We are often dazzled by the "name-brand" foundations such as the Gates, Rockefeller, and Ford Foundations, whose assets run into the billions.
But, according to research cited by the Stanford Social Innovation Review, 90 percent of foundations have endowments of less than $10 million, and these are mostly small family foundations.
That research also found that even though we often think small family foundations are relics of old money, many of these family foundations have been set up in recent years. Their founders are younger and more in tune with current charitable trends than ever before. They want to make a difference within their lifetimes.
Additionally, small foundations often pay out more than the required 5 percent of assets per year. In short, despite stereotypes, small family foundations, many of which can be found in your local area, are younger, more generous, and more accessible for small charities to approach.
A survey of family foundations served by Foundation Source provided insight into how to approach these small foundations for grants. Here are some of the recommendations.
Rethink the Way Your Nonprofit Finds Foundations.
These smaller family foundations may not be professionally staffed, and they often keep a low profile. They tend to fund locally. They may not belong to associations of funders or attend annual conferences.
You won't find their requests for proposals (RFPs) on the usual lists from publications or online sources. They give funds to nonprofits with which they are personally acquainted. Many do not even consider unsolicited requests.
You will find them by being well connected to your community and alert to who's funding whom in your area.
Reach These Foundations Through the Personal Contacts of Your Organization's Board Members.
Provide ways for family funders to get to know your work through low-pressure opportunities and their peers.
Use peer-to-peer contacts to find and cultivate members of the family involved in a family foundation.
In the survey mentioned above, 58 percent of the foundation respondents said that it was essential that "someone I know and respect is closely involved or has asked me to support the project."
When Applying to a Small Foundation, Try Sending a Short Letter of Inquiry.
Most small foundations do not want or need a big proposal package. An LOI (Letter of Inquiry) will work much better. Some 80 percent of the foundations surveyed said that they preferred to receive a "poorly written request that represented the real words of the applicant" to an elegantly crafted proposal written by a professional grant writer.
The key is to be direct and honest. Trust the foundation to ask for more details once it is interested in your project.
Small family foundations prefer to partner. They want the organization to invest its funds in the proposed project and are happy to see other funders involved.
They also appreciate an "exit" strategy to make sure that the nonprofit does not become dependent. Small foundations are not adverse, however, to providing general operating funds, something larger foundations are reluctant to do.
Check Out How the Foundation Prefers to be Contacted and Tailor Your Request to the Foundation's Interests.
Most of the small foundations surveyed preferred to be contacted by email rather than mail or personal visits.
Furthermore, they say that it is of utmost importance that the proposed project falls within the foundation's priorities and guidelines. They expect the nonprofit to have done its homework before making a request.
Check out the foundation's website and/or look up the foundation's 990s from a source such as GuideStar. Small family foundations also don't like generic proposals that are sent to several foundations, and they prefer that the proposal address one specific project that fits them well.
Be Realistic About Your Project.
Small funders typically are skeptical of hyperbole and overreaching goals by nonprofits. Aim to be clear, concrete, and directly address risks and challenges. Describe your niche...how does your work differ from the work done by similar organizations?
Don't Expect Quick Results from Funding Requests from Small Family Foundations.
These are part-time philanthropists, and they don't usually have a professional staff or three or four funding cycles. Be patient and work with the family's schedule and needs.