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Advice for Funders

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Funder asks for too much information for too little money.

From Vu Le of “Crappy Fundraising Practices”

Athletes For Animals awards grants averaging $1,000 (not a typo). Applications require: a specialized cover sheet; a narrative with evaluation methods; a budget on their form; board and key staff descriptions; and organizational financials plus the IRS letter. (And if you’re awarded funds there’s a required final report.)

This will take a few hundred dollars in staff time, operating expenses, and overhead yet Athletes for Animals pays for none of that.

One Comment from a reader on the LinkedIn post: “When non-profit leaders better understand their cost structure and cost recovery model, they will stop wasting time on things like this.”

Equitable Grantmaking Assessment Guide

To further educate foundations, Vu Le also teamed up with RVC, an organization he founded in Seattle to promote social justice, to create “Making Philanthropy More Equitable: Introducing the Equitable Grantmaking Continuum.”

It outlines funding practices ranging from the most equitable to the most inequitable. The tool can be used by funders to assess their funding and grantmaking processes, and to clearly identify steps they can take to improve them.

Tips on Reaching Corporate Funders

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1. Build Corporate Partnerships.

From Mario Hernandez

  1. Shift your posture from needing help to offering opportunity. Change “We’re looking for sponsors” to “We’re building a movement around [cause], do you want to co-author the story?”
  2. Ditch the gold-silver-bronze garbage. Create partnership experiences that feel custom-built. Fund an innovation lab, co-host a thought leadership series, or launch a branded scholarship program.
  3. Play offense on LinkedIn. Don’t expect them to find you. Go to them, name them, thank them.
  4. Build a Corporate Advisory Council. Once they feel bought-in, the dollars will follow.
  5. Make it ridiculously easy to say yes. Your ask should be crystal clear: “We have a $25,000 project funding gap. Here’s what you’ll get in return. Here’s how your brand will be celebrated.”
  6. Follow up like a human, not a robot. Send them micro-wins like “Just wanted to share, we hit 100 youth served this month!” or “This story made me think of your team’s values.”

2. Pitch a Mutual Benefit for Corporate Funding.

From Kevin L. Brown.

Corporations give $21 billion annually, most want a mutually beneficial partnership. Propose a two-way street across four dimensions:

Philanthropy:

  • You get: Thoughtful, strategic, aligned grants.
  • They get: A trusted home to invest their mandated giving.

People:

  • You get: Volunteers and expertise.
  • They get: A happier staff.

Platform

  • You get: New audiences.
  • They get: Strengthened brand positioning and powerful differentiation.

Product (In-kind Giving)

  • You get: Free resources and tools.
  • They get: To leverage their core business in the service of others.

Is the Grant Worth Going For? & What do Funders Want to Know?

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How do you decide what grants are worth your time?

From Lauren A. Burke

A matrix, essentially a scorecard, to help you rate how well your organization matches a grant criteria. It includes:

  • Issue Area
  • Geographical Scope
  • Connections
  • Application Lift
  • Amount of Funding

Six steps to finding the true costs of programs.

From Bridgespan

A Nonprofit Cost Analysis Toolkit: walks through a one-week to one-month process for performing a true cost analysis, which includes looking at indirect, or overhead, costs (e.g. administration, marketing, operations), not just programs.

How to approach funders for collaborative grants.

From: Amanda Davis

  • Why funders value collaboration
  • What they expect in proposals
  • Practical steps your nonprofit can take to successfully secure collaborative grants

Have these ready when that grant opportunity appears.

From Matthew Johnston

  1. Financial systems documented and audit-ready
  2. Program outcomes clearly defined and measurable
  3. Partnership agreements formalized
  4. Impact data collected and analyzed.
  5. Starting this capacity building doesn’t require massive investment. Begin with fundamentals every application asks for: create a simple logic model connecting activities to outcomes, establish basic data tracking, document your financial processes, draft template partnership letters, and compile organizational documents into a grant-ready folder.

Track the right numbers for nonprofit success.

From Allison Gregory

Metrics that cut through the noise and stabilize fundraising:

  • Board Giving & Fundraising Participation
  • Donor Retention Rate, New Donor Conversion, & LYBUNT* Recapture Rate
  • Donor Engagement Score & Recurring Donor %
  • Donor Lifetime Value & Average Gift Size

*Last Year But Unfortunately Not This

Differentiate your ask.

From Emily Gaylor

  • Renewed Donors: Ask for a second gift, an upgrade, or a targeted contribution to a special program.
  • Event Donors: Keep the ask simple and concrete – something like $50–$100 for a program that connects directly to the event they attended.
  • Current Donors: Remind them of their last gift and ask them to increase it by 50% or enroll in your recurring giving program.
  • Lapsed Donors: Reintroduce them to your mission, acknowledge their past support, and make a specific, emotionally resonant ask that matches their last gift amount.
  • Non-Donors (prospects): Make a simple, tangible first ask ($50–$100) tied to a visible outcome.

A graphic “Wheel of fundraising success”.

From Sarah Squire

Every spoke of the wheel, from systems and stewardship to messaging, needs:

  • Clarity of purpose
  • A roadmap
  • Consistency
  • Measurement
  • Corporate Social Responsibility (CSR)

Question & Answers from Introducing Your Organization to Funders Workshop

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In May 2024, Access Philanthropy held a workshop on Introducing your Organization to Funders, presented by Access Philanthropy Senior Grant Writers Kirsten Gulbro and Ann Madsen. Topics included drafting a Letter of Introduction (LOI), other other outreach methods, helpful tips, things to avoid, and tools to help with the writing. We held a Q&A with the 80 attendees. Below are the answers Access Philanthropy provided after the event.
1. How do I access Form 990s?

Several online sources provide access to 990s – the best resource to learn about the financial and operational details of foundations, and to better understand their activities and funding priorities. A primary 990PF source is the IRS website. Additionally, GuideStar allows you to search for and view millions of Form 990s for nonprofit organizations and foundations. Other free, valuable tools with 990s and additional information are ProPublica’s Nonprofit Explorer, CauseIQ, The Foundation Center, and Charity Navigator. Some foundations publish their Form 990s directly on their websites, or a list of their grantees, as part of their transparency efforts. Subscription services include Foundation Directory and Instrumentl.

2. I have come across funders that explicitly state they don’t accept unsolicited LOIs. Any feedback on how to introduce our org to funders like that, especially when you don’t have an in with staff/board?

While approaching funders who do not accept unsolicited LOIs can be challenging, we recommend a few strategic ways to introduce your organization and build a relationship:

  • Research Thoroughly: Conduct in-depth research on the funder’s mission, funding priorities, and previously supported projects. Understanding their focus areas can help you tailor your approach.
  • Leverage Existing Networks: Use relationship mapping tools like RelSci, WealthEngine, or BoardEx to identify any indirect connections between your Board members, staff, or other stakeholders and the funder. Even distant connections can be leveraged for an introduction.
  • Engage Through Events and Conferences: Attend events, conferences, and webinars where the funder’s representatives might be present. Networking at these events can provide opportunities for face-to-face introductions and informal conversations about your organization.
  • Social Media and Online Presence: Follow the funder on social media platforms and engage with their content. Commenting thoughtfully on their posts and sharing relevant updates from your organization can increase visibility and demonstrate alignment with their mission.
  • Write a Thoughtful Introduction Email: If you have any point of contact, send a concise and well-crafted email introducing your organization. Highlight your mission, impact, and how it aligns with the funder’s priorities. Respectfully acknowledge their policy on unsolicited LOIs and express your interest in exploring potential synergies.
  • Collaborate with Funded Organizations: Identify organizations that have previously received funding from the target funder and explore opportunities for collaboration. Joint projects can increase your visibility and credibility with the funder.
  • Submit to Open Calls and RFPs: Keep an eye on any open calls for proposals or requests for proposals (RFPs) from the funder. Submitting a strong proposal in response to these opportunities can put your organization on their radar.
  • Demonstrate Impact: Ensure that your organization’s website and publications effectively showcase your impact, success stories, and testimonials. A strong online presence can pique a funder’s interest and encourage them to learn more about your work.
3. What is the definition of a Donor Advised Fund?

NOTE:  This is an excerpt from Access Philanthropy’s response to the DAF question.   A link to full response is below.

Donor Advised Funds (DAF) are pools of money ($10,000 or more) created and financially sustained by individuals, families, businesses, or organizations (the Donors). These DAFs are managed and technically owned by non-profit organizations such as community foundations, colleges, and investment companies (such as Fidelity, Vanguard or Charles Schwab). Note that, while Fidelity is a for-profit corporation, the company maintains a separate non-profit mega-fund (Sponsor) that manages thousands of DAFs.

Legally, the DAF is owned by the Sponsor as soon as the Donor opens their DAF and “contributes” its money to the Sponsor. Technically, ONLY the Sponsor can invest that money and, legally, only Sponsors are allowed to award grant funds to DAF recipients. However, if the Donor “suggests” the Sponsor award a grant to the Red Cross, the Sponsor obliges the donor about 99.999% of the time.

But there are two significant problems with DAFs [more …]

4. Do you recommend cold phone calling, or phoning after sending LOI?

Calling is the fastest and most direct way to connect with a funder, so we recommend calling before and after submitting an LOI (if time allows). It also gives you a chance to share more about your organization, answer their questions, ask your own questions, and talk through potential next steps.

5. Script suggestion when making a follow-up call?

A follow up call should be brief to be respectful of the donor’s time and include a concise update on your project and express your willingness to provide additional information. It is also an opportunity to express gratitude for their time. A general template is:

  • Introduce yourself: Hello, [Donor’s Name]. This is [Your Full Name] from [Your Organization’s Name].
  • Establish Context: I hope I’m not catching you at a bad time. I’m calling to follow up on the LOI we submitted on [submission date] for our project [brief project title or description]. Do you have a few minutes to discuss it?
  • Summarize the Project: “We are very excited about this initiative, which aims to [short summary of goals and impact]. We believe it aligns well with [Donor Organization’s Name]’s mission to [mention donor’s mission or focus area].”
  • Request an Update: “I wanted to check in on the status of our submission and see if there have been any updates or if there are any additional details we can provide to assist in your review.”
  • Offer Additional Information: “We’re happy to answer any questions or provide further information that might be helpful. Is there anything specific you would like to know more about?”
  • Express Gratitude and Interest: “Thank you so much for taking the time to speak with me today and for considering our application. We truly appreciate your support and are hopeful about the possibility of working together.”
6. In your recent experience, if a funder says they are not interested in unsolicited reach outs, is it ultimately worth it to use resources to pursue them?

If a funder has told you they don’t accept unsolicited outreach, that shouldn’t discourage you from starting to build a relationship. Many funders don’t accept unsolicited proposals, and yet, they accept a handful of new grantees each year. We recommend following up quarterly with these funders to share news articles (preferably featuring your organization, but also articles that highlight trends/news in their mission area), invitations to your organization’s events (e.g., program graduations), links to videos, or celebratory emails when the foundation has been recognized for something positive in the community. As you get to know the funder better, you can have a larger conversation about funding potential. Having said that, if they ask you not to contact them, it’s best to move on and save your hard work for the next one!

7. Last year a Board member from a foundation sent us a large donation personally. The foundation wants a LOI. Would I mention that this Board member gave a personal donation?

Because it was a personal donation, it is likely not necessary to include this in the LOI. Given your Board member’s connection to the foundation, however, you may want to reference their support of your organization more generally (without sharing details about the gift). You can also follow-up with the Board member to see how they recommend proceeding.

8. We are starting a funding campaign and are starting with people that know us and have been previous donors.  I’m wondering if emails are still better than letters?  I worry about emails getting lost in the pile of emails people get daily.

In this case, you can get away with doing both. You could send your donors a letter, and then follow up 1-2 weeks later with an email (making the email as personal as you can to avoid junk and spam folders). By doing a mailer and an email, your message is less likely to get lost.

9. In a LOI, do you attach it as a document or put it in the email?

Document into the body of the email. This ensures that the formatting and structure of the LOI are maintained, making it easier for the donor to read it. In the body of the email, provide a brief summary of the LOI, highlighting the key points, such as the mission of your organization and what you are requesting funding for.

10. What messaging and resources are helpful to Board members, staff and volunteers to help identify relationships they might encounter authentically in their work and community circles? (Clarifying to say relationships with funders)

Having a conversation at the board level about the importance of fundraising is a good place to start. It reinforces the idea that your organization needs resources and fundraising is a shared responsibility. Following up with 1:1 conversations with Board members helps you identify their individual barriers, questions, and next steps. Some Board members may find fundraising overwhelming and scary, while others simply don’t know where to start. Individual check-in meetings also give you a chance to brainstorm alongside your Board member (e.g., “Do you know anyone at XYZ company/foundation that we can set a meeting with?”).

1:1 meetings could also be a helpful practice with your volunteers, and particularly those you know or suspect are well-connected. On a broader scale, adding a fundraising plug to your volunteer materials and asking volunteers to forward/share those materials may jog their brains.

11. Can you address the differences between seeking operational funding versus a capital project?  We are looking to rehab a building to be used as a digital media training center and entrepreneurial coworking facility

Your best source of capital gifts are your current funders, as they know you, love you, and want to see you grow. Capital gifts tend to be larger investments and in many cases, outside of a foundation’s typical application cycle.  If your organization is soliciting capital gifts, we recommend contacting a program officer or foundation staff to have a conversation about capital gifts. In many cases, foundations will make capital gifts IN ADDITION TO your current operating/program support.

Because operational funding is more common, you can usually apply under the foundation’s existing application cycle(s). If the foundation is new to your organization, it’s helpful to give them a call, send an introductory email (with your LOI attached), or mail an LOI.

12. Currently, in general, if a funder says they are not interested in unsolicited reach outs—does this tend to be true?

This is likely true, but that shouldn’t discourage you from starting to build a relationship. Many funders don’t accept unsolicited proposals, and yet, they accept a handful of new grantees each year. We recommend following up quarterly with these funders to share news articles (preferably featuring your organization, but also articles that highlight trends/news in their mission area), invitations to your organization’s events (e.g., program graduations), links to videos, or celebratory emails when the foundation has been recognized for something positive in the community. As you get to know the funder better, you can have a larger conversation about funding potential. Having said that, if they ask you not to contact them, it’s best to move on and save your hard work for the next one!

Have your own questions?

Schedule a 30-minute chat with an advisor

What is the definition of a Donor Advised Fund?

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In our workshop on Introducing your Organization to Funders (May, 2024), we held a lengthy Q & A session and a few people asked about Donor Advised Funds. Below is the answer we provided, following the event. Link to the full Q & A >>

Donor Advised Funds (DAF) are pools of money ($10,000 or more) created and financially sustained by individuals, families, businesses, or organizations (the Donors). These DAFs are managed and technically owned by non-profit organizations such as community foundations, colleges, and investment companies (such as Fidelity, Vanguard or Charles Schwab). Note that, while Fidelity is a for-profit corporation, the company maintains a separate non-profit mega-fund (Sponsor) that manages thousands of DAFs.

Legally, the DAF is owned by the Sponsor as soon as the Donor opens their DAF and “contributes” its money to the Sponsor. Technically, ONLY the Sponsor can invest that money and, legally, only Sponsors are allowed to award grant funds to DAF recipients. However, if the Donor “suggests” the Sponsor award a grant to the Red Cross, the Sponsor obliges the donor about 99.999% of the time.

Why does the Sponsor listen to the Donor so often? Because the Donor pays a management fee (between 5% and 10%) to the Sponsor. For Sponsor organizations like the Saint Paul-Minnesota Foundation and the Minneapolis Foundation, DAFs are their primary source of income as well as the source of more than half of the Foundations’ grants. Unless the Donor is giving to an illegal organization, the Sponsor will always oblige the Donor.

To be fair, community foundations are providing huge services to the Donor, to grant recipients, and to the community. It’s very clear DAFs are the only way more than half their Donors give away money. Some organizations in Minnesota receive more funds through DAFS than through other private foundations. Granted you have to be big and famous for that to happen, but if it weren’t for DAFs, the Walker and the Guthrie would be in serious trouble.

  • Related, Sponsors like Fidelity and Charles Schwab are among the largest charitable giving operations in the United States. They charge a low management fee (5% or so) and they automatically award billions of charitable gifts/grants all over the world.

But there are two significant problems with DAFs.

  • Some Donors “warehouse” their charitable funding. They “contribute “ funds to the Sponsor and receive a tax deduction for their contributions. But then they let the money sit in the DAF and never direct the Sponsor to contribute funding to charitable organizations. Their “contributions “ just sit in the DAFs for years or until the Donor dies. No one in the community benefits from this supposed contribution except the Sponsor.
  • The second issue is more argumentative. Donors and Sponsors are not required to publicly divulge any information about the DAF, the Donor, the size of the DAF, or the charitable intent of the Donor. Only the Donor and the Sponsor know, and neither of them are talking. At least not to organizations not on the Donor’s grant list. So more than half of the funding from community foundations is actually anonymous and awarded behind a wall of secrecy.
    • For some donors, this anonymity is THE primary reason they use a DAF rather than a regular private foundation (in which the IRS requires annually published public information). That’s understandable. If my family is afraid of being inundated by grant seekers, anonymity allows me to give money without worrying about lots and lots of grant requests.
    • => Related, while the minimum DAF investment is usually around $10,000, that really means many DAFs are only awarding 10-15 $1,000 grants per year. Is it worth the Donor’s time and energy to chat with 100s of grant seekers to give away $10,000? Probably not, so the DAF system is time efficient for many Donors.
    • On the other hand, so many great organizations have no platform to make their case to the Donor and they can’t rely on the Sponsor to support their case to the Donor when the Sponsor is so beholden to the Donor. So, it’s easy to see why less well-known charities are frustrated by the lack of access and it’s understandable why community members are disappointed that only the most famous organizations have access to these funds.
    • Community foundations are legitimately protective of their Donors and relationships which raise so much of their annual income. But because of the negative community pushback and because of lots of recently proposed legislation and recently drafted IRS regulations about DAFs, some community foundations are becoming more accessible to grant seekers looking for DAF money.
    • Some offer “applications” (generally 2-3 pages of info) that they can share with prospective donors. The Tides Foundation in San Francisco allows everyone to fill out a simple application that becomes part of a “catalog” that’s sent to all their Donors.
    • Some community foundations allow the staff people who manage the DAFs and the Donor relationships to chat with high prospect grantees. One of our environmental clients met with one of Minneapolis Foundation’s DAF staff people and eventually received a $50,000 grant from a DAF.

Procedures shift from community foundation to community foundation and from grantseeker to grantseeker. If your group is not well known, it may not be “worth” the Sponsor’s time. Nevertheless, we recommend that grant seekers visit with community foundation program officers to determine their policies on DAFs.

Remember, virtually every community foundation, large and small, sponsors DAFs. From the 1500+ DAFs at Minneapolis Foundation to the 3-5 DAFs at places like the Women’s Foundation of Minnesota, the Headwaters Foundation for Justice, and the Catholic Community Foundation of the St Paul Minneapolis Archdiocese. And if you learn Margaret Cargill Philanthropies has a DAF at the Saint Paul Minnesota Foundation, please understand that their DAF is not really intended to make grants but to be an investment gift to the Sponsor.

If you see a gift from the Chicago Community Trust to a little theater company in Minneapolis, it’s a Chicago Community Trust Donor using their Chicago Trust DAF to support the little theater company. In Minnesota, more than 200 non-resident community foundations award grants to Minnesota groups through their DAFs. We’ve linked to a Donor Application from the Minneapolis Foundation that will give you a deeper understanding about the relationship between the Donor and the Sponsor.

10 Words and Phrases You Should Never Use

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An advice piece in the Chronicle of Philanthropy goes after “Philanthro-speak” which often means one thing to a foundation program officer and another to people outside that bubble.

Here are a few terms — suggested by the CP staff as well as nonprofit leaders and communications experts — that may alienate or confuse rather than inspire:

Asset mapping
This is a popular term in community-development work. “Asset mapping,” explains the Local Initiatives Support Corporation on its website, “is a capacity-focused way of reimagining the place-making practice around the strengths and gifts that already exist in our communities.” More simply, the phrase describes the process of cataloging a community’s strengths and resources. A derivation perhaps more confusing: “asset-based framing.”

Best practice
The phrase was first found in Scientific American in the 1920s, according to the Oxford English Dictionary, and burrowed into the business and management consultant fields in the 1980s. It since has migrated to medicine, government, education, and the philanthropy and nonprofit worlds. The problem, experts say: Something is best practice only until research finds something else is indeed better. The phrase also encourages standardization — a one-size-fits-all approach that fights against the philanthropy trend captured by another buzzword: “participatory grant making,” in which communities or individuals closest to a problem are the ones that decide what’s best.

Bridge building
Words from the design or construction fields — including “scaffolding” and “infrastructure” — suggest that philanthropists are expert planners. “Bridge building implies an architecture designed to bring things together that weren’t intended to be together in the first place,” Dean-Coffey says.

Concretize
An authority no less than the Allied Grant Writers advises grant seekers to “concretize your overall idea of a project.” Dictionaries confirm it’s a word — the OED says it dates to the 1800s — but a more user-friendly piece of advice might be: “Offer details to illustrate your project.”

Ecosystem
National Geographic Society, the venerable nature and science nonprofit, calls an ecosystem a “geographic area where plants, animals, and other organisms, as well as weather and landscapes, work together.” Nonprofits often use the term to describe the set of relationships between groups in a network of organizations. The result can be quite confusing. When Deloitte Consulting’s Monitor Group identified 45 roles for community philanthropy organizations, it included those “proactively planning for the long term,” some “building collaboratives,” and others “managing formal collaborations.”

Impact
It’s probably one of the most seemingly benign yet most overused words in philanthropy. Every program officer wants their grants to result in change. But “impact” is something that happens to something; it suggests, for instance, that a community working with a foundation has no role in its betterment, says Jara Dean-Coffey, director of the Equitable Evaluation Initiative, an effort to redefine how foundations determine grant results.

Meteors make impact. Teeth get impacted. The word is “violent, nonconsensual, and not fair,” she says.

Leverage
Tony Proscio, a retired consultant to large foundations, says that too often,  philanthropy leaders use fancy words from other fields that shroud what they really mean. “Leverage,” which is borrowed from the financial world, is “the one I despise the most.”

Socialize
Foundations sometimes say they need to “socialize” a big idea — shorthand for testing whether the people they want to help will embrace the concept. Merriam-Webster’s third definition — “to organize group participation in” — might be appropriate, but the word can strongly suggest training others in established values and habits — in other words, bending others to norms.

Systems change
This phrase typically describes efforts to “tackle the root causes” of a societal issue, not the symptoms. But it’s so dense with connotations that Rockefeller Philanthropy Advisors even wrote a “topic brief” to explain the term (complete with an infographic). Ambitious grant makers reach for “systems transformation.” And when change efforts grow complicated, they require an “orchestration mechanism” to coordinate parties involved.

Theory of change
The authors of a 2004 study commissioned by the Annie E. Casey Foundation suggested that without a theory of change — that is, a plan for how to solve a problem — nonprofits and the people they serve are vulnerable to “wandering aimlessly.”

Enter a foundation, which will present a plan, packaged as a theory of change. Barriers to change will be identified, partners in the work engaged, money will be well spent, and the problem will be managed. But the term suggests a single answer to a problem and a prescriptive approach.

FREE information on grant makers

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Cause IQ’s is a subscription-based database built for consultants, accountants, and IT firms to find and market to nonprofits. A Cause IQ profile shows Program areas, Funding, Grantmaking, Financials, and Personnel. With the free account, it’s mostly 990 data but MUCH easier to read than the tax form.

Here’s some of what’s in a search with a free account:

First, create a free account. When logged in, you get a Dashboard with a search box.

  • Type in the name of a funder, or, keywords, like “Minnesota Foundations” – that gives you a list of 2,880 organizations, each with a profile.
  • Under “Advanced Search” you see how many are Private foundations, Corporate foundations, etc.
  • Filter on any of these Types, and/or Revenue, and/or City
  • You can save the Search, to return to over time.

The Grantmaking tab offers graphs comparing issues that received funding, the number grants made in what states, the NTEEs, and more. Graphs likes these are behind paywalls on other search sites.

Another pleasant discovery, the Dashboard remembers recent searches, viewed profiles, and lists updates on them.

 

Give it try: https://www.causeiq.com/