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Foundation Giving

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Foundation Giving

A User's Guide to the wealth of U.S. Foundations

This article, by Ken Hoffman, originally appeared in Third Sector on February 9, 2005.

Eyes grow wide when UK charities see the money disbursed by US foundations: £9bn in 2003. Unlike giving from individual donors, with all its messy tax rules, grants from foundations are direct. In the world league table, Britain is second only to South Africa in receiving grants from the US.

Bedazzled by tales of riches in the New World, grant-seekers, like conquistadores, can go astray. Foundations may appear monolithic from a distance, but there are in fact many variations. Recognising the different strains is as important as following the application guidelines.

The large, 'programme-driven' foundations, those that publicly articulate a giving programme, have recognisable names. Of these, Ford, Gates, Packard, and MacArthur are the leaders in international giving. Besieged by grant-seekers, their staff search for shortcuts to assess credibility and potential.

This comes most often from friends and colleagues. Establishing a strong, personal introduction to foundation staff is the surest way, if not of receiving a grant, then at least of receiving a hearing.

At smaller, but still professionally staffed foundations, the officers tend to be generalists. The danger here is that requests must ease into the jargon of the field of endeavour, for fear of losing the reader. At family foundations, substance is replaced by connections. A grant proposal is merely written confirmation of the deal already struck between the charity's friend and the family foundation's trustee. At corporate foundations, philanthropy as altruism almost vanishes. The grant-seeker needs a convincing argument for how the charity can put the donor in a good light - the line between giving and marketing grows faint.

But in addition to the right approach, the amount of money sought must balance competing interests. The request must be within the normal range of the donor's giving, yet also be appropriate to the charity. A single-project grant rarely covers more than 25 per cent of a project's budget.

Fortunately, US foundations' tax returns, containing every gift it made in a given year, is available for free at www.guidestar.org

US foundations disburse serious money. Yet the variations among the 60,000 donors are vast. Initiative lies with the grant-seeker, even if power is in the hands of the grant-maker. The trick is in articulating the common ground between the two parties.