Foundation and Corporate Funding

A Half-Century of the Five Percent Rule

In the philanthropic Dark Ages (before 1969) there was no rule that said foundations had to make any grants with their money. Congress more or less closed that loophole with the Tax Reform Act of ’69. There were complications and ambiguities, but in 1976 the “five percent payout requirement” was set in stone. It’s been the default standard for grant-making foundations ever since.

Government vs. Foundation Grants

When it comes to applying for grants, most small to mid-sized nonprofits don’t have a lot of staff resources or a bountiful budget for consultants. The challenge is to decide what funding “suspects” are actually good prospects and to make choices about what to pursue. Often the decision is about whether to put more effort into public / government funding vs. private foundation grant-making.

Grants: Passion Matters, But So Do Cold Facts and Calculated Action

Many nonprofits are born from the grave concern of someone who’s experienced a tragedy, suffered from a problem, or witnessed others’ suffering first-hand. These nonprofits radiate an intensity of purpose that inspires others to action and captures the interest of grantmakers who want to partner with authentic organizations working deeply within their communities.

Junk Money?

Junk Money

In the field of fund development, grants aren’t all that well respected. Once, after I was well known for bringing in millions of grant dollars, a local fund development director recognized me as “the woman who raises all the junk money.” Junk money?

 

Fund development professionals focus on individual giving because it’s the largest piece of the philanthropic pie. Individual giving represented about 73% of all giving in 2011, and 81% if you throw in bequests–the dollars total about $242.20 billion. Fund development professionals also focus here because the dollars are generally flexible, renewable, and growable. Individual giving done right can be the beanstalk to the golden eggs that just keep coming. I get that.

 

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