A collection of news items about grants, scholarships, proposal writing, and other topics compiled by Jon Harrison, Funding Center Supervisor, MSU Libraries. For more information, visit the Grants and Related Resources web page or contact Jon Harrison at email@example.com
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Donor-advised funds are fastest-growing source of grants
Donor-advised funds enable individuals to make donations to sponsoring 501(c)(3) organizations that invest these assets and then make grants to charities based upon the recommendations of the donors. Collectively these funds now hold over $32 billion in assets, reports Sarah Frostenson ("Donor-Advised Funds Keep Up Rapid Growth, The Chronicle of Philanthropy, May 23, 2013). Their assets grew by almost 20% from 2011 to 2012 and have surpassed their pre-recession asset levels by nearly a third, far outstripping most nonprofits and most foundations. They made almost $6 billion in grants in 2012 (up 7.4% from 2011).
Donor-advised funds don't operate under the same regulatory restrictions as private foundations, and they generally don't accept proposals. This makes it difficult to request grants from them if you don't have a personal connection to the donor. But DAF Direct, a new tool you can add to your organization's website, can help you connect with these funds, says Holly Hall ("Tool for Charity Web Sites Makes it Easy to Contribute to Donor-Advised Funds," The Chronicle of Philanthropy, April 25, 2013). With DAF Direct, a potential donor who has established an account with a donor-advised fund can select that fund from a menu and indicate the amount and purpose of the grant they wish to make to you. This information then goes to the donor-advised fund so the grant can be made. Charities are reporting early success with DAF Direct: the donations are larger than the typical credit-card gift - without the credit card fees.
Proposal budgets are crucial to federal grant success
Your proposal budget should not only accurately reflect the costs of the project for which you seek funding; it should also reinforce the arguments you make in the narrative. "Better Grant Budgeting Can Improve Proposal Scores" (Local/State Funding Report, May 16, 2013) offers these tips:
• Make sure the proposal budget and narrative agree.
• Present the budget using the federal spending categories in the program under which you are applying.
• Clearly explain how you arrived at the cost estimates.
• Submit a budget that is adequate to actually carry out the project if the grant is awarded rather than one that is set low to be more competitive.
• Include an explanatory budget narrative in the proposal.
After making a grant, some federal funders require progress reports (for example, the Tracking Accountability in the Government Services Grants System of the Department of Health and Human Services) that include financial information. You may be also required to post financial data on such federal websites as USASpending.gov, Recovery.gov, paymentaccuracy.gov, federalreporting.gov, harvester.census.gov/sac, etc.
Foundations still tying grantees up in red tape
By requiring far more information than the size of a grant may justify and demanding data for which they have no need, foundations are continuing to place undue burdens on their grantees, according to Project Streamline, a collaborative effort that represents both grantmakers and fundraisers. In "Applying for Grants Is Still a Burden, say Fundraisers," (The Chronicle of Philanthropy, May 23, 2013), Caroline Preston summarizes the findings of Project Streamline's survey of 460 grantmakers and 300 grantseekers:
• Although most funders think they have made applications for small grants easier, 72% of grantseekers think what is required is inappropriate for the amounts granted.
• 80% of grantmakers say they ask only for necessary information, but 84% of grantseekers say very few funders accept common grant application forms and 62% don't allow charities to submit standard annual reports.
• 91% of the funders surveyed said they accept proposals electronically, but many grantseekers find the online systems difficult to use.
• Grantseekers object to having to submit financial information in the specific format required by a funder rather than being able to use the budgets and financial reports their organizations have already developed.
• Grantseekers say they have a hard time getting the clear guidance they want from foundations, but 91% of grantmakers think that their communication systems work well.
• 54% of grantmakers have no plans to seek advice from grantseekers, and 41% of grantees have never been asked for their advice.
Creating persuasive proposals
To make a convincing request for funding, you need to understand what the grantmaker bases its decisions on. In "What They Don't Tell You" (CharityChannel, April 24 and May 17, 2013), Joanne Oppelt suggests how to present the most effective arguments to different kinds of funders.
• Make sure your proposal is internally consistent so that the methods described match the budget, the proposal narrative matches the budget, and the outcomes relate to the needs described.
• Have proposal goals that are consistent with the foundation's goals, and describe outcomes not processes.
• Try to follow the approach the foundation uses to address issues.
• Use the type of language that professionals in your project area commonly use.
• Refer to credible sources of research to establish the need and the methods you will use to address that need.
• Always follow the proposal guidelines established by the funder.
• Establish a relationship with the foundation program officer if possible.
• Show that your organization has a reputation, in the community, for accomplishing its goals.
• Be able to describe your competition and your ability to work in partnership with other groups.
• Make your initial presentation to the corporation in just a few pages, using mostly pictures, charts and graphs to illustrate your organization and its work.
• Get the attention of corporate leaders by participating in events that they attend.
• Learn about the culture of the corporation before you approach them.
• Be persistent without being a nuisance - it may take some time before you make the right connection.
For government funders:
• If the decision-makers are elected officials, learn as much as possible about what they see as the needs of the constituency that elects them.
• Be able to show that your programs benefit that constituency.
• Regularly provide information about your organization to the elected officials and their staff, and invite them to your events.
Corporate grants: Clean enough?
Corporations have been making charitable donations since the late 19th century. In those early years, most giving was to projects that would provide "direct benefit" to the company or its employees. Gradually, corporations began to expand their philanthropies to include organizations doing good work for the society as a whole. This evolution triggered heated debates within corporations about whether or not they could give away shareholders' money. One such debate resulted in a landmark court case: In A.P. Smith Mfg. Co. v Barlow (1953), the New Jersey Supreme Court ruled that "corporate gift-giving increases the goodwill of the corporation, and public policy should be to encourage corporations to provide to charities in the same manner as individuals are encouraged to give."
Since the A.P. Smith decision, which settled the legality of corporate giving, the debate has shifted to whether or not a nonprofit doing "good work" ought to take the money. Many in the nonprofit world are ready to indict corporations for most of society's troubles. Corporations, they say, are the "bad guys." And yet:
• Electronic Arts, the giant video game publisher, has been voted the worst company in America by The Consumerist. But EA has been out front in its support of LGBT themes and content and has taken heat for its progressive stance from the Christian right.
• The Hershey Company was named one of the eight worst companies to work for by the online publication viewmixed. But in November 2012, Hershey was named one of America's top 50 most civic-minded firms in The Civic 50 survey.
• The Southern Company was rated the nation's "most irresponsible utility" by Green America in 2011. But over the past few years, Southern has donated more than $1.4 million for projects to restore wetlands, carry out coastal preservation, and clean streams.
It's not easy to make durable, inflexible judgments about the right-or-wrong of corporate giving. "Bad guys" often do good things with their money. And corporate "good guys," despite their reputations, sometimes dirty their hands - as in Ben & Jerry's dubious use of the term "all-natural," and the Humane Society of the United States's revelations about egg-farming conditions at environmental-award-winning Kreider Farms. When a grantseeking nonprofit is evaluating a potential relationship with a corporate donor, black-and-white thinking isn't much help.
Instead, here are some questions the nonprofit can ask:
• Is the company's basic business in harmony with our values? There's probably not much debate about charitable gifts from Sturm, Ruger & Co. or Smith & Wesson, and the NRA got there ahead of you anyhow. If massive military contracting is antithetical to your values, you won't be turning to Lockheed Martin or Northrup Grumman. These are obvious examples, but they put the issue in focus. Grantseekers need to look closely at the alignment between a corporation's core businesses and the values that animate and drive the nonprofit.
• The second question holds a mirror up to the nonprofit. Is our plan for using the money consistent with our mission and programs, or are we just hunting for big bucks? Sometimes a corporation's "bold new funding initiative" seduces a nonprofit into putting on a mask and pretending to be what it is not, to do what it does not actually do. An agency dedicated to youth programming, for example, probably should think twice about chasing a grant for senior services.
• The third question is one of degree. If a company has been guilty of environmental, employee, or market abuses, is it getting better? Are improvements being made? Avon Products, recognizing its impact on forests, its carbon footprint, and the effect of palm oil plantations on species habitat, has taken steps to reduce its energy demands, increase recycling, and support sustainable practices where it can. That's not everything, but it's a worthwhile beginning. If your nonprofit is troubled by a potential corporate donor's history in an important area of social responsibility, take the initiative. Ask a lot of questions.
• Finally, is a corporate gift likely to enhance or impede your nonprofit's standing in the eyes of important stakeholders? Will some individual donors be turned off? Will your agency's clients be supportive or offended? Some smart nonprofits use a development working group--including senior staff, a board member, a client or two--to hammer out questions like these and make sure the gift is not a problem disguised as a check. If taking the money might cause a rift or a struggle within the organization, maybe you'd better pass.
Corporations exist to maximize shareholder equity. The best of them (and sometimes even the worst of them!) see the importance of strengthening their communities. Nonprofits should resist the supplicant's bended knee and the knee-jerk anti-corporate stance; they have a $15 billion opportunity to make vital and energetic partnerships with companies where the fit is right and the work is worthy.
All grants, including government and foundation grants, come with complications, and nonprofits are vulnerable to subtle influences that can undermine their missions. A stakeholders' group can provide ballast, if you have good people on it, if they deliberate honestly, and if you listen to them. But nonprofits can and should protect their independence by diversifying their funding sources.
Thomas Boyd's 40-year career in nonprofit management and development includes roles as a nonprofit executive, a corporate giving officer, and a consultant trainer for The Grantsmanship Center.
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