Transcript Document

Trends Affecting Grantwriting
Background
Is it “The Economy, Stupid?”
The Financial Market’s “Wiley Coyote” Moment.
Qu i c k T i m e ™ a n d a
d e c o m p re s s o r
a re n e e d e d to s e e th i s p i c t u re .
The worst stock market crash since the Great Depression. The dotcom crash of 2000-2002 lost 4,244 points
over 2 1/2 years. This one lost 7,427 points in 1 1/2 years, to less than half of its peak value.
Many foundations lost 40% of their assets on paper (although they’ve recovered somewhat).
QuickTime™ and a
decompressor
are needed to see this picture.
In addition to stocks, the over-inflated housing market and its drop caused many people losses
to their biggest asset.
This recession is different than other recent ones.
Qu i c k T i m e ™ a n d a
d e c o m p re s s o r
a re n e e d e d to s e e th i s p i c t u re .
Recession officially began December, 2007. So 12 months is Dec, 08 and 24 months is Dec, 09.
States are facing large budget shortfalls
CNBC says Oregon is the 14th worst off in 2010,
with a $1.6 billion budget gap, 18% of general fund.
Total Private Giving to Nonprofits is Down.
Current dollar giving has only gone down two times: 1987 & 2009.
(Some say this Giving USA study is too rosy, many nonprofits giving is lower)
Stimulus Funding
The American Recovery and Reinvestment Act (ARRA) of
2009, aka Federal Stimulus, injected $747 billion into the
US Economy.
•
Most went directly to States or individuals, but billions
also went into Federal agencies to be released as grants.
•
One time funding to be used (in most cases) by the end of
2010 - but RFP’s are still coming out of the agencies. Look
at agency websites, not for stimulus websites.
•
A New Economic Environment?
Richard F lorida and some other economists say that this is more than a recession, itÕsa Reset.
The economy is u ndergoing fundamental change and the jobs that come back wonÕtbe
the jo bs that were lost. Oregon economist Joe Cortright says that ÒRecoveryÓis a
misno mer and calls it Òout of sampleÓ for forecasting, meaning that we canÕtuse past
experience to predic t the future . This has multi ple causes: Technology, globalizati on, the
Internet, world wide immigration, internat ional cap ital flo ws, etc.
What does this mean for grants?
How are Foundations Doing?
BUT foundation giving grew five-fold from $9.2 billion to $46.8 billion in 17 years from 1991
to 2008. The Foundation Center predicts 2010 to be flat and 2011 to show modest growth.
Foundation giving closely tracks assets, so assets have grown equivalent amounts.
The number of foundations has skyrocketed, more than tripling since 1980.
Growth in Foundations
Foundation growth is driven by demographics and economics, and shows no signs of
declining in the near future. At least four things are happening:
• Rich people are dieing and creating or enlarging foundations in their wills.
• Rich people are aging and creating or enlarging foundations as part of their estate
planning.
• Newly rich people are creating foundations (the most famous being the Bill &
Melinda Gates Foundation, the world’s largest).
• The stock market went berserk in the 1990’s, with the Dow Jones Industrial
Average more than tripling in value from about 3,300 to over 11,000. Because most
foundations are invested in stock markets, this increased the assets of existing
foundations.
•While the stock market has been fluctuating wildly, over the long haul it will
probably continue to trend up…how fast depending on the reset in the global
economy.
Growth of Oregon Foundations
O REGO N FO UNDATIO NS
1981
1989
1999
Meyer Memorial T rust
120,000,000
M. J. Murdock Charitable T rust 113,035,782
Ford Family Foundation
2,580,985
Oregon Communit y Foundation 11,847,769
T he Collins Foundation
31,535,763
Maybelle Clark Macdonald Fund
Ann & Bill Swindells T rust
Intel Foundation
P amplin Foundation
138,917
Northwest Healt h Foundation
James F. Miller Foundation
Schnit zer CARE Foundation
Knight Foundation
Jeld-Wen Foundation
1,754,024
P acificorp Foundation for Learning
Juan Young T rust
T OT AL ASSET S
280,893,240
5% of total : required grants
14,044,662
Dow Jones Industrial Average
880
276,841,051
220,760,817
3,168,481
66,400,000
89,801,832
454,147,345
360,998,408
279,012,032
217,753,847
168,570,667
1,782,687
W ash in gton Fou n dation s
Gates Foundation
Allen Foundations
Bullit t Foundation
2,000,000
2008
2010 e st
656,972,181 1,772,911,796
32,848,609
88,645,590
2,753
11,497
680,458,704
468,700,000
949,645,467
665,851,000
682,982,000
564,000,000
1,157,146,000
887,351,000
209,689,000
142,000,000
135,598,000
109,000,000
119,276,000
74,500,000
73,815,000
60,489,000
37,766,000
33,331,000
67,000,000
52,163,000
203,011,000
134,690,000
65,238,000
46,996,000
110,394,000
90,073,000
66,538,000
53,531,000
46,901,000
32,901,000
26,703,000
18,756,000
4,632,161,171 3,434,332,000
231,608,059
171,716,600
13,365
8,776
539,005,000
765,728,650
648,600,000
1,020,453,650
163,300,000
125,350,000
85,675,000
69,562,350
38,330,650
59,987,450
154,893,500
54,045,400
103,583,950
61,560,650
37,836,150
21,569,400
3,949,481,800
197,474,090
10,000
296,602,031
17,352,880
100,239,862
38,837,000,000 29,887,000,000
1,503,812
920,547
127,217,000
90,442,000
34,370,050,000
???
104,008,300
?
?
4,711,405
34,648,095
25,942,116
58,814,992
56,982,891
41,206,291
30,566,158
42,486,267
2007
On The Other Hand
Grants Trends of the 21st Century
Foundation Behavior in 2010
After the 2000 dot-com crash and the 2008 financial meltdown, foundations are being more
cautious. Even if their endowments are doing better, they’re not sure that they can count on
it in the future.
• Many are focusing on strengthening established organizations they’ve funded before,
especially shoring up ones that were hurt by the downturn. Some are making
“operating funds” grants to these groups for at least a limited time.
• A hard time for startups.
• There was a move towards basic needs, funding groups that help people impacted by
unemployment and poverty -- food banks, shelters, low income housing, etc.
• A hard time for arts organizations.
• There’s been an acceleration of the trend to look beyond the project to the strength of
the applicant. Can you show a strong financial statement, diversified funding? Can you
demonstrate program success with data, stories, testimonials?
• Again, this favors established organizations.
• Foundations that cut staff during the downturn are looking for nonprofits to operate
leaner too.
• Don’t want to fund “business as usual”
ThereÕ
s more competition for grants
 In 1992 there were 516,000 nonprofits; Today there are over 1,200,000. About 25% have
inco me over $500,000, with the abili ty to apply for and receive large grants .
 Local governments are increasingl y seeking private funding and are starting to succeed.
Some are forming parallel 501(c)(3) organizat ions to raise money for popular services.
(The Schools Foundation, The Parks Foundation, The Zoo Foundation).
 As state & local government funding for social services declines, nonprofits which
previously relied mostly on government contracts are seeking private funding, including
grants. ThereÕsalso a trend for these agencies to start seeking federal grants.
Growth of nonprofits since 2000 (from Giving USA).
Funders are looking for, and receiving, better proposals
 Partly as a result of the increased competiti on, the quali ty of grant submissi ons is
improving. IÕve been told this by foundation staff as well as my own observations.
 Both public and private funders are lo oking for measurable results , better client
outcomes and lasti ng change. Reporting numbers of people served is no longer
enough.
 Government and some private funders are starting to require Òevidence-basedÓ or
Òbest practicesÓ, literature reviews, logic models for Òoutcome-based evaluat ionÓ.
 The importance of relat ionships with foundations is increasin g. Like major donors,
this has to be built o ver time, and relationsh ips need to be between organizat ions,
not just individuals .
The Internet is having a huge impact in every aspect of grants
Online funder searches:
 Foundation Directory Online http://foundationcenter.org/findfunders/fundingsources/fdo.html
 GrantStation http://www.grantstation.com/
Online 990 searches:
 GuideStar http://www2.guidestar.org/
 Foundation Center http://foundationcenter.org/findfunders/990finder/
 The Web is replacing the library for all kinds of research -- demographics, community need.
 The Federal Government posts RFPÕs on grants.gov, and most agency websites are very good. States
and local governments are following this trend, with mixed results.
 The Feds and larger foundations are going to online applications. Nobo dy has it right yet.
 Most large foundations have good web pages and are posting their guidelines, application forms and
annual reports (that they used to print) online as downloadable pdfÕs.
 Proposal drafts are traded back and forth between grantwriter and program staff as e-mail attachments.
 There are good online reading sources: The Foundation Center http://fdncenter.org/, Charity ChannelÕs
Grants and Foundation Review http://charitychannel.com, The Chronicle of Philanthropy
http://philanthropy.com/section/Home/172 and The Grantsmanship Center magazine archives
https://www.tgci.com/magazine.shtml
The grant s world is getting more organized
Grantmakers for Effective Organizations: A group of foundations dedicate d to improving
the organizati onal stabilit y of the nonprofits they fund. http:// www.geofunders.org/home.aspx
Project Streamline: A cooperative effort of major foundations and nonprofit organizat ions to
reduce bureaucratic re quire ments on grant seekers.
http:// www.projectstreamline.org /project-streamline
Glass Pockets: A project of the Foundation Center to increase funder transparenc y.
http:// www.glasspockets.org/
AAGP, GPCI, NG MA: Grantwriti ng and management is becoming a professio n with its own
membership associations & credentials.
 American Association of Grant Professionals http:// grantprofessio nals.or g/
 Grant Professionals Certificati on Instit ute http://grantcrede ntial.o rg/
 National Grant Managers Associatio n http:// www.ngma-grants.org/
Non-Grant Issues
Affecting Grantwriters
Threats to Tax Exempt Status
1) Expired state corporate status
Is your organization keeping its Incorporation papers current with your state?
 There are usually some forms to file on a regular basis, sometimes with more than one agency.
 Failure to stay current can result in the organizationÕscorporate status being revoked.
 In Oregon: Form CT-12 with Dept of Justice, Annual Report to Corporation Division.
If your corporate status expires, so does your tax exemption!
 States are posting their databases of corporate statuses on their Web sites.
 The IRS is starting to mine these public databases, looking for expired corporations.
2) Tipping (into private foundation status)
¥ Too much of your funding comes from too few sources (disqualified persons)
A really large gift or grant can ÒtipÓ youinto private foundation status. Check with your accountant.
3. Very small nonprofits are now required to file Form 990-N (an e-postcard)
Previously didnÕthave to file if income was under $25,000 year.
¥ For more information go to: http://www.irs.gov/charities/article/0,,id=169250,00.html
Up to 400,000 nonprofits are at risk of losing their tax exemption in 2010.
The IRS has promised leniency, but the law requires them to cut groups that donÕt file 990Õsfor 3 years.
4. Expired IRS advance ruling letter
 No longer required to file for permanent status, new applications automatically get public charity
status.
 BUT if a letter expired before 6/9/2008, need to appeal. Talk to a tax lawyer.
Changes in the 990
The IRS form 990 that nonprofits are required to file has become more important. It used to be obscure
and finance-oriented. Now itÕswell known and is also a legal and marketing document.
Every nonprofitÕs990 is freely available, and foundations and large donors are looking at them.
 GuideStar http://www2.guidestar.org/
 Foundation Center http://foundationcenter.org/findfunders/990finder/
The federal government got involved in corporate oversight as a result of the Enron scandal (SarbanesOxley Act of 2002). The IRS is the mechanism for oversight of nonprofits.
 The 990 now has a governance section. You need to have a lawyer look over your filing.
 The new 990 gives more attention to your mission and charitable activities. Because foundations and
donors are looking at it, it becomes a marketing and public relations document.
 Grantwriters need to be aware of whatÕsin their agencyÕs990, because foundations are asking for
and looking at them.
Old 990
New 990
Old 990
New 990