But these billion-dollar foundations represent a very small segment of the philanthropic sector. Of the over 82,000 foundations in the United States, fewer than 50 have endowments of more than $1 billion. The vast majority, more than 90 percent, hold assets of less than $10 million. Most of these organizations are family foundations.

According to data from Giving USA, the amount of nonprofit organizations in the United States has doubled since 1995. And the competition for philanthropic dollars has grown just as dramatically. As the chances of getting a grant from the larger foundations increasingly decrease, many nonprofits are rethinking their strategy of applying to the philanthropic behemoth and are searching for more diverse funding streams.

In this environment, nonprofits would be wise to look beyond the largest foundations to the largely untapped reservoir of philanthropic dollars in family foundations. Many operate almost invisibly, often providing needed funding in their own hometowns. They don’t tend to participate in the same circles as professionally staffed philanthropies, and there are few associations or annual convocations where you can get to know them. So, approaching the smaller foundations requires some special handling, and the rules of the road for large foundations generally don’t apply. First:

Think relationships. Unlike dealing with large foundations, shipping off a well-crafted proposal to a family foundation is the last step in the cultivation process, not the first. If your new target is family foundations, you may want to hold off on hiring a professional grant writer. That doesn’t mean that family foundations never fund new organizations. They appreciate new ideas; they just need to be approached differently. As family foundation grantmaking is a relationship-based enterprise, your best strategy is to work your contacts. It’s essential to deploy your organization’s own board members effectively. Develop campaigns or “friend-raising” events that allow smaller funders to get to know your organization and board members informally. Instead of a grant writer, you may want to consider a professional volunteer coordinator who can develop meaningful opportunities for family foundations to get involved in your work. Then, when you do submit a proposal, be sure to personalize it rather than submitting a generic request.

Think unrestricted funding. Finding ways to network with family foundations is well worth the effort. Not only are they removed from the ferocious competition for grants from larger philanthropies, but many are willing to provide the holy grail of foundation funding—general operating support. There are other advantages to approaching family foundations. It’s less expensive to apply to them—in many cases, a short letter works just fine. And they’re not hung up on presentation. Many would rather receive a poorly written letter that represents the real words of an applicant than an elegantly crafted proposal written by a professional grant writer. 

Show where you fit in. It’s imperative to help family foundations understand how you compare to other nonprofits that operate in your same philanthropic space. Until they are convinced of the potential effectiveness of your proposal, they might well think that there is a better organization to tackle the project. Make your case, and make sure you include a narrative description of where your organization fits within the landscape of similar organizations. Make sure the family foundation supports the kind of program or activity you want funded. You should know the foundation’s priorities, and then pick one project that is the best fit by demonstrating significant expertise in the proposed area of funding.

Remember, it’s usually part-time philanthropy. Finally, give small funders plenty of time to review and digest your proposal. Family foundations aren’t professionally staffed organizations with three or four annual funding cycles. Oftentimes, it’s mom, dad, and offspring making funding decisions around the kitchen table. For these smaller foundations, philanthropy is usually a part-time pursuit. Nonprofits need to be mindful of families’ busy lifestyles and make sure they provide information and are available at times and places that are convenient to the family.   

While these smaller foundations may not garner the same attention as their billion-dollar brethren, at Foundation Source, we know how they are extremely dynamic, supporting charitable causes with an enthusiasm and effect that belie their size. Nonprofits have an opportunity to experience this passion as well. Good luck! 

Page Snow is the chief philanthropic officer at Foundation Source. Prior to joining Foundation Source, Ms. Snow spent over 10 years with The Pew Charitable Trusts as the Chief Officer of Institutional Planning. She has also worked with senior management at the Bill & Melinda Gates Foundation on the creation of their evaluation department. Ms. Snow has served on advisory committees for several prestigious philanthropic organizations including the Center for Effective Philanthropy, the John S. and James L. Knight Foundation, the White Oak Cultural Policy Conference, the Center for Arts and Cultural Policy Studies, the Arts Organization Stabilization Initiative, and the W.K. Kellogg Foundation. She holds a B.A. from Sarah Lawrence College and an M.A. from the University of Pennsylvania.

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