In the early 1990s, funders began to de-emphasize projects that
dealt with intractable problems on a grand scale, in favor of
projects that address more manageable problems on a local level.
That trend is holding solid as we move into first decade of
the 21st Century. Funders continue to favor giving to small,
grassroots nonprofits rather than to large, national organizations.
Funders continue their interest in funding:
- Evaluations that document methodology in solving problems.
- Projects to build intellectual capital at the regional
level.
- Advocacy and projects that bring people together to discuss
major issues.
Funders are most interested in organizations that leverage
resources, collaborate with other groups, and build their
organizational capacities. A nonprofit organization would
do well to incorporate these strategies into its organizational
structure, not only to improve the organization's effectiveness,
but also to attract funding.
New Attitudes
- Funders now work hand-in-hand with nonprofit organizations
to realize common goals. They act as participants as well
as funders.
- Foundations and corporate donors help to streamline and
standardize the grant application process. Over the past
few years, a standard application form has been developed
that is being used by approximately 50 foundations throughout
the nation.
- There is also a trend among funders to offer feedback
on a proposal that has been declined. The letter of rejection
can be used to identify the weaknesses of the request and
to strengthen the project and future proposals. Take advantage
of this excellent opportunity to establish the organization's
credibility with the funder.
- At the same time that funders are working closely with
nonprofits, they are also demanding more from grantees in
the evaluation process. Funders need to know if the money
invested does in fact solve the problem identified. A strong
evaluation is a crucial component in the grant proposal.
- Dissemination is another component of the grant request
that is increasing in importance. Funders have been funding
the same social and economic problems for decades. They're
tired of combating the same issues in one community after
another. Disseminating successful model programs is essential;
once the problem is solved, tell others how it was done.
If it's an old problem with a new approach, tell the funder
how the information will be shared with others. Or, if an
old problem will be solved by adopting someone else's model
program, this can also be attractive to funders. The dissemination
component of a proposal can make or break the request.
- Another interesting new attitude is that of corporate
donors who are empowering their workforces. Bill Gates is
a good example of this, ensuring that his employees are
"getting rich." We are not talking about a small circle
of associates, but about hundreds of millionaires who in
turn are in a position to make their own decisions about
where their charitable dollars should go. It's an interesting
trend in philanthropy.
How They Give
- Funding from corporations and even smaller businesses
used to be in the form of cash donations made through established
corporate giving programs. Today, with large corporations,
nonprofits can also seek funding from other departments
such as marketing, human resources, and government affairs.
- Cash donations from corporations have leveled off over
the past few years. Product donations and in-kind contribution
of services are becoming more prevalent among corporations
and small businesses. Corporations are also providing nonprofits
with managerial advice, technological and communications
support, and teams of employee volunteers.
- Program-related investments (PRIs) are becoming more
of an option for nonprofit organizations seeking funds to
start an earned-income venture. A PRI is simply a no-interest
or low-interest loan, the terms of which are usually quite
flexible. Funders make PRIs to assist nonprofit organizations
leverage other funds. PRIs are often used to develop low-income
housing, but they can also be used for fundraising events
or to stimulate gifts to a capital campaign.
Charitable Giving Trends
- Combined fundraising campaigns in corporations and communities
will continue to be questioned, and their results will decline.
- Individual donors will increasingly feel a need to belong,
not only through contributions but also by offering advice
and ideas.
- Technology will play an increasing role in solicitation
practices and procedure.
- Donors seek organizations that are focused on their missions
- solving problems, with a high-results orientation.
- Incorporating volunteers into major donor programs will
continue to be a success factor of large gifts programs,
in partnership with increasingly professional staff.
Watch for trends in the area in which you work by clipping articles
from trade magazines and newsletters, and downloading information
from the Internet.
Prevalent Issues and Hot
Topics
- Funders continue to be guided by the issues of the day
in their decision-making. For example, in the early 1990s,
money was dedicated to the elderly, AIDS research, math
and science education for children, and women and violence
issues. Today the focus is on health care, welfare reform
and its repercussions, the environment, particularly wilderness
protection and global climate change, technology programs,
and Native American issues. Other hot topics are job creation,
neighborhood development, and school-related charities.
This doesn't mean there aren't funders for other topics,
but it is helpful to know which ones are currently in favor.
- Environmental issues are receiving an increasing share
of corporate donations. Until recently, environmentalism
has generally inspired fear in corporate America, but the
new corporate attitude supports sustainable development,
accommodating both business and the environment. Giving
to environment/wildlife programs increased by 5.7% in 2000.
Total contributions were estimated at $6.16 billion.
- School reform and school-to-work programs are in favor
with corporate funders. Corporate giving to elementary and
secondary education has increased substantially over the
past several years.
- Health giving increased by 4.9% in 2000. Total gifts
to health in 2000 reached $18.82 billion.
- Grants to international organizations have increased
markedly in recent years. A total of $2.71 billion in charitable
support went to relief agencies, exchange programs, research
institutions, and others.
- Businesses are smarter about the way they give. AIDS
is still a major issue for insurance companies who want
to reduce claims, pharmaceutical companies who want public
support for the commercialization of AIDS drugs, and clothing
design companies who want to support the large number of
gays and lesbians in their workforce. Literacy is a major
issue for city newspapers and publishing companies such
as McGraw Hill and Prentice Hall, who want to halt the decline
in readership. Likewise, broadcasters and cable companies
are compensating for their role in the decline of literacy
by supporting projects such as workplace literacy programs.
- The telecommunications, computer, entertainment, and
media industries are building their charitable giving programs
around technology. These donors are sophisticated and aware
of urgent social problems. Unlike many companies, they are
not "dumping" inventory on nonprofits, but rather are trying
to excite the imagination of their own in-house engineers
by finding public interest applications for their products
and services. What they want are good stories to tell about
how their products and services can be used.
- European and Asian companies are establishing formal
giving programs in the U.S. More than 200 Japanese companies,
including Hitachi, Sony, and Toyota, have initiated U.S.-based
foundations that are likely to increase their giving over
the next five to ten years.
- A 1999 Independent Sector Giving and Volunteering in
the U.S. survey reports that 90% of individuals volunteer.
42% found out about volunteer opportunities through personal
contacts and 35% through participation in an organization.
For more information go to www.independentsector.org.
- When the economy gets a cold, many nonprofits get pneumonia.
Not just because we lose money from donors, endowment income
goes down, etc., but because when times are tough there
is a larger demand for our services. The resulting funding
trend: more donors are giving to the "basics"
- homeless, disaster relief, etc., and less to the arts
and culture, public broadcasting, etc.
- People no longer feel as if they can change the world.
And they aren't sure you can do it either. So they are looking
for very specific causes with measurable results that they
can give their money to.
- Keep your eye on the new office of Faith Based and Community
Initiatives. The idea is for this new office to help build
public and faith-based partnerships. The key phrase here
is "charitable choice."
- You can expect to see more and more electronic governing
- RFPs, forms, reporting, etc., via the Internet instead
of the postal service. In fact, many have already made a
pretty substantial move in that direction: making existing
processes more efficient.
- A new public service is emerging in which there will
be fewer permanent federal employees, more temp employees,
and more functions performed by contractors and grantees.
- Some tech companies will rise from the ashes - keep your
eye on these companies for possible future funding.
top |
