Debunking Common Myths About Foundation Funding

The search for foundation funding is crucial to support the mission of most nonprofits. However, many grant seekers frequently become discouraged and frustrated—typically, because they have bought into one of the common myths about foundation funding.

Myth 1 – Funders are clear about what they want to fund.

Truth: Because funders have the money, they are always in control. Foundations are one entity in the US which have relatively little accountability. Although the IRS requires an annual distribution of foundation funds, foundations are not required to report about that their funding decisions aligned with their missions. Thus, foundation leaders can decide to fund any organization they want. However, most foundations are required to ensure grants are awarded to nonprofit organizations.

Myth 2 – When applying for a grant, do your best to conceal your weaknesses.

Truth: Be honest when applying for grant funds. Most funders understand that organizations have struggles and areas of weakness. Obviously, you want to focus on the things your organization does well; according to foundation officers, emphasize the dependability of your organization. In other words, demonstrate that your organization can be counted on to do what it says it is going to do. Prove to the funder that your organization has staying power. A big concern of funders is nonprofits facing financial challenges and closing their doors; it is your job to prove that your organization can survive.

Myth 3 – Funders don’t read grant reports.

Truth: Do not be mistaken! Grant funders actually do read the reports they receive. Typically, program officers read grant reports and compile them into a report that is submitted to the foundation’s board of directors.  A grant report is your opportunity to shine and share with the funder how their funding made a difference in the lives of those you serve. Also, if something did not go as planned in your implementation, be honest and share that information as well. Foundations recognize that innovation sometimes means projects are not successful. When sharing aspects of your project that did not go as planned or as hoped, be sure to share the takeaways and how the information will be used to strengthen the work of the organization going forward.

Myth 4 – Always embellish and stretch, especially in the budget.

Truth: While funders may not know the exact costs to implement and operate a program, they have a general idea. Remember, they see hundreds of proposals and budgets. Funders would prefer that you request what you need, but don’t stretch the budget or the program’s reach. The dishonesty will be discovered in your grant reporting and will likely count against your chances of repeat funding.

Although foundations may not be clear in their funding priorities or understand all the challenges nonprofits face, your proposal should be honest and present the organization in the best light.

Next time you begin applying to a foundation, remember these four myths and the corresponding truth. If your board is frustrated with the foundation funding process too, it may be helpful to make sure they understand the myths as well.

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