I spoke to foundation leaders about how they are responding to the coronavirus situation and how that affects grantees. Here’s what they told me.
At first blush it may seem like everything is topsy-turvy in fundraising, and to a degree, it is. Many nonprofits are reeling and trying as best they can to regain their balance along with rest of us—all while we collectively hold our breath that life will return to normal soon.
But as my colleague, Austin Detwiler, aptly and rightly noted in his recent article on tips for winning grants: the fundamentals of fundraising haven’t changed in the pandemic, even if the circumstances in which we are raising money have changed dramatically. This is particularly the case when it comes to reaching out to grantmaking foundations.
Along these lines, I wanted to pick up two threads Austin left near the end of his article: first, he wrote that “it’s crucial that fundraisers strive to make those conversations [with foundation contacts] effective.” The second thread is that “There are, of course, minor differences for conversations with foundations today,” given what is going on in the world.
If we are going to make our conversations with foundation representatives fruitful, it can be helpful to have a glimpse of what these minor differences may be. If nothing else, it can be helpful to know what foundations are thinking and doing alongside everyone else in the midst of a pandemic.
With so much of the focus on how nonprofits are adjusting to the changing landscape of fundraising during a pandemic, I thought it would be worthwhile to find out how foundations are responding. They are people, too, of course, and knowing how foundations are handling the pandemic both operationally and organizationally may help you navigate with greater confidence the dense fog that has rolled in with the coronavirus pandemic.
To do so, I recently had a few phone conversations with foundation representatives—presidents and vice presidents—to get a better sense of how their institutions are coping with the pandemic and what changes, if any, the present upheaval has brought about in their grant making process. The conversations, while unattributed so foundation representatives could speak frankly about how the virus has affected their assets and funding priorities, were extremely insightful and revealing, making clear that foundations are tussling with the uncertainties of our situation in much the same way as everyone else.
Here are a handful of the takeaways from my conversations with foundation leaders and how they could influence your conversations with foundations today:
- They want to know how you’re doing.
The foundation representatives were genuinely interested in learning how nonprofit organizations are handling the pandemic. “What are you hearing in your conversations with nonprofit leaders,” they asked me. “Are they struggling? Where are they hurting most?”
Each of these foundations is in touch with their grantees and grant applicants, but they understand that nonprofits may be hesitant to reveal the true nature of things, and so instead they project confidence and stability to the foundation because they don’t want to appear as a risky investment. There may be room for vulnerability, and nonprofits may be surprised by the response they get when sharing as much in a call or email.
- Genuine collaboration.
Foundations talk about the value of collaboration and how they desire to partner with other foundations in making an impact—but that usually means one foundation asking another to fund its preferred projects, which no foundation really wants to do. But in response to the coronavirus pandemic, one foundation president said he has never seen a greater willingness among foundations to collaborate. In the opinion of this president, the closer collaboration was likely the result, interestingly enough, of working remotely. The number of excuses for not being able to meet suddenly vanished with emergency orders; suddenly there is much greater interest in speaking by phone or video conference in order to identify areas where they could work together to be most helpful and to do so most quickly.
This increased collaboration may present new opportunities for nonprofits to enter into joint efforts with local foundations that would have seemed onerous or simply unlikely three months ago. At the same time, if foundations are talking more and one foundation’s funding priorities are more closely aligned with your mission than another foundation to which you have applied, there may be a greater possibility that you get funding from one and not both.
- Long-term funding priorities are not likely to change.
As distressing as the coronavirus has been, it too shall pass—and when it does, the established funding priorities of foundations are likely to remain the same. Though I do wonder if there will be a gradual magnification of local and regional giving. More on that point later.
- Not all foundations will be equally affected by the market downturn.
While all foundations are feeling the effects of the economic downturn, not all will be equally beset by losses. The asset allocations of foundations’ corpuses are sometimes markedly different, and while some may be looking at double-digit losses as a percentage of total asset value, others are anticipating losses in the low single digits. Another thing to keep in mind is that some foundations base their annual giving on two-year (or more) rolling averages of assets. In other words, if this year and next year are bad, expect total giving to drop more significantly in year three.
- Existing grantees are likely to get priority over prospective grantees.
A number of foundations have due diligence guidelines that require site visits. From shelter-in-place orders to essential and non-essential declarations, existing grantees have the advantage over prospective grantees because foundations have already conducted site visits. This does not mean that prospective grantees are rejected as a matter of course. You may need to adjust expectations for new foundation revenue—but don’t stop pursuing altogether.
- Anticipate more flexibility in each step of the grant process.
These include a greater openness to converting program grants to general operating grants, temporarily waiving one grant per year rules, extending application deadlines, and delaying or jettisoning reporting guidelines.
- The 5 percent payout is a floor, not a ceiling.
This is not a universal doctrine among foundations, but there is an interest in select foundation circles to give above and beyond the required minimum distribution to provide a surge of aid to nonprofits. There wasn’t a consensus view among the representatives with whom I spoke, but foundations are evidently considering it, and that should come as no surprise.
- And yet, maintaining saving power may play a leading role in funding decisions as the downturn gets worse and the uncertainty longer.
If it looks like the economic downturn will extend for many more months or the economic waters remain murky, foundations may pull back on giving slightly in the interim in order still to be available to help nonprofits when the dust settles. There are obvious drawbacks for nonprofits, but this merely appears to be an ongoing discussion at foundations, not settled fact.
One of the foundation representatives with whom I spoke presides over a grantmaking foundation that will sunset in the coming years. They have no need to preserve their assets for eternity and no motivation to contract how much they typically disperse.
- A recognition of their smallness.
If there were ever a time for a foundation to realize it may not be able to solve all the world’s problems, that time is now. One of the many hidden blessings of the pandemic may be a greater recognition of our sheer smallness, as if the horizons of globalism have been erased in favor of the beauty of our backyards as seen from our kitchen sink windows. It is a childishness and simplicity in all the best ways. Foundations, even ones focused locally or regionally, realize they are simply too small to affect the whole world, even the whole city, in the midst of a pandemic, but they can help this organization a few blocks away or that one that they have been supporting for nearly a decade. And even these investments today feel like they’re saving someone’s world.