CHAPTER 13 | AFFILIATE FUNDRAISING

SEEKING FOUNDATION FUNDING

I. TYPES OF FOUNDATIONS

  • Independent Private Foundations
  • Corporate Foundations
  • Community Foundations
  • Family Foundations

II. FIRST STEPS

III. IDENTIFYING FOUNDATIONS

  • The Foundation Center
  • The Grantsmanship’s Center
  • The Council of Foundations

IV. PROPOSAL WRITING

  • Overview/Executive Summary
  • Organization Background
  • Needs Statement
  • Project Description
  • Goals and Objectives
  • Outcomes and Evaluation
  • Sustainability
  • Budget and Budget Narrative

IV. RESOURCES FOR GRANT WRITING

Foundation grants are a potential source of short-term support for affiliates.  Several affiliates have successfully competed for five- and six-figure grants.

Although a tiny handful of affiliates have benefited from government grants, they are not a recommended source of support because the application process can be very cumbersome and the reporting requirements very time consuming.  In short, they often can be more trouble than they are worth.

I. TYPES OF FOUNDATIONS

1. Independent Private Foundations

Independent private foundations have national, regional and local focuses. They usually have endowments ranging in size from several million to several billion dollars. These foundations are not governed by their benefactor(s). Their areas of grant-making are defined by their mission and issues.

Affiliates are more likely to receive support from regional and local foundations. Affiliates should not approach national foundations without prior approval from the ACE National office since it targets them for support.

2. Corporate Foundations

Corporate foundations are independent entities separately established and endowed by a corporation. They are indirectly linked to the parent corporation because its top executives usually sit on the foundation’s board. A corporate foundation’s primary giving focus is usually, but not necessarily, associated with the parent company’s business.

Corporate foundation grants should be distinguished from company donations or sponsorships. The latter are funded out a company’s marketing or community relations department. A company makes a donation for reasons of increasing its visibility in a market, promoting a brand, or gaining community good will. Companies wish to demonstrate that they are responsible citizens in a community.

Because corporate foundations and corporate donations are funded out of separate pots of money, it is theoretically possible for an affiliate to obtain support from both sources.

3. Community Foundations

Community foundations pool the assets from many donors, including family foundations and individuals. Sometimes a small family foundation will turn its administration over to a community foundation. Thus, a community foundation can be a bundle of several separate funding sources.

As the name implies, a community foundation targets a specific community. Many grants respond to social, economic, and educational needs of community. Consequently, community foundations can be a good bet for ACE affiliates to explore.

4. Family Foundations

Family foundations are the most widespread type of foundation. Individuals and families by the thousands have created their own foundations. Their endowments range from the low six figures to millions, and their annual gifts correspond to the size of their endowments.

Few family foundations openly solicit proposals. Families closely control the foundation’s donations, which usually are directed to their favorite causes. Receiving a grant from most family foundations depends on a personal relationship with one of the foundation’s board members. In some cases though, if a family foundation’s funds derive from someone in the design and construction industry, an ACE affiliate may be able to use this angle to open the door.

In sum, ACE affiliates should not automatically rule out finding support from a family foundation. They just need to find the right match.

II. FIRST STEPS

In any type of fundraising, an ACE affiliate seeking a contribution, sponsorship, or grant first must define the organization’s need(s) in specific terms.

  • How will the funds be used?
  • Exactly what is the project being proposed?

Defining the need for a grant and the proposed project itself requires an affiliate know where it has been, where it wants to go, and how it is going to get there. In other words, the project should emerge from and be consistent with a strategic plan.

Foundations typically do not support an organization’s general operating expenses. They prefer to help a non-profit expand its outreach or move in a new direction.

Clarification of a project’s intended beneficiaries is another key preliminary step to seeking a grant. Affiliates can develop a basic demographic profile of their students by drawing information from the ACE database – gender, race/ethnicity, year in school, etc.

Because many foundations target at-risk youth, it is important to determine students’ socio-economic backgrounds. Starting in the 2018-19 program year, students registering for ACE were asked whether they are on the free or reduced-lunch program. This Federal government-subsidized program (sometimes referred to as the “Title I program”) requires that a student family’s income not exceed certain levels. Income levels for the free lunch program are lower than for the reduced-lunch program. From the ACE database an affiliate can determine the percentage of its students on this program.

If an affiliate draws students from a small number of high schools, it is easy to paint a profile of these schools. Greatschools.com is a convenient source for much background information about individual schools – test scores, ratings, faculty and student demographic profiles, etc. A school’s percentage of students on the subsidized lunch program can be found on this website.

III. IDENTIFYING FOUNDATIONS

After conceiving a project or activity and defining the characteristics of the project’s beneficiaries, the affiliate can start the search for funders whose interests (geographical limitations, mission priorities, target beneficiaries, etc.) match as closely as possible an affiliate’s activities, purposes, and plans. When searching for suitable foundations, be on the lookout for those who focus on afterschool programs, workforce development, underserved or at risk youth, and STEM education.

The following three organizations provide online databases that facilitate the process of identifying the best foundations to target.

1. The Foundation Center

The Foundation Center is a major resource for information about foundations of all types and fundraising. It has a free Foundation Directory Online that enables researchers to search for foundations by name and location. (Registration is required to access the directory.) Very basic background and contact information, including web address if available, is given for each foundation.

For a paid subscription, the Foundation Directory Online provides an in-depth profile of many foundations. Access to this online directory allows searches by many categories including subject of grants. At the Center’s regional offices and “cooperating collections,” it is possible to access the full databases without charge. The several hundred “cooperating collections” can be found in every state. Visit the list of “collection” sites here.

Like all non-profit organizations, foundations are required annually to file with the IRS a 990 tax report. The 990’s contain important information about a foundation, especially its board members and the grants made (name of organization and size of grant). This information is not readily available about small foundations, and so the 990’s can be a valuable research tool. The foundation descriptions contained on the Foundation Finder, mentioned above, provides hot links to several years of a foundation’s 990 tax reports.

The Foundation Center has an excellent free on-line webinar titled Introduction to Finding Funders.

2. The Grantmanship Center

The Grantsmanship Center’s website provides one-stop shopping by state for: top grant-making foundations; corporate giving programs; and community foundations. When available, the foundations’ websites are given, thus facilitating direct exploration of a foundation’s priorities and proposal procedures. In cases where a website is not given, turn to the Foundation Center’s database to see what information it contains.

3. The Council of Foundations

The Council of Foundations has an excellent tool to locate community foundations. Another way to identify funding sources is to explore who supports organizations like ACE – for example, an afterschool program, STEM programs in out-of-school settings such as museums. Their funders are likely targets for ACE.

IV. PROPOSAL WRITING

After developing a list of potential foundations to approach and carefully studying their priorities and application guidelines, it is time to approach the funding source. Some foundations are amenable to receiving calls. Such calls take preparation and should be directed to a knowledgeable person on the funder’s staff. Have specific questions prepared and perhaps even a script describing the work of the affiliate. (For a sample script, click here.)

ACE affiliates should take advantage of any personal connections a board member or even a mentor has to anyone on the funder’s staff or board. If the funder does not publish an annual report or post its board and staff list on its website, its 990 IRS tax report always provides the names and organizational affiliations of board members.

Because they are overwhelmed with requests, many foundations put up walls limiting or prohibiting direct contact with grant seekers. Some foundations also state that they do not respond to unsolicited proposals. They may first require a 2- or 3-page letter of inquiry. This is a mechanism for preventing grant seekers from needlessly expending a lot of effort on a comprehensive proposal.

Another way funders today deal with the large volume of proposals is to require on-line applications. They often impose a rigid number of words allowed for each section of the document.

Letters of inquiry and full proposals often require much of the same information, just in different degrees of extensiveness. The most common elements of a proposal or letter of inquiry are as follow:

1. Overview/Executive Summary

This succinct statement, which should be written last, should encapsulate the background, capabilities and accomplishments of the grant seeker, the nature of the project, a description of the intended audience, the intended results of the project, and its cost and timeline.

2. Organization Background

This section explains the mission, history and purpose of the organization. Emphasize how the affiliate meets community needs and what its impact has been. Whenever possible, demonstrate the affiliate’s impact with data – e.g., number and amount of scholarships awarded, number of students involved overall and for the most recent year, number of volunteer mentors and their total number of hours donated, activities of alumni (have any returned to work in the community, or are any currently mentoring?) Data from ACE’s student and alumni surveys can be cited in this section of the proposal.

3. Needs Statement

What needs in the community does the project address and attempt to meet? The answer to this requires some research and thought. Funders will support an organization because it meets needs, not because it has its own needs. What is happening, or not happening, in a community, and how does the ACE project respond to this? Wherever possible, tie in the funder’s priorities to the statement of needs.

4. Project Description

This section requires a nuts-and-bolts explanation of what the proposed project is and how it will be carried out, by whom, and over what time frame. The description is like a step-by-step set of instructions that provide just the right amount of detail.

5. Goals and Objectives

A few clearly stated, broad goals for the project or initiative are necessary. They should be amplified by objectives that are specific and measurable – what will happen or change (e.g., five new schools recruited to participate in ACE), what benefits will be accomplished for whom.

6. Outcomes and Evaluation

This section should explain the project’s outcomes, which need to closely relate to its objectives, should be explained, as should a plan for the organization’s success in achieving the outcomes. Organizations frequently shortchange evaluation, but funders pay close attention to this because they want to see if their money has been effectively spent.

7. Sustainability

Since funders usually make grants on a one-time basis, they are interested to learn how the grant recipient will be able to carry on the project once the grant period expires. This section should clearly explain how the affiliate’s capabilities will be enhanced by the grant so that the initiative will be sustained.

8. Budget and Budget Narrative

The dollar amounts set forth in a budget do not adequately explain how the money will be spent. Thus, it is advisable to provide a short narrative accompanying the budget.

Anecdotes, quotes, and vignettes of successful students, alumni, and mentors bring to life any data cited in a proposal.

Foundations may require as a part of proposals a variety of substantiating documents, commonly including:

  • Proof of an affiliate’s non-profit status, a letter from the IRS certifying that it is classified as a 501(c)(3) organization. Except for a very few affiliates that separately incorporated as non-profit organizations, all affiliates are considered by the IRS as a subsidiary of ACE National and thus fall under its umbrella non-profit classification. (Affiliates needing to produce documentation of their non-profit status for purposes of a grant application can contact their ACE Regional Director or the National Office.)
  • Operating budget and perhaps year-to-date financials.
  • Most recent audit report.
  • Board list.
  • List of major sponsors or funders.

As appropriate to the project for which funding is sought, a limited number of other attachments might be voluntarily added to a proposal – for example, a recent newsletter or a descriptive list of noteworthy alumni.

The first grant proposal is always the hardest to develop. Because much of the information in the first proposal can be recycled with slight updates or modifications, affiliates should look for other targets of opportunity in the foundation world.

V. RESOURCES FOR GRANT WRITING

The Foundation Center has several free tutorials about writing proposals. These include webinars, in-person training, a video, and a self-paced course.

The Foundation Center also provides samples of cover letters, letters of inquiry, letter proposals, budgets, and full-blown proposals. A number of the samples include helpful comments by foundation officers.

See also Tips for Grant Writing.