Those reasons are:
Stable Giving – Foundations must make charitable grants – in
good times and bad – of at least 5% of their assets, averaged over five years.
Importantly, foundations frequently increase their donations in challenging
times to compensate for the financial difficulties charities face. 2020 has
been no exception. According to our friends at Foundation Search – over 7,500
US foundations have explicitly launched COVID-19 relief initiatives. They
believe this number will increase significantly in 2021.
Predictable giving – Foundations exist to donate to charity,
unlike individuals and corporations, who have a variety of shifting interests
and priorities that are dependent on a robust economy. Foundations often publish giving guidelines
relating to geographic and philanthropic areas of giving interest – furthermore,
analysis of giving through time indicates that most foundations maintain a strong, consistent focus in the areas they support.
Low risk / low cost – unlike high expenditure / high risk
fundraising efforts like golf tournaments and galas, foundation fundraising
requires very little upfront investment, typically $5,000-$15,000, and with the average single foundation grant amount of $59,300 (2019, 2020), it provides the
most cost-efficient method of fundraising – all that is required to start is a
funding database which identifies good funding prospects, a good letter, and a
few stamps and envelopes.
Low effort – relative to almost any other form of
fundraising, approaching foundations requires fewer resources to succeed. This
is particularly true of the upfront work in sorting through the over 135,000 U.S. foundations to identify a list of “best prospects” for your project, a task
that a few years ago could consume months of effort. Foundation funding
information and management systems are now able to intelligently and
accurately identify a shortlist of the best prospects for a variety of project
funding needs, including COVID-19 funding – and recommend a safe asking amount
based on the funders prior giving history.
The balance of the upfront effort simply involves writing and sending a
letter of inquiry to your foundation prospects to determine their interest in
helping you.
Growth – the most recent CCS Fundraising survey (August,
2020) indicates that foundation funding
was the fastest-growing giving source since 2015-19, growing at a rate of 5.7%,
compared to 3.2% for giving by individual donors. Foundations gave $72 billion, in the form of an estimated
1,164,000 grants – that is more than one grant for every two charities in the US so your odds of getting funded – if you apply of course – are good.
Increased credibility for you and your organization – well, once you get funded by a foundation that is. When you are successful in attracting a foundation grant you will open up many doors in the foundation and corporate world for your organization for years to come – you have proven that you are worth funding and can deliver.
Diversification of funding sources – financial advisors will
strongly advise you not to put your life savings into a single stock or sector;
for the same reason, having a variety of funding sources—including foundation
funding—will strengthen your organization and protect it from the sharp
downturns every economy periodically experiences.
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