Category Archives: Foundations

NYT: Nonprofits should focus on grant writing, not donations, during the COVID-19 crisis

We’ve written two recent posts on the impact of COVID-19 on nonprofits, “COVID-19, donations, and foundation and government grant proposals” and “Less obvious things that impact human services during the coronavirus pandemic.” During an economic crisis like this one, most nonprofits will probably be gob-smacked with cash flow problems, while demand for services, particularly among human services provides, skyrockets.* Since thousands of businesses are suddenly closed, millions are unemployed, and the stock market is gyrating downward, seeking donations is mostly a waste of time and it’s not possible to hold galas and fundraisers. To avoid organizational disaster, the only option for most nonprofits is to immediately conduct grant source research and start submitting foundation and government grant proposals. If the nonprofit lacks internal capacity to do this, hire a consultant like Seliger + Associates.

A recent New York Times David Streitfeld article confirms this, “A New Mission for Nonprofits During the Outbreak: Survival.” Although Streitfeld incorrectly conflates donations and grants, the articles reaffirms what we said in our posts—foundations react to economic crises, at least in the short term, by vastly increasing their grant making:

Foundations, traditionally not among the spryest of organizations, learned from 9/11 and severe hurricanes that they could move fast. They are quickly retooling to disburse emergency money and relax reporting requirements that are suddenly impossible to meet. Bloomberg Philanthropies, Carnegie Corporation of New York, the Doris Duke Charitable Foundation and 23 other foundations as well as individual donors have created a $78 million Covid-19 rescue fund for New York City nonprofits. Grants will start going out to small and midsize social services and arts and cultural organizations on Monday. Interest-free loans will follow.

In hard-hit Seattle, the Seattle Foundation is administering a $14.3 million emergency program funded by local businesses, foundations and government. It released more than $10 million to 120 organizations this week.

These are probably not “donations,” and the nonprofits will likely have to submit proposals of some sort and, unless nonprofits are actively searching for such foundation support, most will miss out entirely. Foundation largess, however, will not last. Within a few months, the spectacular decline of their endowments will sink in and the the fire hose will be reduced to a normal flow—or even a trickle.

While the NYT piece doesn’t cover it, the same phenomenon is happening with government grants, but at a much higher level. In addition the normal billions of federal grant dollars up for grabs, billions more are included in the three COVID-19 Stimulus Bills passed so far, with Congress likely to past several more bills.

So, the time to seek foundation and government grants is now.


* Since grant writing in the time of COVID-19 is a strange experience, this is good time to read or re-read Gabriel Garcia Marquez’s wonderful magical realism novel, Love in the Time of Cholera.

Community foundations and grants that are more work than they’re worth

We get calls from some (inexperienced) potential clients who want to pursue “community foundation” grants, which are usually small grants that range up to $5,000 or $10,000, but we almost always tell them the same thing: those grants aren’t worth chasing. We’ve mentioned that, in grant writing, zeroes are cheap, and many very large grants aren’t much harder to get, and to manage, than smaller grants.

Something unusual, however, just happened: We got a phone call from a community foundation CEO who is unhappy because he’s finding small grants harder and harder to give away. It seems that this community foundation offers free grant writing training to local nonprofit leaders in hopes of helping them understand how to write proposals, but the nonprofit executive directors still can’t be bothered to fill out the foundation’s relatively simple applications for the small grants it offers. The foundation is trying to get the local nonprofits to seek funding from it, but they won’t, because of the problems I mention in the first paragraph. While we love work, there’s nothing we could do for this foundation to solve this problem—we said him that the foundation should make the grants larger and they’ll get more applications. Alternatively, just give the money away without an application.

We also got a recent call from a client who is now turning down these kinds of smaller grants. Why would an organization turn down money? Because, the client said, by the time the she applies, deals with the bureaucracy, gets the money, and accounts for the money, there is little or no real money left to provide services—it’s all gone into administration. Dedicating management resources for $500,000 or million-dollar grants makes sense. Dedicating management resources for $5,000 grants doesn’t.*

Community foundations that want to make an impact are better off just sending the check to the nonprofits they already like without requiring an application. Or, they could invite nonprofits to submit applications they’re already submitting. For example, we recently worked on a SAMHSA Strategic Prevention Framework – Partnerships for Success (SPF-PFS) application; a community foundation interested in opioid use disorder (OUD) prevention and treatment could say to a local nonprofit, “If you’re already applying for a grant and send it to us, we’ll review it too, just using our own criteria.” Emailing a copy of an existing grant is easy—it would be something like the college Common Application in college admissions, but for grants. As far as I can remember, we’ve never seen a foundation do this.

I feel bad for community foundations that are trying to give away money unsuccessfully—but there is (rarely) such thing as a free lunch, and nonprofits know that friction costs are real.


* As Isaac relates in the very first post we put up, back in 2007, the first grant proposal he wrote in 1972 was for $5,000. That made sense then, as $5K was real money in 1972, but it’s not any more.

Foundation and government grant applicants: It’s “Hell yes” or “No.”

Derek Sivers has a rule for many things:

No ‘yes.’ Either ‘HELL YEAH!’ or ‘no.’” He says, “When deciding whether to do something, if you feel anything less than ‘Wow! That would be amazing! Absolutely! Hell yeah!’ — then say ‘no.’

That principle applies to other fields: are you going to get the job? If the employer really wants you, they are going to be very “hell yes,” and they are going to start courting you. With any reply other than “hell yes,” keep looking. Don’t stop looking till the contract is signed—and don’t be surprised when the employer is a whole lot more excited about you the day after you sign up with another outfit. Same is true in dating: don’t stop lining up leads unless and until that special person says HELL YES! This is also true in applying for most grant funding: assume it’s a “no” until proven otherwise.

We’ve had lots of clients over the years who have been encouraged by foundations that are eager to cultivate applications but seem decidedly less eager to actually cut the check (CTC). Talk is cheap, but the CTC moment has real costs—in pro hoops and grant seeking. Foundations are prone to delaying that magic moment, if possible. Foundations, like many of us, like the flattery and attention that comes with dangling cash in front of people who desire said cash. Note that I’m not arguing this behavior is fair or appropriate—just that it’s common. Foundation officers seemingly enjoy the flattery that comes with nonprofits’s seduction attempts.

To a lesser extent, some government funders at the federal, state, and local level also engage in the dangling CTC approach, but government rules often discourage excess promises from government officers to applicants. If your agency has applied for a government grant, you’re unlikely to hear anything until you get the hell yes email (notice of grant award) or the “thanks for a lovely evening” email (thanks, but no grant this time around). Still, if a funder, government or foundation, requests more information about your proposed budget or asks if you’ll accept a smaller grant, you’ll almost always eventually get the desired response. Few funders will bother with info requests unless they are likely to fund you.

As a rule, though, your default assumption should be that the funder is not going to fund you until they want to fund you. This is a special case of the Golden Rule. Your assumption should be “no deal:” don’t waste time anticipating a promised deal that may not happen. Spend that energy improving your services and pursuing other funding opportunities. Many foundations also like giving out the last check to make the project happen, rather than the first one, so keep chasing early grants—even small ones.

Philanthropy is not being disrupted by Silicon Valley

The Atlantic writes that “Silicon Valley Has Disrupted Philanthropy.” A lovely article, except for one minor issue: Silicon Valley has not “disrupted” philanthropy. The evidence presented for the article’s thesis is an anecdote from a Boys & Girls Club, “a 2016 report about Silicon Valley philanthropy written by two women who run a consulting firm that works with nonprofits and donors” (we could write similar reports), and this:

The Silicon Valley Children’s Fund, which also works with foster youth, has contracted with a marketing firm that will help it “speak in the language of business and metrics,” Melissa Johns, the organization’s executive vice president, told me.

There are a few other anecdotes, too, though these anecdotes don’t even rise to the level of “How to lie with statistics.” The author, Alana Semuels, is likely correct that some nonprofits have learned to adjust their proposals to use the language of data and metrics. She’s also correct that “rising housing prices in Silicon Valley mean increased need for local services, and more expensive operations for nonprofits, which have to pay staff more so they can afford to live in the area.” But the solution to that is zoning reform, not philanthropy, as anyone who is data- and knowledge-driven will soon discover.

Still, it’s possible that philanthropists will eventually adopt the tenets of effective altruism en masse. But I doubt it. Some reasons for my doubt can be seen in “Foundations and the Future,” a post in 2008 that was accurate but not especially prescient, because it points to features in human nature. In the ten year since I wrote that post, we’ve seen little substantive change in foundations. Other reasons can be seen in Robin Hanson and Kevin Simler’s book, The Elephant in the Brain: Hidden Motives in Everyday Life; the chapter on charity explains how most donors are most interested in feeling good about themselves and raising their status in the eyes of their peers. Most donors don’t care deeply about effectiveness (although they do care about appearing to care about effectiveness), and caring deeply about effectiveness often invites blowback about donors being hard-hearted scrooges instead of generous benefactors. What do you mean, you want to audit all of our program for effectiveness? You don’t just TRUST us? No one else wants to do this. Fine, if you must, you can, but I find it improper that you are so skeptical of our good works… you can see the youth we’re helping! They’re right here! Look into their eyes! You can tell me all you want about data, but I know better.

The real world of nonprofits and motivation is quite different than the proposal world. It’s also easier, far easier, to write about doing comprehensive cost-benefit analyses than it is to actually do epistemically rigorous cost-benefit analyses. I know in part because I’ve written far more descriptions of cost-benefit analyses than have actually been performed in the real world.

It’s not impossible to do real evaluations of grant-funded programs—it’s just difficult and time-consuming. And when I say “difficult,” I don’t just mean “difficult because it costs a lot” or “difficult because it’s hard to implement.” I mean conceptually difficult. Very few people deeply understand statistics sufficiently to design a true evaluation program. Statistics and regression analyses are so hard to get right that there’s a crisis going on in psychology and other social sciences over replication—that is, many supposed “findings” in the social sciences are probably not true or are due to random chance. If you’d like to read about it, just Google the phrase “replication crisis,” and you’ll find an infinite amount of description and commentary.

Medicine has seen similar problems, and John Ioannidis is the figure most associated with foregrounding the problem. In medicine, the stakes are particularly high, and even there, many supposed studies defy replication.

The point is that if most accomplished professors, who have a lot at stake in terms of getting the data right, do not or cannot design or implement valid, rigorous studies, it’s unlikely that many nonprofits will, either. And, on top of that, it’s unlikely that most donors actually want such studies (though they will say they want such studies, as noted previously).

To be sure, lest my apparent cynicism overwhelm, I applaud the goal of more rigorously examining the efficaciousness of foundation-funded programs. I think effective altruism is a useful movement and I’d like to see more people adopt it. But I’m also aware that the means used to measure success are quickly going to be gamed by nonprofits, if they aren’t already. If a nonprofit hired me to write a whiz-bang report about how Numbers and Statistics show their program is a raging success, I’d take the job. I know the buzzwords and know just how to structure such a document. And if I didn’t do it, someone else would. A funder would need strong separation between the implementing organization, the evaluating organization, and the participants in order to have any shot at really understanding what a grant-funded program is likely to do.

It’s much easier for both nonprofits and funders to conduct cargo-cult evaluations, declare the program a success, and move on, than it is to conduct a real, thorough evaluation that is likely to be muddled, show inconclusive results, and reduce the good feelings of all involved.* Feynman wrote “Cargo-Cult Science” in 1974, long before The Elephant in the Brain, but I think he would have appreciated Simler and Hanson’s book. He knew, intuitively, that we’re good at lying to ourselves—especially when there’s money on the line.


* How many romantic relationships would survive radical honesty and periodic assessments by disinterested, outside third-parties? What should we learn from the fact that there is so little demand for such a service?

“Your methods are unorthodox”

As GWC readers know, getting information about state and local grants is often tricky. Every state and municipality is different, and, like foundations, few if any make any effort at standardization or the user experience; most just assume that the usual suspects will apply for grants, and consequently they end up forming de facto cartels. In theory, too, all government grant information is also public information, but that’s a little like the theory that DMV employees are public servants who work on behalf of taxpayers: connecting theory to practice can be hard or nonexistent—naive visitors to the DMV learn.

Anyway. I spent some time attempting to get into the Wisconsin “Division of Public Health Grants and Contracting (GAC) Application” page, which is stashed behind a password wall for no reason I can discern. In the process I ended up emailing “Yvette A Smith,” a contracting specialist, to request access, and in reply, she told me that “Your request is unorthodox.” While not quite as good as “Your methods are unsound,” I did actually laugh out loud; I do like to imagine I’m the grant-world equivalent of Captain Willard talking to Colonel Kurtz in Apocalypse Now.

And Yvette is right: our methods are unorthodox and we do disturb the fabric of the grant/proposal world. That’s part of the reason we’re effective.

Still, I had no idea that there’s an orthodoxy in the State of Wisconsin. And if there is, what is that orthodoxy? Is it John 16:10 that describes how users should access GAC Application information? Or does orthodoxy emerge from other texts?

Alas, I didn’t inquire that far, and I also never quite got access to the GAC Application Page, but I was able to find the information I needed elsewhere. Still, I did learn just a little about the quality of governance in Wisconsin. A famous paper looks at “Cultures of Corruption: Evidence From Diplomatic Parking Tickets,” and the authors find that “diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations, and these differences persist over time.” I wonder if my own experiences interacting with local and state governments are similar: the worse the quality of random bureaucrats, the worse the overall level of governance.

Bad news in new tax bill for nonprofits that depend on small- to medium-sized donations

I recently wrote about Bad and good news for FQHCs in the latest Republican tax bill, and last week, the Republican tax bill passed under its official title, “Tax Cuts and Jobs Act” (TCJA). Like it or not, the TCJA is now law and I’m continuing to look at its implications for nonprofits and grant seeking. As reported by the Washington Post, “Charities fear tax bill could turn philanthropy into a pursuit only for the rich.”

Why? The combination of doubling the standard deduction and limiting the deductibility state/local taxes and mortgage interest will likely significantly reduce charitable donations by middle and upper middle income Americans. Those people would need very high deductions to bother itemizing, so many won’t. That’s very bad news for smaller to mid-size nonprofits that depend on donations.

Unlike businesses, which can enter new markets and develop new products, nonprofits have relatively few revenue possibilities (the main ones they do have are listed at the link). In addition to grants and fee-for-service contracts (e.g., foster care, substance abuse treatment, homeless shelter beds, etc.), these are limited to membership dues (for member organizations like Boys & Girls Clubs, animal rescues, etc.), fundraisers, and donations. The latter three will be impacted by the TCJA.

While every nonprofit executive director dreams of landing a donor “whale,” mega-donors are not only rare but tend to give to larger and well-connected nonprofits (the rarely acknowledged “swamp” of philanthropy, if you will). The booming stock market and lowered corporate tax rate will likely to produce more whales, but many of these will donate to corporate or family foundations—not garden variety human services nonprofits toiling away in relative obscurity. We’ve had many conversations with executive directors whose nonprofits are doing good work but find it hard to translate “good work” into “increased donations.”

Nonprofit executive directors will have to make a choice that will become more acute in 2018: cast off in the whale boat to search for Moby-Dick or chase schools of small donation fish. The former strategy is usually pointless and the later is time consuming work that will become harder as many Americans realize that there won’t be a tax deduction reward because they won’t itemize.

The silver lining is that foundation portfolios are being engorged by the historically high bull market. They’ll also receive huge donations from corporations and the upper-income people, who will get much of the direct benefits from the TCJA. No matter what, foundations must distribute 5% of their assets every year, and we offer foundation appeals in part with that in mind to clients.

Also, federal spending on discretionary grant programs continues to rise and most states should see increased tax revenue, some of which will be allocated to grant programs. As budgetary chaos subsides, federal agencies will resume normal RFP patterns.

“Provide project details in 500 characters or less”

Today I was working on a foundation proposal submission and came across one of my favorite questions ever: “What are you requesting? Provide details (500 characters).”

Right. You, the funder, are going to get TONS of detail in. . . 500 characters. This post, up to the preceding sentence, is about 250 characters, or half the length of the possible answer. Twitter has recently shocked the media world by shifting from its 140-character standard to its 280-character long-form. So the applicant is to “provide details” in the space of two tweets.

I think whoever wrote that question wasn’t thinking about what they were writing or was thinking about it and decided, “Whatever, I’m going to have some fun with this.” It wouldn’t be the first time I’ve seen an Easter Egg in an RFP.

Grant writing during an economic boom: primary health care, substance abuse, homeless services, and jobs!

In 2010, I wrote “Grant Writing from Recession to Recession,” and last week the Bureau of Economic Analysis announced that GDP increased by 3% in each of the last two quarters. The stock market is rocketing upward.

This post is the obverse of my 2010 post; while grant seeking and grant writing are eternal, they’re different during economic lows and highs. As we’ve written many times before, nonprofits typically derive revenue from a mix of donations, membership dues, third-party reimbursements (e.g., Medicaid, substance abuse treatment, etc.), fee-for-service contracts (e.g., foster care, home health care, etc.), government grants, and foundation grants.

As the economy takes off, nonprofits will see increased donations, fundraising revenue, and/or membership dues, as people either have more disposable income or think they do. Still, it’s a shortsighted nonprofit that puts too many revenue strategy eggs in the donation / fundraising / membership dues basket—any number of impossible to predict black-swan events could occur, or the economy could just fizzle back into the slow growth pattern of the recent decade. Donations and membership dues could disappear in a flash, just like they did in 2008 – 10.

Nonprofits that provide some kind of heath care should see a big uptick in third-party reimbursements and fee-for-service contracts, particularly regarding Medicaid services (FQHCs for example), opioid-use disorder (OUD) treatment, and HIV services. Despite eight years of political posturing, it looks like some version of Obamacare and expanded Medicaid is here to stay. Also, with more Americans now dying annually from ODs than car crashes, there’ll be big increases in funding for OUD treatment and HIV services, since HIV transmission is closely linked to the injection drug use that is at the center of OUD.

This brings us to grants. Despite rumors, the Trump administration and Republican congress have not decreased federal funding for discretionary grant programs. The FY ’18 Federal Fiscal Year began on October 1. Since 1998, Congress has funded the federal government via a series of Continuing Resolutions (CRs), rather than passing actual budgets. In general, CRs use a “baseline budgeting” concept, which means that the FY ’18 CR, which just passed Congress last week, mostly continues funding levels for discretionary grant programs from the previous CR, adjusted upward for inflation.

Since every Federal program has a strong lobby and highly paid lobbyists, Congress rarely makes significant, real spending cuts. Instead, if anything happens, Congress might restrict the rate of federal spending growth—but not adjust the underlying, baseline level. Funding for the NEA, public broadcasting, etc., will not be eliminated or even reduced. These parts of the government are popular symbolic targets, but virtually all of the growth in the federal budget comes from Medicare, Social Security, and Medicaid. Any budget hawk that doesn’t propose reductions to the first two is simply not serious.

There are actually more federal grant dollars up for grabs in FY ’18 than in FY ’17. The same will be true for grants from most states and big cities/counties, as tax revenues will climb with the rising economic tide. Counterintuitively, there’ll probably be less competition for most RFPs. With the better economy, some nonprofits will forgo submitting competitive grant proposals, choosing to pick the new low hanging fruit of donations, membership dues, and fundraising. Smart nonprofits will, however, go after every plausible government grant opportunity, since there’s no good reason not to and some organization is going to get the grants.

In the coming years, the big grant opportunities will likely be in primary health care, substance abuse treatment, Ryan White services, homeless services, and job re-training. One of the oddities of America at the moment is that homelessness continues to increase, despite a pretty good economy. Many cities, like Los Angeles, Seattle, San Francisco have passed, or proposed, big new local taxes to fund homeless services, in addition to the federal McKinney Act Programs through HUD. With respect to re-training, despite low unemployment rates, about 90 million working age Americans remain out of the workforce for reasons ranging from former incarceration to less than catastrophic disabilities to outmoded work skills or something.

The workforce must adjust to the rise of robots and AI-related manufacturing and services, which means lots of grants will be available for job training and re-training project concepts. Nimble nonprofits, who traditionally have been involved in such services as housing, prisoner reentry, family support, after school programs, teen pregnancy prevention and the like, would be wise to change their missions to go where the money will be.

Foundation grants will also be a good target. By federal law, foundations are required to spend at least 5% of their endowments annually on grants. With the huge stock market run, foundations will be flush with investment earnings that must be distributed through grants. Go get ’em tiger.

Great foundation grant concept: Food deserts, mass transit, farmers markets, and poor folks

Everyone from the Department of Agriculture to Michelle Obama to national hunger advocacy groups have embraced the concept of “food deserts” in recent years as one way of explaining the conundrum of why poor folks in the US are both obese and food insecure at the same time. Since we often reference food deserts in varied human services proposals in urban areas (and have written posts on the subject), I know that there’s a debate in the literature about whether food deserts actually exist. Faithful readers know that reality matters little in grant writing, so we take the food desert concept at face value to build our “end of the world” arguments in needs assessments.

While cruising around LA last week, I heard a radio piece about how the City of Dayton is addressing its food deserts. Like most economically disadvantaged urban communities of color, Dayton concluded it has a food desert problem. While this is no surprise, their solution is an amazing example of how to structure a winning project concept for foundation funding.

The City formed a partnership with the mass transit agency, a local human services nonprofit and local farmers to operate a small farmers market in the City’s transit hub. The idea is that poor folks can pick up salad stuff on the way to work (thereby avoiding being super-sized at lunch by McDonald’s) or a sack of veggies on the way home, so that they can make a stir-fry instead of calling Domino’s. At the same time, the nonprofit offers nutrition classes and recipes, while Farmer Caitlin has an outlet for her baby arugula. The only thing missing is to have homeless folks pick the produce.

Like the mythical Project NUTRIA I wrote about years ago, Dayton has hit the foundation grant jackpot with this idea. Steal it.

Deadlines can be your friend because they force a decision

Many of us have been in romantic circumstances with a wishy-washy or indecisive person (maybe we’ve even been that person). That can be frustrating because the potential romantic partner always seems on the verge of making a commitment, only to pull back, vacillate, introduce a rival, dither, consult with clueless or inept “friends,” and so on.

In the grant world, applying for foundation and government grants is a largely similar process. But the differences count too. Almost all government grants have a hard decision deadline—you’re in or out at a specific point. You have to be ready to submit proposal by the deadline or you can’t get the grant. Although everyone complains about deadlines at one point or another, they’re useful because they make you do things (or not do them). You can’t have an infinite number of meetings spread over months or years. The deadlines force a decision, and forcing a decision is valuable.

There are other advantages to deadline-based government grants: they’re usually for larger amounts of money and longer project periods than foundation funding—unless the foundation really, really loves you (which you won’t know and can’t find out until you apply).

Foundation grants, however, often have simpler applications and will usually fund a wider array of projects. We’ve seen numerous clients get funded for foundation projects that didn’t quite fit government programs. The one thing that foundation clients have in common, though, is that they decide to apply and complete the application process.

Sometimes we get hired in part because we provide an external structure to ensure that the job gets done, rather than waiting until an eternal tomorrow to finish it. In this respect, and to return to the metaphor in the first paragraph, we’re like a dating coach who provides the support and motivation necessary to get out there and make things happen.