When soliciting grants from foundations, it's tempting to go for the deepest pockets first. But nonprofits who focus on size only are missing out on a major source of funding, and it's easier to come by than they think.
Any nonprofit organization can tell you that soliciting grants can be a grueling and stressful task, especially when there are millions of dollars on the line. But as Paige Snow, chief philanthropic and marketing officer at Foundation Source discussed in the latest webinar from The Chronicle of Philanthropy, if your nonprofit is exclusively going after the big fish—large foundations with massive grant offerings—you’re missing out on the tens of thousands of foundations worth $50 million or less that make up the vast majority of the private foundation sector. Here are Snow's top three reasons for soliciting grants from private foundations, and our tips for for using your relationship capital to gain access.
Unlike larger foundations, small foundations operate outside of the typical formalities of philanthropic giving. That lack of bureaucratic back-and-forth makes for a much more manageable application process and quick turnarounds on funding requests, including those for critical general operating needs. Small foundations also tend to have fewer funding restrictions and offer more discretionary granting than their larger counterparts.
Networking Takeaway: With fewer hoops to jump through, your organization can more easily reach high-level influencers within the foundation, especially if you have a warm introduction to get you in the front door. Your organization's network may provide a path in, if not directly, than through a secondary contact. Don't limit yourself to connections at the top of your hierarchy; rather, put out a call to all employees and board members to see if they have contact points at your target foundations.
Big numbers draw big crowds, and when it comes to the small sliver of foundations worth $1 billion or more, your organization will be competing with nonprofits of every size from across the nation—hence the punishing and intense application process. By contrast, small foundations tend to avoid unsolicited requests entirely, preferring to give based on community needs and personal relationships.
Networking Takeaway: The key here is outreach early and often. Don't wait until you need a grant; rather, stay abreast of what your target foundations are up to in the news and in the community. Reach out with congratulations on new foundation projects and information on your own nonprofit's milestones. Meet a key administrator for coffee and get a sense for her passion projects. That way, your grant application will carry relationship currency when it hits her desk.
That focus on relationships also makes smaller foundations a reliable source of continued giving. In fact, according to a recent Foundation Source client survey, the vast majority of small foundations reported that at least 75 percent of their annual grants went to organizations they’d supported the year before. Small foundations prefer to work with organizations they trust, so once you’ve established a relationship with one, they’re likely to continue working with you in the future.
Networking Takeaway: The end of the grantmaking process is no excuse to fall out of touch until next season. Continue to nurture the connections you've made between applications, regardless of whether you receive funding or not.
For other ways to leverage your relationships as part of your fundraising strategy, download our latest nonprofit white paper: "Why Relationship Mapping is Critical for Your Nonprofit."