(Bradford K. Smith is the president of the Foundation Center. In his previous post, he wrote about transparency and the Giving Pledge.)
Okay. You're working at a great nonprofit, you've got a wonderful idea that's going to change the world, and all you need is a grant to get you started. Guess what? The majority of America's foundations don't want you to send in a proposal.
Of the more than 86,000 independent, community, and corporate foundations in the United States, 60 percent state that they do not accept unsolicited proposals. Together they represent 32 percent of total assets and 34 percent of annual giving. Nearly $16 billion of the $46 billion distributed every year is not up for grabs; you need an invitation.
Foundations in America are private institutions and have the right to decide how, when, and on what terms they will accept proposals and make their grants. At the Foundation Center, we respect that right and clearly indicate in our databases when a particular foundation does not want to receive unsolicited proposals. But people seeking foundation grants find this more than a bit frustrating. One of their most common questions is, "Why won't foundation X let me send in my proposal?"
There are at least two reasons. The first is foundation size. Dealing responsibly with requests for funding requires significant effort, time, and people. Yet in one Foundation Center survey of 11,000 foundations, 76 percent of respondents had fewer than four staff. Foundations are frequently inundated with proposals. My own experience working in philanthropy has taught me that for every grant approved by a foundation, eleven more are declined. The ratio can be much worse. One year at the Ford Foundation -- which accepts unsolicited proposals and has hundreds of staff -- we decided to count every letter of inquiry, e-mail, and actual proposal and came up with something on the order of 144,000. The number of grants actually made that year? Fewer than three thousand. The situation could be helped if foundations were clearer about their grantmaking priorities and nonprofits were more careful in targeting their proposals, but the reality is one of greater demand than supply. From a foundation's perspective, not accepting proposals can be like building a dyke to hold back the flood.
The second reason has to do with the growing emphasis in philanthropy on strategy and social impact. Foundations may command billions of dollars, but the challenges they aspire to address -- educational quality, access to health care, workforce and economic development, climate change, and more -- require far greater resources. Moreover, in recent years a new wave of business-oriented, often younger philanthropists have entered the field and brought with them notions of social investment, metrics, and assessment. All this adds up to a trend among some foundations to design their own theories of change and strategies and then either implement programs themselves or select the organizations from which they are willing to entertain proposals. The actual design of these strategies frequently is done in collaboration with nonprofits and universities, so if you happen to be part of the process, you'll most likely get a grant. If not, well, you're just not part of the in-crowd.
In 2009, with the economy in the tank, I was doing a live chat with the Chronicle of Philanthropy and someone asked whether they should still try when a foundation said it didn't accept unsolicited proposals. My answer was not "no," but rather that they should pay attention to what the foundation is saying and try to find someone who knows a board member, a staff person, or any other connection that would help get them in the door. In our grantseeking classes here at the center, we always teach that a grant begins with a relationship. That's true whether a foundation accepts unsolicited proposals or not.
Lately, I've seen some slightly less foreboding language crop up on a number of foundation Web sites: "The foundation does not encourage unsolicited proposals." Maybe that's the solution for smaller foundations not wanting to be overwhelmed and larger, highly strategic foundations striving to maximize their impact. Foundations receive a tax exemption on their investment income in exchange for contributing to the public good. One way to do that is to maintain at least a single program area, however small, that invites the public, in the form of nonprofits, to freely apply for grants. Besides, no matter how knowledgeable a donor, staff, and consultants might be, the next big idea out there may be the one that literally comes in over the transom.
What do you think?
-- Brad Smith