Tag Archives: foundation appeal

Foundations Give Away Five Percent Of Their Assets a Year: Typhoon Haiyan Shows Why You Should Act Now, Not Later

As you’ve probably noticed if you’re reading any news, typhoon Haiyan likely killed at least 10,000 people in the Philippines. That’s obviously a human tragedy, but there’s one small implication for nonprofit: it pays to apply for foundation funding sooner, rather than later.

The reason is simple. Foundations react to the news cycle. They also give out a limited amount of money every year. When the biggest typhoon in history hits the Philippines, funders are going to redirect a lot of their giving to victims of the typhoon. Since they’re only required to give away five percent a year, and almost no foundations give more, there is usually a finite amount of money that any individual foundation will spend in a given year. By definition, any dollar that goes to one purpose can’t go to another.

(We should clarify that we’re not criticizing foundations for donating to typhoon victims. We are, however, pointing out that in any given quarter, foundation priorities might change.)

Nonprofits that applied for foundation funding three months ago probably had their proposals evaluated on their merits without the typhoon impetus hanging over them. Incidentally, it takes us about three to four months to complete a foundation appeal, which means anyone who hires us tomorrow shouldn’t be strongly affected. But any nonprofit that spent the last year “planning” or “developing” or whatever has just seen the likelihood of its foundation appeal working decline if they submit next week.

The same thing happened, on a larger scale, after 9/11: that tragedy sucked up a huge amount of donations and foundation funding for the rest of the year. The many local, national, and international problems that nonprofit and public agencies had been addressing on 9/10 didn’t go away on 9/12. But many foundations focused on the event that dominated the news, rather than quieter needs that might make the back pages of newspapers and the bottom of websites—if they’re covered at all.

Again, we’re not trying to diminish what happened on 9/11. But we are trying to provide some context from a grant seeker’s perspective. It’s also worth noting that, as Ken Stern describes in “With Charity For All,” donations to 9/11-based causes hit diminishing returns quickly. In other words, there were too many dollars chasing too few effective charitable opportunities. Organizations like the Red Cross, which realized as much, redirected some donations to other causes and then got blasted in the media.

I mentioned above that important problems don’t go away even when major tragedies like typhoon Haiyan or 9/11 occur. My favorite example of underappreciated statistics involves cars. Pop quiz: do you know how many people died in car-related events last year? Around 30,000, which is actually down from the 40,000 people who used to routinely die in car-related events, but it’s still about ten times greater than the number of people who died on 9/11. Despite these facts, auto deaths get nowhere near the press that 9/11 did.

Almost no one is deeply engaged in rethinking our urban and transportation infrastructure to reduce reliance on cars and, as Matt Yglesias says in The Rent Is Too Damn High: What To Do About It, And Why It Matters More Than You Think, increase real incomes by lowering housing costs in major cities. (The book, by the way, is brilliant, short, and worth reading, since its main subject touches on so many economic and political issues in contemporary life.)

The contrast between the reaction to a major event like 9/11 and typhoon Haiyan and to everyday events like the deaths of innumerable people in cars demonstrates the power of unusual stories to shape funder priorities. As a society we’re willing to tolerate 30,000 people dying in and around cars every year because those deaths happen across dispersed geographic areas and 365 days a year. That doesn’t get the reaction of a single, horrifying incident. Most nonprofits are working on relatively everyday struggles around poverty, crime, research, and so on. They don’t have the advantage of every news outlet in the world shining an intense light on their cause. Both their timing in applying for funding and the content of their proposals should reflect that.