News and analysis
March 06, 2011

A Focus on Signature Programs Can Help Charities Gain Grant Makers’ Support

Edward Caldwell

Steven J. McCormick, of the Gordon and Betty Moore Foundation, says he tended to view grant makers as “ATM machines” when he headed the Nature Conservancy.

With government money fast receding, many nonprofit groups are hoping that private foundations could be their salvation.

But with foundation assets still well below their high-water marks of 2006, how can nonprofits possibly hope to win bigger grants from those funds—or, even more difficult, catch a grant maker’s attention for the first time? To answer those questions, The Chronicle spoke with foundation leaders, nonprofit officials, and fund-raising consultants about what grant makers are seeking right now. Among their tips:

Emphasize collaboration. Karen McNeil-Miller, president of the Kate B. Reynolds Charitable Trust, says she’s keen on supporting groups like AIDS Care Service, a charity in Winston-Salem, N.C., that provides office space to workers from other nonprofits that offer counseling in computer training, substance-abuse, and healthy eating to the AIDS group’s clients.

She’s not alone, says Robert Carter, vice chairman of Changing Our World, a New York group that provides advice to nonprofits: “Unless you can talk about collaboration with a lot of these major funders, you’re not going to get very far.”

But the approaches don’t have to be as extreme as mergers or long-term partnerships, says Steve Meyerson, a fund-raising consultant in Washington. For example, he is helping a Jewish day school explore ways a nearby university might be able to provide professional development to the school’s teachers.

Focus on pressing problems and reducing costs. Groups that work on urgent issues like unemployment may have an advantage in getting support. “You have to tie into the current times in some fashion without making up programs,” says Mr. Carter.

At the same time, foundations want to support groups that have awakened to the reality of what Doug Stamm, chief executive of the Meyer Memorial Trust, in Portland, Ore., calls “a decade of deficits.” If a charity has a plan for how it can provide services more efficiently—and, better yet, ideas for how that cost-saving approach could be applied to other groups—it will win favor in grant makers’ eyes.

Seek support for the group’s most successful programs. Foundations are more open to supporting new programs today than they were during the depths of the recession, but they certainly won’t look favorably on groups that want to go into new areas but can’t raise enough to support what they already do. They also tend to appreciate charities that have pared back on the number of programs they offer. Says Rachel Monroe, president of the Harry and Jeanette Weinberg Foundation, in Owings Mills, Md.: “If there is a nonprofit that is struggling with funding and sustainability, now is not the time to ask the Weinberg foundation, at least, to fund an 'innovative new program.’”

Be clear about how money will help. Some foundations are open to helping nonprofits bridge a gap when government payments stall—to a point. Robin Smalley, international director of Mothers2Mothers, a Los Angeles nonprofit that provides assistance to pregnant African women and mothers with HIV/AIDS, says she’s seeing interest from foundations in helping her group meet shortfalls from stalled and reduced U.S. Agency for International Development grants. But Ms. Smalley says she’s very clear about how that money will help. Not all nonprofits are, says Ms. McNeil-Miller of the Kate B. Reynolds Charitable Trust. “We have turned down plenty of organizations that have just wanted what they called 'bridge funding,’ but it was the bridge to nowhere. There was no plan.”

Be honest about finances. Foundations appreciate a candid assessment of a charity’s financial situation. Beth Nathanson, associate director of development at the 92nd Street Y, in New York, says she brings up her group’s fiscal health during informal chats with donors. “Initiating the conversation shows you have confidence,” she says. Also, her charity discusses its short- and long-term plans to reduce a deficit in its grant proposals.

Line up with the foundation’s goals. Back when Steven J. McCormick led the Nature Conservancy, he says he tended to view foundations as “ATM machines.” Now, as head of the Gordon and Betty Moore Foundation, in Palo Alto, Calif., he says nonprofits need to do a better job than he sometimes did of understanding precisely how foundations are trying to advance change and making the case for how their group’s work fits into that.

Ask peers for advice. People who work at nonprofits that have recently won a grant from a particular foundation can be a good source of intelligence. Mr. Meyerson advises fund raisers to speak with at least one recent grantee before approaching a foundation. Some charities might not be willing to share what they know, but Mr. Meyerson said nonprofits will probably have luck if they approach groups that don’t work on the same issue.