The murky business of grantseeking
By Sidni Shorter In Fundraising Posted November 18, 2013 0 Comments

The murky business of grantseeking

In spite of how informed we’ve all become about how to run our nonprofits, how to measure our impact and how to update our business models, a recent study by the Center for Effective Philanthropy reports a variety of telling statistics that reveal we still don’t know a lot about how foundations choose grantees.

Close to 140 nonprofit leaders were surveyed by the Center. Some of the topics charity executives want to clarify include:

  • how foundations evaluate which nonprofits are doing well and which are not.
  • how foundations decide what to support (in the interest of wasting less time on applications).
  • how changes within the foundations may affect a charity’s support.
  • how foundations can inform grantees sooner if they cannot fund them again at the same amount.

This yearning for transparency and certainty is understandable and I can empathize with many nonprofits that depend heavily on grantmaking. To the foundation community’s defense, it is much like individual donors: each has unique qualities and focus areas. You have to build relationships with foundations in order to gain insight into their funding behavior. And much like individuals, they are subject to external influences like the economy. As a professional who’s dedicated to helping nonprofits manage their financials and engage in forecasting, this kind of study further underscores the importance of stepping back and looking at your composite of incoming revenue each year.

Of the revenue you raise, how much of it can be categorized into each of the following types of funds?

1. Definite

2. Highly likely

2. 3. Tentative

If more than X percent falls into the “tentative” category, then you need to explore how you can change the mix to weigh more heavily in the “definite” and “highly likely” categories. I recognize no kind of fundraising is a sure thing but doing this simple exercise of evaluating what type of funds you raise every year will help you focus on specific types of revenue rather than investing considerable effort and time in risky income. This process also eases the pressure on forecasting more scenarios to account for uncertain funding. Visit the Center for Effective Philanthropy site for more information about the study or the Execute Now! site for information about our nonprofit financial services. By Erica McGeachy Crenshaw, CEO of Execute Now!

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