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40 posts categorized "Grantseeking"

3 Things to Know About Donor Behavior

September 02, 2015

Donor_brainWhen I first got into fundraising, I executed campaigns without worrying too much about donors or spending a lot of time thinking about why or how they responded to particular strategies or appeals.

Eventually, I realized that if development professionals really want to make a difference in their organization's ability to raise money, they not only need to think about their donors, they need to understand how the donor brain works. Let's face it: the brain is an economic weighing machine that makes hundreds, if not thousands, of opportunity-cost calculations a day. Rather than choosing the most difficult thing, it tends to nudge us down the path of least resistance.

What does that mean for the fundraising professional? It's simple. Donors are drawn to actions that, psychologically speaking, are low cost but yield a satisfying result. We need to build that recognition into our appeals and the way we communicate about our organizations.

The 'Me-Too' Effect

Imagine walking into a museum and at the entrance coming across three buckets. Bucket #1 has a sign asking you to donate the change in your pocket. You notice the bucket is almost full of coins. Bucket #2 has a sign asking you to donate $5 and is maybe half full of one- and five-dollar bills. The last bucket, bucket #3, has a sign asking you to donate $50 and has a few bills crumpled at the bottom.

Which approach is likely to raise the most money?

According to research, a bucket filled with loose change will actually generate more money than a bucket only partially full of larger-denomination bills. Why? Because donors want to feel they are part of something bigger than themselves. A bucket full of change suggests that lots of other people support the cause and momentum is building. Most people will see that and want to be part of it. Besides, it's easier to fish the loose change out of your pocket than it is to pull out a wallet and find the right number of bills in the right denominations.

It Feels Good to Give

You may have asked yourself, does altruism really exist? Altruism — the principle or practice of unselfish concern for or devotion to the welfare of others — is what we hope to appeal to in our donors. But we all know there is an element of selfishness and ego in most charitable giving. It's what some call the “warm glow effect.” When you ask someone why he or she signed a petition or responded to an appeal with a donation, they invariably open with an “I” statement: “I wanted to show my support for the organization/cause,” or “I did it because it's important to me.” Our brain, meanwhile, is telling us that it feels good to help others.

When you ask someone to give, it's important to help them understand why their donation mattersand how it relates to their life. The two work together to increase the empathy a donor feels for the intended beneficiaries of his or her donation and ultimately leads to the donor having a keener interest in helping others.

Peer Influence

Let's return to the bucket scenario. An individual is much more likely to throw some change or a bill or two into a bucket if at least a few of the people he is with are willing to do the same. He's also more likely to put money in the same bucket that his friends have put money in. Why? Because humans are social animals. In fact, research shows that people tend to feel safer and more secure when they are holding hands with a friend or family member. When we see a person or people we care about donating money to a cause, our warm feelings toward that person (or persons) are transferred to the cause, while any skeptical feelings we may have are likely to be put aside.

How can you apply this observation to your own fundraising appeals? It goes without saying that peer influence is one of the most important tools in a fundraiser's arsenal. You can ask a donor for a contribution from your first day on the job until your last and hope that this time she'll respond — or, if she's given in the past, won't change her mind. But if you can empower her peers to give money to your organization (through a series of well-executed peer fundraising tactics), you'll be leveraging your efforts with their efforts and greatly increasing your chances in the long run of adding to your donor base and raising more funds.

Remember, the key to successful fundraising is to take donors on a journey from initial contact to ever-deeper levels of engagement. Keeping these aspects of donor behavior in mind as you create a roadmap for your next fundraising campaign will ensure you reach your destination sooner — and with fewer wrong turns. Your goal, always, is to nudge donors past what they think they can do to successively higher levels of interest and action.

Headshot_derrick_feldmann_newDerrick Feldmann is the president of Achieve, a research and creative agency that works with nonprofits to increase their impact. He also leads the national research team for the Millennial Impact Project, the premier study dedicated to millennials and how they engage with cause work, and is co-author of Cause for Change: The Why and How of Nonprofit Millennial Engagement.

Most Popular PhilanTopic Posts (August 2015)

September 01, 2015

With the markets sliding and the heat and humidity rising, it seems like a good time to take a step back and revisit some of the great content published here on PhilanTopic in August. Learning to embrace change and failure, tips for your next group interview, and the return of venture philanthropy and old-fashioned liberal education -- it was a month to remember, if not one to take to the bank....

What have you read, watched, or listened to lately that made you think? Feel free to it share with others in the comments section below, or drop us a line at mfn@foundationcenter.org.

Warning to All Grantseekers: When Markets Tank, HOLD That Request!

August 24, 2015

Markets_downYou can't time markets but you can time grant requests. So when newspapers scream: "Massive sell-off on Wall Street as investors fear China slowdown" (New York Post), you should think twice before asking a foundation for money.

In good times, foundations can drive grantseeking nonprofits crazy with their demands for effectiveness and metrics to support those claims. At regional and national gatherings, foundation professionals speak passionately about effectiveness in sessions with titles like "Unlocking Impact...", "What Works...", and "The Cost of Achieving Outcomes..." What's more, every year it seems more and more foundations turn to online application and reporting forms that require nonprofits to produce copious amounts of detailed information about their logic models, theories of change, inputs, outputs, and outcomes.

But when stock markets head south, especially in the dramatic way they have over the past few days, there are only three indicators that matter: the S&P 500, the Dow Jones Industrial Average, and the NASDAQ Composite. If you are ever fortunate enough to make it into a foundation president's office, apart from the usual large desk you will be greeted by a television or monitor tuned to CNBC with its endless chatter about share prices and market moves. Remember, the vast majority of the 87,000 foundations in the U.S. are endowed, meaning the income that underwrites their grant budgets comes exclusively from the performance of their investments. Foundation presidents and the trustees to whom they report know that the ability to advance a foundation's mission depends on that performance, and they also know that they are being watched by state and federal regulators tasked with ensuring they are responsible fiduciaries and "prudent investors" of foundation assets.

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Being Counted: Funding for People With Disabilities

July 16, 2015

"It's a sad truth that in many developing countries people with disabilities simply don't count. No data is collected on their disabilities nor their abilities, so it’s as if they just don’t exist…."

— Former UK parliamentary undersecretary for the Department for International Development (DFID) (quoted in the Guardian)

Disability_symbolsRecognizing that, to date, development goals have not been reached because people at the margins have not been included, the concept of "leave no one behind" has been a key part of the post-2015 development process. Among those left behind have been people with disabilities who, until the publication of the first World Bank/World Health Organization World Report on Disability in 2011, were not specifically enumerated among the world's population.

As it turns out, people with disabilities make up an estimated one billion people around the world. That is 15 percent of the world's population, or one in every seven people. Further, children with disabilities are the single largest group excluded from school, making up 30 percent to 40 percent of the out-of-school population according to UNESCO. Women with disabilities are 40 percent more likely to be victims of domestic violence than other women, and 20 percent of the poorest people in the world are people with disabilities.

Despite these dire statistics, most countries in the developing world either do not count their populations with disabilities or do not use standardized methods to do so, meaning that official data on persons with disabilities and the conditions they live in is poor or absent.

Until recently, this was also the case among human rights funders and human rights organizations. Disability — considered a charity or medical issue — was not delineated as a human rights concern. Indeed, it was only in 2010, following the implementation in 2008 of the UN Convention on the Rights of Persons with Disabilities, that even as formidable an advocate as Human Rights Watch started systematically reporting on rights abuses against persons with disabilities.

Thus, when the International Human Rights Funders Group (IHRFG) and Foundation Center initiated a project in 2010 to map global human rights grantmaking, I was excited that the project would include people with disabilities among the recipient populations to be tracked. For the first time, people with disabilities would be listed as a population of concern for funders making human rights grants.

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Tips for End-of-Year Foundation Fundraising

November 18, 2014

End_of_year_fundraisingThis is the time of year when every nonprofit CEO sinks or swims. Either you secure the last of the grants needed to balance your organization's budget or risk running a deficit and ruining its balance sheet. But while you might think it's too late to save 2014, the last six weeks of the year are actually an excellent time to pursue foundation grants. Here are a few tips to help you do so:

Foundations are like people. At the end of the day, whether it's a small family foundation or a large independent foundation,
it takes people to make a grant, and, when it comes to deadlines, most people procrastinate. In other words, an awful lot of grants get made in the last quarter of the year, and a surprising number of those grants are made in December.

Meeting the payout requirement is trickier than you think. Foundations are required by law to spend 5 percent of their assets annually for charitable purposes. This can include a portion of their own operating costs, but most of it tends to be paid out in grants. Many foundations base this 5 percent minimum on a rolling three-year average of the value of their investments. With the fairly constant oscillations of the stock market, you can imagine this is something of a moving target for most foundations. Add to that the fact that grants sometimes don't materialize, organizations implode, and stuff happens, and foundations often have to scramble to make last-minute grants to achieve their mandated 5 percent payout.

The stock market is on a tear. Though 2014 has been a bit bumpy, the markets are up and have been very good to foundations over the past three years. This means that foundations will be calculating their 5 percent payout on an asset base that is larger than at any time since before the Great Recession. It's the reason why U.S. foundations will pay out nearly $60 billion in grants in 2014.

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A Message From GuideStar President/CEO Jacob Harold

October 27, 2014

Headshot_Jacob_HaroldIn 2013, I joined with partners at the BBB Wise Giving Alliance and Charity Navigator in writing an open letter to the donors of America explaining that "overhead ratios" are a poor way to understand nonprofit performance. We named this campaign "The Overhead Myth."

I'm glad to report that the response to the campaign, including the original Overhead Myth letter to the donors of America, far exceeded our expectations. More than one hundred articles have been written about the campaign. It comes up every time I hold a meeting or give a talk. For many in the field, it's been a deep affirmation of something they've long known. And, indeed, many leading organizations — the Donors Forum, Bridgespan, the National Council on Nonprofits, and others — have been working on the issue for years. 

But we also know we have a long road ahead of us. The myth of overhead as inherently "wasteful" spending is deeply ingrained in the culture and systems of the nonprofit sector, and it will take years of concerted effort for us to move past such a narrow view of nonprofit performance to something that fully reflects the complexity of the world around us. That effort is essential, however, if we want to ensure that we have a nonprofit sector capable of tackling the great challenges of our time. 

That's why last week the CEOs of Charity Navigator and the BBB Wise Giving Alliance and I released a second Overhead Myth letter — this one addressed to the nonprofits of America. In that letter, we suggest a set of steps nonprofits themselves can take to help dispel the Overhead Myth. We all share responsibility for allowing things to have reached this pass. And it will take all of us to fix it.

We direct this letter to nonprofits not because we feel they are the originators of the Overhead Myth but because they are in the best position to communicate with their donors and funders. We want to recruit nonprofits to help us retrain donors and funders to pay attention to what really matters: results. In the end, that means nonprofits have to throw away the pie charts showing overhead versus program — and  step up to the much more important challenge of communicating how they track progress against their mission.

In simple terms, we must — collectively — offer donors an alternative. In the letter, and on the accompanying website, we call on nonprofits to do three things as their part of this evolution:

  1. Demonstrate ethical practice and share data about their performance.
  2. Manage toward results and understand their true costs.
  3. Help educate funders (individuals, foundations, corporations, and government) on the real cost of results.

We have provided a list of tools and resources related to each of these  goals. These tools give nonprofits tangible steps they can take to engage their stakeholders around this critical issue. As the sector develops new resources and tactics, we will add them to the website.

We believe it will take a shared effort to focus donors' attention on what really matters: nonprofits’ efforts to make the world a better place. It doesn't matter whether you work at a nonprofit or donate a few dollars to a favorite charity every year, please join us as we seek to move from the Overhead Myth to the Overhead Solution.

For more information, or if you have a resource related to this issue that can help advance the cause, email overhead@guidestar.org.

GuideStar, a 501(c)(3) nonprofit that connects people and organizations with information on the programs, finances, and impact of more than 1.8 million IRS-recognized nonprofits, serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media.

Grantees Sound Off About Philanthropic Funding System

August 15, 2014

MarcMaxson_GG_sweaterI believe that philanthropic foundations could make major progress in serving their constituents if they paid more attention to what grantees were saying about them. Not in the cozy pat-each-other-on-the-back love-fest way. I mean by listening to real, honest feedback.

Recently, we at Feedback Labs (as a neutral third party) decided to ask a group of twelve hundred organizations to publicly share stories about their experiences with funders, adopting our community storytelling approach to the task. That approach emphasizes open-ended narratives with a few follow-up questions, intermediation (people are a little more likely to say something negative if the boss isn't in the room), and confidentiality.

Sample Feedback

I selected these particular comments because the variety of issues addressed in them illustrates the importance of asking open-ended questions. In this case, the question was: "Talk about your experience approaching a grantmaking or funding organization that either did or did not grant you funding. What was the relationship like? Did you receive support from them?" (Feel free to add your own story to the collection here.) What follows are some representative highlights from the stories told by grantees about funders and the grantseeking process:

Comments from GlobalGiving partner organizations:

  • The process leaves little room to establish a relationship with a grantmaker because we're usually just asked to fill in a standard form and maybe attach a project summary and financial documents.
  • It was important for us to understand who the decision makers are. What are their priorities? And what aspects of the project are particularly appealing to the funder, given its vision and mission?
  • It was an unsolicited proposal, and we really didn't attempt to build any relationship with the foundation by writing to them or calling them up to ask where our proposal the previous year had fallen short. That really affected our chances of winning a grant.
  • We got to meet the organization through a mutual friend who had been following our work for years.
  • I was nervous when I sent the first email requesting support for a program in Nairobi. However, the funder responded positively and even made a trip to Nairobi to see the program first hand.
  • We waited endlessly for a decision on our proposal. One of the basic problems in dealing with a large CSR unit is that you have to keep following up and have a person dedicated to making sure that happens.

And here are some comments from smaller, emerging organizations not yet partnered with GlobalGiving:

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A Framework to Communicate Philanthropy

April 25, 2014

(Jeannine Corey is director of grants information management at the Foundation Center. A version of this post also appears on the GuideStar blog.)

Heasdhot_jeannine_coreyLanguage allows us to communicate complex ideas and acquire information using an agreed-on structure and process. Variations in language around the globe increase the level of effort needed to communicate with people across borders, but it's not impossible if you have a way to translate your ideas into a language others can understand.

The Foundation Center is currently undertaking the challenge of devising a language that can be used by philanthropic organizations around the world to tell the story of their work. That common language is crucial for a field as diverse as ours: not too long ago, we determined that U.S. foundations have more than two hundred and fifty ways to describe "general operating support"!

In 2012, the Foundation Center began to rethink the classification system that has been at the core of our work, a system largely based on the National Taxonomy of Exempt Entities structure that we helped create thirty years ago. Given how much the sector has grown and evolved over the past few decades, updates to the taxonomy are critical in order for it to more accurately reflect the work of the field and serve as a relevant tool for a 21st-century global philanthropy community. Why is this important? Because a shared taxonomy makes it easier for grantseekers to find targeted support, helps funders collaborate with each other and identify potential grantees, and assists researchers and academics who are analyzing the work of the sector.

To that end, staff at the Foundation Center have spent eighteen months evaluating our codes, mining the text of the nearly five million grants and one million philanthropic institutions in our database, and cross-referencing that information against other international standards to inform the creation of a revised taxonomic system. Our goal is not to create another standard but to develop a framework that meets the needs of the sector and can serve as a language that organizations use to communicate their work to each other. For example, we've added new subject areas related to information and media, including associated technologies. We've replaced "type of support" with two new categories: support strategy, to reflect the goal or approach behind the actual support, and transaction type, to capture the various forms of philanthropy beyond the cash grant that happen around the world.

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Most Popular PhilanTopic Posts (February 2014)

March 01, 2014

Tragedy in Syria. Civil strife in Ukraine and Venezuela. Not enough snow in Sochi and more than enough pretty much everywhere else. The Fab Four at fifty and other reminders of boomer mortality. Here at PND, February 2014 was best summed up by a colleague who dubbed it "the longest short month ever." It was also the busiest month ever for PhilanTopic, as readers flocked to Laura Callanan's four-part series on social sector leadership and found lots of other things to like as well. Here, then, are the six or seven most popular posts on PhilanTopic for the month that just wouldn't end....

What did you read/watch/listen to in February that made you think, surprised you, or caused you to scratch your head? Share your finds in the comments section....

Foundation Fundraising for the 99%

November 20, 2013

(Bradford K. Smith is president of the Foundation Center.)

It’s that time of year again: nonprofit execs are turning over every rock in sight to find the resources they need to close the gap between their ambition to make the world a better place and the hard reality of meeting payroll and paying rent. Many nonprofits rely on government contracts and individual donations, but many also go for foundation grants. Yet a significant portion of the $50 billion in grants made each year by America’s foundations is captured by just 1 percent of nonprofit recipients. Here's something that can help the other 99 percent level the playing field.

FDO_FreeIt's called Foundation Directory Online Free, a searchable database of close to 90,000 foundations and three years of their most recent 990-PF tax returns. Okay, I'm the president of the Foundation Center and can hardly be considered unbiased. But I cut my teeth in this business years ago by using the old Foundation Center print directories and ever since have believed the center to be the most reliable source of information for foundation grant research, period.

Open Foundation Directory Online Free and key in the two-letter code for your state or type a city name to search for foundations in your area. Change the ranking of the list you get by giving, assets, or name. Explore an individual foundation by clicking on its name. The profile will give you contact information, some financial stats, a URL (read on!), and the foundation’s fields of interest. This kind of basic information on foundations is surprisingly hard to come by; 93 percent of America's foundations do not have Web sites. That doesn't mean they don't make grants; they're just harder to find. Moreover, if you really want to dive deep into a particular foundation's grantmaking, FDO Free links you to the foundation's three most recent 990-PF tax returns -- a great source of information that includes a list of all the grants made by that foundation, the recipients of those grants, and grant dollar amounts.

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Most Popular PhilanTopic Posts (October 2013)

November 01, 2013

A shutdown of the federal government that lasted sixteen days, the botched rollout of HealthCare.gov, a well-deserved (!) Red Sox win in the World Series -- October was nothing if not eventful. And now that it's history, it's time to look back at the most popular posts on PhilanTopic during the month:

What have you been reading/watching/listening to that PhilanTopic readers should know about? Share your favorites in the comments section....

Introducing 'FDO Free'

September 17, 2013

(George Ford is Product Manager, Online Subscription Services, at the Foundation Center.)

Fdofree_logoBack in May, the White House issued an executive order and accompanying memorandum which stated that "the default state of new and modernized government information resources shall be open and machine readable." For the nonprofit community, the announcement was intriguing. What would it mean if all that data on foundations and their grants were liberated from hundreds of thousands of IRS Form 990s and, for the first time, made truly open, searchable, and readable by machines?

While it looks like we'll have to wait to find out, here at the Foundation Center we've decided to take a step toward that goal with the release of Foundation Directory Online (FDO) Free, a new search tool that provides free, public access to essential information about nearly 90,000 foundations and more than 250,000 of their 990-PF tax returns. Yes, there are plenty of excellent tools around for retrieving the 990s of grantmaking foundations, including our own 990 Finder. What has been missing, however, is the ability to unlock the rich information available within those forms by searching across them with keywords relevant to your nonprofit's mission and programs. Until now, that was only possible through the Center's premier subscription product, Foundation Directory Online Professional. The launch of FDO Free changes that.

Indeed, FDO Free represents a significant step forward in the Foundation Center's efforts to make more funding data available to a larger portion of the grantseeking public. In addition to the ability to keyword-search across foundation 990-PFs, FDO Free allows you to search the profiles of nearly 90,000 private foundations by name, EIN, or location and to search their last three 990-PFs by name, EIN, location, or keyword.

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The 'More Asking – Less Writing' Approach to Grantseeking

September 12, 2013

(Marilyn Hoyt has been active in the philanthropic sector as a funder, teacher, grantwriter, and consultant for more than thirty years. A co-author of the Foundation Center book After the Grant, she also serves as a trustee of the Association of Fundraising Professionals-New York Chapter and is program co-chair for Fundraising Day in New York. A version of this post appears on the Philanthropy Front and Center - Washington, D.C. blog.)

Headshot_marilyn_hoytWhen I moved from being a grantmaker to a fundraiser, my first thought was "Where am I going to find funders for our work?" Today, after raising over $200 million and working as a consultant, I find it's still the most common first question in fundraising.

As soon as we start researching potential funders, though, the question should be, "How are we going to find time to approach all of these folks?" It's a key question, and how you answer it will determine your success in raising resources to advance your organization's mission and work. Obviously, you can't approach them all. You need to develop a time-efficient method for prioritizing those most likely to fund your work in the near term, and then see what stands between you and securing funds from some of the others.

Funds are not raised by writing; they're raised by asking. Which means you want to increase the time you spend on tasks related directly to asking and reduce the time you spend on writing proposals. To that end, I always tell clients to identify the most fundable parts of their work and learn how to write generic base proposals -- essentially, templates -- that can be revised as needed for individual funders. Just a few of these will go a long way to reducing the time you spend writing proposals and will increase the amount of time available to focus on refining your potential funder list and building relationships with your current funders.

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Most Popular PhilanTopic Posts (August 2013)

September 02, 2013

It's the start of a new month, which means it's time to look back at the most popular posts on PhilanTopic over the last thirty days:

What did you read/watch/listen to in August that PhilanTopic readers should know about? Share your favorites in the comments section....

The Art of the Phone Call: How to Stand Out With Funders

May 03, 2013

(Allison Shirk is a freelance grantwriter based in the Puget Sound region. In her last post, she shared ten tips for making the best use of your grantwriter's time.)

Telephone-largeIn today's world of high-speed communications, it can be hard to make a meaningful connection. Remembering the art of the personal phone call is a great way to stand out in the crowd. Here are some tips when reaching out to a potential funder by phone.

Leave a short but detailed message. Most funders receive dozens, if not hundreds, of phone calls a week. Voice-mail messages that don't include the right amount of detail will be ignored. Leave your name, phone number, and the elevator pitch for your organization/project. Speak clearly and slowly.

Make a plan to connect. Be sure to include a time (during regular business hours) when you can be reached. Mention that you'll call back in two days if you haven't heard from them. Follow up with an e-mail that includes your contact information and a link to your organization's Web site.

Don't drop the ball. If they call back and you miss the call, call them back within forty-eight hours and follow up with an e-mail. Be persistent but respectful.

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