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Follow-up to the Money for Good II Webinar for Foundations

Greg Ulrich

Q. My foundation is small. What can we easily (and inexpensively) do to leverage the Money for Good II research findings to our grantees?

Greg: Many of the recommendations are agnostic as to the size of your foundation – and they don’t cost money. I would focus on two specifically:

- I would incorporate Charting Impact in your grant applications to get consistent, thoughtful information from grantees. You can simply incorporate the questions – they are good, will help you better understand perspective grantees, and will help you compare apples to apples.

- To help your grantees I would recommend sharing the results of the Money for Good research so your grantees know what information to collect, how to communicate it, and how to connect with donors. This helps the grantee – and you as their funder. The easiest way to do that is to forward them the free copy of More Money for More Good when it comes out in a month. Email Lindsay Nichols at if you’d like a copy when it’s available.

Bob: Before your grantees complete their Charting Impact work and share it with you, urge them to spend some time with their board reviewing the questions. These are simple but profound questions and worth spending a board meeting discussing them. After they submit the Charting Impact work to you, suggest they share it with other grantors in order to elicit feedback on the organization’s work. It’s thorough feedback that we improve our services.

Q. All of us in the foundation community have our own agendas and goals to support. Money for Good II seems to focus on philanthropy overall. How can I use the research findings to help up own focused efforts?

Bob: Every agenda and set of goals still needs data on which to make better decisions. MFGII looked at three types of donors but found they were remarkably similar when it came to what kind of data they needed. The MFG findings give you a foundation for your data collection needs – the essential building blocks for any kind of review. If you have special data needs add them to this data foundation.

Bob Ottenhoff

Q: ­My foundation gives smaller grants to grassroots groups. Do you know of examples of how Charting Impact can be used for emerging groups without unduly burdening grantees or us for relatively small amounts of money?

Greg: I think the questions in Charting Impact work just as well for small organizations. Indeed, I think they are useful for early stage organizations just defining themselves. While one doesn’t want to burden a grantee with requests for too much information, asking them to put forward a paragraph or two on 5 questions should be achievable for organizations of many sizes. To reduce the burden, I would encourage them to recycle their Charting Impact, and use it for multiple purposes:

- For internal discussions and board meetings

- For requests for other foundations

- To convey their approach to donors

Q. You mentioned that individual donors are interested in financial data. Exactly what kind of financial information are they seeking?­

Greg: Donors want assurance that an organization is using their money wisely and not wasting it. They want to know that the money is going where they think its going and not in some black box.

As such, donors say they want to know the organizations’ overhead ration and details of where their donation went. They do not want detailed financials like income statements or balance sheets. However, when you ask the same question to foundations, we see that I/S, B/S and detailed financials like expense breakdowns are the most desired; foundations have a much greater appetite for the details.

One word, however on overhead ratio. While it is a valuable piece of data and certainly something donors say they want (and indeed, which they have been conditioned to look for), I would urge you to be careful in presenting this data. It is difficult to put in proper context, and can be misleading. Our perspective is that providing transparency on where a donor’s money has gone – and the good it has done – is a better approach.

Specific financials desired by individual donors: %’s indicate those that said this piece of information was important, for those that said financial data was important:

% of each donation that goes to “doing good” (vs. OH) 94%
How Donation Used 81%
Expense Breakdown 53%
Compensation of key staff 51%
Comparison to Other Orgs 40%
I/S and B/S 34%
Historical Financial Trends 29%

Bob: Greg mentions some important pieces of financial data that donors are looking for when doing research. I would suggest you try to put this data into context for the reader. Most prospective donors only have the slimmest idea about how a nonprofit operates. Tell them something about what you do – and how you do it. Why are you spending money on certain things? Why is this important for meeting your mission? Ultimately, answering some of the “why” questions about money can be just as important to a donor as the “what.”

Q: Our foundation was just formed in May2012. What resources are available that will help with initial organizational setup including website, administration, etc. We don’t have money yet but need to position ourselves.

Greg: There are several resources for new foundations. I would look to the Council on Foundations and the Association of Small Foundations for more. Related to our recommendations today, I would encourage you to fill out Charting Impact. If the founding members / board members each filled it out, I believe you would quickly align on your goals and objectives – and importantly, what you do not want to be.

Bob: The Association of Small Foundations specializes in small foundations with small or no full time staffs and offers a variety of tools, services and conferences. Many small and medium sized foundations partner with companies that manage most of the back office functions of foundations. Two of the biggest are Foundant and Foundation Source.

Topics: Money For Good