Current and Future Trends in Foundations

by Jason Dick · 3 comments

Foundations of the past traditionally gave a large number of small grants to many different organizations. It was about helping as many organizations as possible and granting to organizations that had the very best proposals. I think that today (and it will continue in the future) foundations are starting to become more and more strategic. They are choosing specific problems or community/global areas that they want to make a difference in and are granting in large capacities to these organizations. They want more information and they want more outcomes. They are starting to ask real questions and really want to be a part of the non-profit’s current and future success. I know it is true with business foundations and from other conversations I’ve had it seems to be true in community foundations as well that they are giving out fewer grants at a higher dollar value.

One thing that I’ve been really encouraged to see from a number of foundations is their commitment to matching dollars and multi-year giving. It is a brilliant idea for a foundation to ask a non-profit to leverage their dollars in such a way that it doubles the value of their gift. With multi-year giving it enables a non-profit to have a stead flow of support for more than one year in a small non-profit this allows the organization to spend time thinking strategically about the future and build a stronger financial position.

There is an increase in foundations that want to help small non-profits succeed. The Craigslist Foundation has created what they call a “Non-profit Boot Camp” where they have podcasts and training sessions from experts on how to start and run a small non-profit. The Mission Increase Foundation has regular workshops to train their grantees in board development, fundraising, and other high level strategic organizational issues. Every grantee is required to be a part of the program and they are doing incredible things in the communities they are in. Social Venture Partners takes an active volunteer role in the organizations that they partner with the organization and take and active role in strengthening systems, management practices, and strategies.

I’m participating in the January 21st Giving Carnival: What will foundations look like in 10, 25 or 50 years? A few predictions below:
• Granting organizations will continue to become more strategic funding only those areas.
• There will be fewer grants but at a higher level.
• There will be more “online foundations” like GiveWell.
• Today more and more foundations are starting to have blogs. I think in the future some blogs will have foundations. Who know maybe one day A Small Change will be a foundation to fund the fundraisers.

Do you have any stories or comments about what you see foundations doing in your area or with your non-profit? Do you have any predictions of your own? Leave a comment below.

{ 2 comments… read them below or add one }

Leo Notenboom January 18, 2008 at 12:08 pm

In many ways many foundations are no different, really, than
major donors. As we’re seeing a shift into results-oriented
accountability form more sophisticated donors it’s no real
surprise that we’re seeing the same from foundations.

And as with your major donors it pays to establish
relationships with foundations. I’m a managing partner in a
small family foundation and I’m quite amazed at the number
of grant requests we recieve that are the grant-writing
equivelant of a cold-call. They have zero lead-up or
relationship building, and explicitly ignore the “we are not
accepting grant requests at this time” on our web site. That
may have worked in the past, but in my opinion not today.
Relationships are more important than ever.

And I totally agree with the narrower focus – I know our
foundation has always maintained fewer yet deeper
relationships with the organizations it takes on. It allows
us to understand the beneficiary better and have a much
higher level of confidence that our grants are being used in
ways that the foundation intends.

But really, all that’s really saying is what I’ve said
already: it’s about the relationship.

I hadn’t thought a lot about matching programs, and it’s an
interesting concept that I may want to investigate further.

Leo

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Dave January 29, 2008 at 9:51 am

I think nonprofits are changing as well. They are trying to get away from the grant model of funding, they are looking for income generation strategies, utilizing non-financial resources, using creativity to become more sustainable. citizenbase.org has a good collection of examples showing this trend. It’s hard to say who’s responding to who as far as the trend away from one-time large grants. I like the trend of matching donations putting responsibility on the nonprofit to engage their community.

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