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Joanne Oppelt

About Joanne

How to Build Donor Relationships with Foundations

In the first installment of this six-part series, I explain why successful nonprofit fundraising is NOT about the money. In Part 2, we explore how to build donor relationships with individuals. In this Part 3, we explore how to build donor relationships with foundations.

Approaching Foundations

Like dealing with individuals, relations with foundations are based on mission fulfillment. And approaching them is based on successful mission fulfillment. Like individual donors, foundations see money as a vehicle to mission fulfillment. The question foundations ask is, “Where will our money best be used to achieve our legal objectives?”

Yes, I said legal objectives. Foundations are legally bound to the missions for which they exist. If they do not adhere to their legally stated purpose, they are at risk of losing their tax-exempt status. The IRS also requires foundations to give out a certain amount of their corpus every year. That’s why the IRS requires foundations to make their tax returns, called 990’s, available. So the public knows what they give money to and how they give it out.

In building successful relationships, there is no need to survey foundations the same way you would survey individuals. The information is already there. You just need to go through the 990’s and match your organization’s mission and needs to their requirements. Keep in mind, though, it is still an exchange relationship. Each partner gets its objective met through the relationship with the other. The nonprofit gets the money; the foundation is looking for successful mission fulfillment.

And, since it is public information, foundations expect grant-seekers to read their 990’s and be familiar with them. If you want to be successful in getting donations from foundations, then start with knowing the foundation’s mission, interest areas, geographical giving area, and funding range. You can glean all that information from the 990. 990’s can be attained by searching a foundation’s website, asking the foundation for it, or visiting a library with collection of foundation tax returns. You can also view them on Guidestar.

Of course, that’s a lot of information to get through. It may be worth your while to subscribe to a foundation database that can search 990’s by relevant categories, such as issue, geographical scope, funding range, and others. Two foundation databases that I have found helpful are the Foundation Directory Online and Foundation Search.

So, researching 990’s should be part of a successful foundation fundraising strategy. Do your research before approaching any foundation. It’s public information. Foundations expect you to know it.

Communicating with Foundations

Since foundations expect it, know who they are. In writing your proposals, make sure the names, mailing addresses, and salutations are correct. If the basic contact information is not correct and it doesn’t mean enough to you for you to know the most basic facts about them, why should they get to know you and your organization? After all, if you can’t get the name or address right, how in the world will you convince them that you can successfully manage a grant, financially or programmatically? The foundation will ask, “Will the foundation’s money be used for what it’s intended? Will we get reports on time? How do we know the information is trustworthy, if you don’t pay attention to what you’re doing?”

By the way, do you write good grant proposals? When writing grant requests, do you watch for misspellings and grammatical errors? What about the budget? Is everything in the narrative accounted for in the budget and is everything in the budget accounted for in the narrative? Is your financial and programmatic content consistent with itself? Do your numbers add up? Is your math correct? Check and double check.

Details count. The most common mistakes are the sloppy ones, like errors in name, address, salutation, spelling, grammar, and math. Does your grant-writing process include proofreading and editing?

Your foundation fundraising strategy also sends the message, “I can be trusted.” In your interactions, be authentic. Be honest. Be forthright. In developing and maintaining successful foundation relationships, your integrity is your biggest asset. Do what you say you’re going to do. Communicate progress, including delays and failures. Address changes in circumstance. Communicate, communicate, communicate. If there are changes in scope, let the foundation know before the end of the grant. No one likes surprises.

And, it almost goes without saying, when you interact with foundations, always be courteous and respectful. It’s people who answer the phone, read the proposal, make the decisions, and report back to their board and the IRS. Like individual donors, people who represent foundations need to be acknowledged and validated. If they’re exasperated and short with you, it means they’re having problems they don’t want to deal with. It isn’t easy giving away money: everybody wants some of it and all the causes are generally worthy. It’s not easy to tell a nonprofit that the foundation can’t fund you. Be sensitive to that.

Bringing in the Money

If you do end up getting a donation from a foundation, first pat yourself on the back and shout “Hooray!” Let the rest of the office in on the celebration. Everyone will be happy you brought in the money. Enjoy the positive vibes while they last. You worked hard and your hard work paid off.

But this isn’t the end of the road. You still have long way to go ‘til the end of the grant funding process. Getting a donation from a foundation is just the beginning. The end of the proposal-writing process is after the funding ends and all the reports are in. On time. And accurately.

It’s important to remember that grants are legal contracts. Your organization is bound to perform by the terms described in the grant. Remember that foundations have legal obligations. Well, you’re the vehicle for fulfilling those obligations. That’s why it’s so important to communicate changes as soon as possible to funders. It’s not because they like being sticklers. It’s because they are held legally liable for their decisions. They need time to adjust to any changes in terms in the contract, just as you do.

That’s why it’s so important as well to develop grant proposals in a group with program, finance, and development input. You, as the fundraiser, make the ask, develop the relationship with the foundation, and report back to it. Program needs to fulfill the terms of the grant. As a legal contract, you better be sure program people can do what you say they can do. And you only know that by asking them. Are your program goals realistic and achievable? Only someone intimately involved with implementing and managing the program will know that information. Don’t overpromise deliverables to get the money; your program manager will hate you for it, you will probably fail, and the foundation will be ticked off. Not worth it. Never overpromise.

And you need finance to tell you how much it will cost. It’s your finance person who can compare your grant budget to the agency’s chart of accounts to make sure all costs are covered, both direct and indirect. It’s your finance person with the information on fringe benefits and square footage rental costs. It’s your finance person who can tell you what financial reports are possible and what’s not. The last thing in the world you want to do is get grant funding that costs more to administer than what you receive. If that’s the case, walk away. It’s your finance person who can let you know when the grant means losing money.

If you don’t already, I suggest you develop an ad hoc working group consisting of you, a program manager, and a finance director to provide input into developing proposals and writing grant requests. It will pay off.

In the next installments I will talk about building donor relationships with corporations (Part 4) and government funders (Part 5). Then I'll bring it all together (Part 6).

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