One of the most asked questions from nonprofit and ministry leaders is “how can I find the right funders for my organization?” Understanding the ins and outs of funding opportunities is essential to finding the right funder for the work of the organization.
Before working to identify funders, it is often helpful to begin by asking the question, “What do we need funds for?” Far too often, the response to this question is “we just need money, we need money for everything.” But, until you get specific about the needs the organization has, it is difficult to focus on and target specific funders. Ask the board of directors and organization leadership, “what do we need funds for?”
Once you know what you need funds for, you can begin to identify potential funding sources. Start locally…in your own community. Foundations in your local community have often been established by individuals who live in your community and have a vested interest in making the community stronger and a better place to live. Inevitably, a board member or some well-meaning person will make the suggestion to apply to one of the large national foundations; before doing so, I would encourage you to build a track record and work with local funders.
During the identification process, look for philanthropic foundations (family foundations), community foundations and corporate foundations.
Family Foundations are foundations that have been established by a family that wants to contribute to society by giving back. Typically, a family foundation will determine the areas of focus that they wish to support. However, it is important to know that foundations can give money to organizations that do not “fit” with their stated purpose. To meet IRS requirements, the requirement is that the foundation give to 501(c)(3) nonprofit organizations.
Community Foundations have been established to serve a specific community or geographic location. Community foundations are supported by individuals in the community who do not want to start their own foundation but are interested in bettering their local community. Some community foundations have scheduled times when they accept proposals for specific community needs. Check to see if your community has a local foundation.
Corporate Foundations are established by corporations and large businesses as a way of “sharing the wealth” made by the corporation. When researching corporate foundations, there are a couple of things to remember. First, the ultimate goal of corporations and businesses is to make money…they are not giving out of the goodness of their hearts. Instead, they recognized that philanthropy is good for business. When a corporation supports organizations in their local community, they are making the community a better place for their employees to live and work; research shows that when employees are happy, they are better employees and thus help the company to make more money. So, corporate foundations usually fund organizations where they have a business presence and usually fund “safe” projects. It will be rare for a corporate foundation to fund a controversial issue or organization; instead they tend to fund more neutral projects and organizations.
After identifying foundations in your local community, begin to build a relationship with them. Think of the relationship building process as a process akin to dating. Few of us would ever ask someone to marry us on the first day; instead, we take time to get to know the person we are dating. Use this same approach when working with funders. Get to know them and what they are interested in before asking them for money.
Interested in learning the specifics about all types of potential funders? Attend “It’s a Match,” an online training to be held on November 15th at 1 pm ET. Register here.