Blog post by Amy Jackson, NC Regional Representative. Amy lives in Indian Trail, NC and is assistant vice president of foundation relations and development at Wingate University. She previously worked as grants manager for the Charlotte Symphony and has 8 years of fundraising experience, primarily in the areas of grants management and grant writing, prospect research and prospect management, campaign planning, and donor relations.
Prospect Research plays an important role in the success of nonprofit organizations. While the bulk of philanthropic dollars received each year comes from individuals and continues to rise, we are also seeing an increase in the second largest category, giving by foundations. According to the annual report from Giving USA, giving by Foundations in 2020 was $88.5 billion, accounting for 19% of all contributions that year and increasing 17% over 2019.
Support from foundations serves as a key source of revenue for many nonprofits as they seek to carry out their missions, and private foundations must pay out at least 5 percent of their assets each year in the form of grants and operating charitable activities. So, where do you start with foundation research and what tools are available to help in your efforts?
Foundation Research Tools
Candid, formerly Foundation Center and GuideStar, is a wonderful resource and it’s free to use. My favorite things to access via Candid are GuideStar and Foundation Directory Online (FDO). Candid also has some great e-newsletters delivered straight to your inbox to keep you up to date on subject-based philanthropy, links to resources, and funding alerts. GuideStar houses information about every IRS-registered nonprofit organization, including the three most recent 990s. While FDO Pro is a paid tool, many public libraries offer free access to the database. FDO Pro features 140,000+ grantmakers and 11 million+ grants, and it is updated weekly. I would recommend that you watch this free 1-hour tutorial first, and then bring a flash drive with you so you can download search results and profiles for more in-depth research once you are back at your desk. Search here for a library that has FDO Pro near you. FoundationSearch is another database option if you have the budget funds to add it to your shop. Relationship Science (RelSci) (relationship mapping to find board member connections) and iWave (one-stop-shop for prospect research and donor wealth screening), other paid tools, can support your foundation research efforts, too.
When I’m in FDO Pro or FoundationSearch, I like to narrow my search by looking at foundations with the largest assets, a geographic scope that corresponds with where my organization is located, and a granting category that fits my type of organization. I don’t always exclude foundations that don’t accept unsolicited proposals, because you may be able to connect with those folks in another way. Perhaps you have a board member or individual donor that knows one of their board members or staff members. Another tip is to search for organizations with similar missions to yours to see which foundations are giving to them. Maybe they would be interested in giving to you as well.
Three additional sites related to foundation research are The Grantsmanship Center, NC Network of Grantmakers, and South Carolina Grantmakers Network. The Grantsmanship Center provides training, publications, technical assistance, and consulting for nonprofits in addition to resources by state, including top giving foundations, community foundations, and corporate giving programs. NC Network of Grantmakers and South Carolina Grantmakers Network serve grantmaking organizations across their respective states. Their news pages are particularly useful for information about staff changes at foundations, grant awards, requests for proposals, and more.
Digging into 990s
Foundations are required to submit a Form 990 to the IRS each year. This form contains a slew of helpful information for research purposes. For foundation research, here’s what I look at:
- Right above the Name of foundation line at the top, the form identifies the foundation’s fiscal year. This is good to know for timing of application purposes and strategy.
- Next to the name, you can also verify that you have the correct address and grab a phone number if you don’t already have one. Foundations include this information on their website, but there are still a lot of foundations out there without a website.
- Line I lists the fair market value of the assets. The larger the assets, the more the foundation has to give out to nonprofits each year.
- Part 1, Line 25 will tell you how much they paid out in grants that year.
- Skip down to Part VIII for the list of Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractors.
- Part VX, 1 & 2 is important as well since it gives information about foundation managers and grant applications. There’s a check box that lets you know whether or not they accept unsolicited requests as well as the contact person for applications, the format in which applications should be received, submission deadlines, and any restrictions or limitations on grant awards. *Note: If the foundation has a website, there may be more specific, up to date information located there.
- Last but not least, Part VX, 3 lists out grants and contributions paid during the year or approved for future payment (multi-year pledges). Here’s where you’ll see who they’re funding, for what purpose, and at what amount. This is key in determining what projects they might fund at your organization and the ideal ask range.
Foundation Profiles
You’ve done your research and now it’s time to put together a profile. I’ve found the following template to be most effective when sharing prep information with gift officers and/or senior leadership.
- Foundation name and contact information (address, phone number, website)
- Foundation Overview (background, mission, vision, etc.; if it’s a corporate foundation, I also include a company overview)
- Foundation Funding Priorities (areas of focus/grant programs, eligibility guidelines, application timing, etc.)
- Staff and Board list (with titles, brief bios, connections to your organization, and photos, if available)
- Giving History for Your Organization
- Financial/Grant Information (Total assets, total # and amount of grants awarded, list of grants from the most recent fiscal year)
- Relevant action/contact reports from Advancement CRM and other related notes regarding the foundation and your organization, including most recent ask details, if applicable
- Recent articles about the foundation or key staff/board members
Happy foundation prospecting!
