UNDERSTANDING FOUNDATIONS
The
United States now has over 38,000 active grant-making foundations with
aggregated assets exceeding $189 billion.
Over 95% of this philanthropic wealth is concentrated in
approximately 6,600 foundations. The nation’s grantmaking foundations
donated $11.3 billion in grants in 1994, up 1.6% from 1993.
Thus in real terms funding fell behind inflation for the first
time since 1983. Foundation
funding remained ahead of individual and direct corporate giving which
has remained flat for more than five years (Foundation Giving, 1996).
By
knowing the major patterns of giving in large foundations, you will be
better able to predict the probability of receiving funds for your
project. The “Foundation
Grants Index” (The Foundation Center, 1996) outlines large
foundations’ trends in giving. Welfare,
education and health related issues received over two-thirds of all
private foundation funds in 1995.
In
terms of grant recipients, educational institutions received the largest
share (29%) of support from large foundations, while health related
programs, which fell from 18% to 15%, received the second largest share
in 1995. Arts, culture, and
humanities benefited from the year’s largest grants, receiving 13% of
all private foundation giving. Human services accounted for 12% of total
grant dollars in 1995. The
chart below presents these figures for 1995.
Source: Foundation Giving, 1995,
5th Edition
Although
the vast majority of foundations are private philanthropic
organizations, corporate and community foundations should not be
overlooked as potential sources of funds. The table below presents an
overview of foundations across the country.
Foundation
Type and Grants Awarded: 1993
(dollar
figures in millions)
| |
Total Number |
Total Grants |
Total Assets |
| All Foundations |
38,807 |
$11,291 |
$195,792 |
| Independent |
34,319 |
$8,840 |
$167,230 |
| Corporate |
1,951 |
$1,626 |
$7,256 |
| Community |
403 |
$653 |
$10,071 |
Source: Foundation Giving, 1996,
6th Edition
FOUNDATIONS IN PENNSYLVANIA
Pennsylvania
lies in the heart of the “foundation belt”, those six states between
New York and Washington D.C. where approximately 40% of the nation’s
philanthropic wealth is located. In
1993 Pennsylvania foundations held $11.8 billion in assets. Of all
Pennsylvania foundations, the largest 100 account for 90% of the
state’s foundation wealth. In
fact, the top dozen foundation account for nearly 70% of all these
assets. At the other end of
the spectrum, smaller foundations, those with assets under $7.5 million,
account for nine out of ten foundations, yet only 10% of the wealth. Not
surprisingly, most of Pennsylvania’s foundations are concentrated in
the urbanized and industrialized Southwestern and Southeastern regions.
Together these regions account for 92.8% of the state’s
foundations assets even though only 57% of the state’s population live
in those 20 counties (Directory of Pennsylvania Foundations, Fourth
Edition, 1990).
A
serious grant seeker in Pennsylvania should become acquainted with
“The Directory of Pennsylvania Foundations, 4th Edition” available
at any of the five libraries listed on page 8 or from the publisher (see
bibliographies).
CORPORATE GIVING
Corporate
giving is also an important source of funds.
While tax advantages provide an inducement to giving, many
companies believe it is in their best interest to support the
communities where their employees live and where their plants or
businesses are located. Corporate
responsibility and public image are two reasons companies cite for
giving to non-profit organizations.
Approximately
22 percent of corporations have set up company-sponsored foundations,
which are legally independent entities whose purpose is to make and
administer grants. Most of
the other corporations have direct giving or contribution programs which
are administered within the corporation itself.
It appears that company-sponsored foundations are less subject to
the upheavals of the profit cycle because in times of higher profits,
companies may use their foundations to set aside funds that can be used
to support their giving during years of lower profits (Corporate
Foundation Profiles, 1985).
In
addition to grants, companies often will give non-cash contributions to
support local programs. These gifts may include services like
accounting, advertising, printing, legal advice, loans, co-op
purchasing, contract review or graphics.
Sometimes non-profit organizations will look for corporate help
with volunteers, transportation, space, computer use, special equipment
or office supplies. It is
important not to overlook these types of contributions when approaching
corporations.
Because
corporations are interested in their public image, they often limit
their giving to areas in which their headquarters or main branches are
located. For this reason,
non-profit organizations should focus their attention on local
corporations.
INVESTIGATING PUBLIC SOURCES OF ASSISTANCE
Despite
the decrease in federal funding of non-profit organizations since the
early 1980s, federal assistance is still the largest source of support
for local governments and many community-based programs. This assistance
comes in the form of formula and project grants, direct payments, loans,
training, technical information and specialized services.
As noted earlier, acquiring funds from public sources
generally involves responding to a Request for Proposals (RFP).
While the process for responding to a RFP frequently involves
agency, program, and project specific criteria, it is worth noting that
many of the guidelines provided on the following pages can be useful for
generating ideas, formulating your plans, and writing your proposal.
It
is important to know that the majority of federal money goes to transfer
or subsidy payments. Because comparatively little is currently spent to
support small innovative projects, this is the area where private giving
often is a good source of funds.
Now
that you have a snapshot of where the money is, it is time to begin a
concerted effort to seek out the most appropriate sources.
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