• April 20, 2014

48% of Charity Leaders Say Foundations Are Oblivious to Their Needs, Says Survey

Nearly half of nonprofit leaders say their foundation supporters are blind to the biggest challenges charities face and could do more to help them meet rising demand for services, train leaders, and deploy new technology, according to a poll released this week.

In a survey of 121 nonprofit leaders, the Center for Effective Philanthropy says it found that only 52 percent “believe their foundation funders are aware of the various challenges their organizations face.”

The survey also found that:

  • Groups that run businesses or programs that produce revenue want foundations to help them expand such work to offset declines in government support.
  • Almost all of the nonprofit leaders surveyed said their biggest fundraising challenge is winning and holding onto foundation grants, which is even more difficult than getting government grants in today’s austere environment.
  • Nonprofits want foundations to award more grants that span several years and that finance general operating needs, instead of putting more of their money into new programs, which often add new costs that charities cannot afford.

Ellie Buteau, vice president of research at the center and author of the report, says foundations’ lack of awareness of their grantees’ challenges stems from poor communication. Very few foundations assess the needs of the nonprofits they support, Ms. Buteau says. Instead, program officers at foundations tend to focus solely on the programs they support.

“I’m not sure how many foundations see that their responsibility is to strengthen an organization,” she says. “They fund programs.”

She says she hopes that view changes.

“It’s in the long-term interest of foundations to do what they can to assure the long-term health of organizations that they’re relying on to reach their goals,” she says.

Uneasy Conversation

But nonprofits don’t find it easy to say that to grant makers. Many nonprofits are reluctant to discuss the challenges they face because they fear risking the loss of grants for their programs.

The survey found that nonprofit leaders were more likely to feel they could be honest about their challenges when they believed their foundation supporters were aware of such issues. Previous research by the center found that only 3 percent of foundation program staff “conduct a formal needs assessment when considering what assistance beyond the grant to provide,” Ms. Buteau said. And only 18 percent of the nonprofit leaders in the new survey said they felt strongly that they could be candid with grant makers about their challenges.

Patricia Kozu, a former board member at the center and managing director of the National Employment Law Project, says she finds it discouraging that so little seems to have changed in the relationship between grant makers and grant seekers over many years.

“What’s surprising is that we’re still talking about these issues,” she says. “These aren’t just a few voices out in the woods. This is throughout the nonprofit field. It applies for all of us.”

Toward Greater Openness

Nonprofits and foundations share in the blame for the lack of communication, says Jennifer Ratay, executive director of the Silicon Valley Social Venture Fund, or SV2.

Nonprofits need to be as open about their challenges before a grant is awarded as they are once support is received, she says.

And as a former program officer at the William and Flora Hewlett Foundation, Ms. Ratay says grant makers need to do more before grants are awarded to encourage nonprofits to feel comfortable talking about challenges. Rather than asking about weaknesses, grant makers should ask how they can help a group “move from good to great, or great to excellent,” she says.

Nearly 75 percent of nonprofit leaders, new and experienced, said in the survey that they lacked money for training that could improve their executive skills and develop future leaders. Yet the survey notes that experts say nonprofits face a “leadership deficit” that could hurt their ability to deliver the results foundations seek from the programs they support. Foundations may not be aware of the desire for such training because nonprofit leaders do not request it for fear of appearing self-serving, Ms. Ratay says.

“It’s hard for nonprofit leaders to invest in themselves,” she says.

Long-Term Grants

Technology is another tool that nonprofit leaders say they can use to improve their operations. But two-thirds of leaders said foundations need to help them acquire the technology that could lower administrative costs.

That’s why longer-term grants are so important, especially ones that earmark money for unrestricted purposes such as technology and leadership training, nonprofit leaders said in the report. Ninety-five percent of the grant seekers said lack of multiyear grants and unrestricted support were two of their top challenges.

The survey found that grant seekers want foundations to do more than simply award grants for programs; they want them to support the steps charities need to take to ensure those programs can deliver.

But the survey found that few foundations make that a priority.

Andrea Cohen Barrack, head of Canada’s Ontario Trillium Foundation, said not all foundations have a “mandate to support core operations of organizations.” Grants spanning three to five years are better than shorter-term support, she says, but anything longer is difficult to justify when there is so much demand for program aid.

“The expectation for ongoing operating support is not reasonable,” Ms. Barrack says.

Nonprofit leaders interviewed for the study understand that, the report said. They are not looking for foundations “to help them with everything they find challenging,” the report said, but they do want help with the most pressing issues they face.

One of the easiest ways that foundations could improve how they help nonprofits is to share lessons among all of the groups they support, the report said. Today, only 36 percent of nonprofit leaders believe their foundation supporters share such information.

“There’s a sense that there is untapped information from foundations that they could be learning from instead of reinventing the wheel at a time when needs are so great and resources so scarce,” Ms. Buteau says. “It seems like a really missed opportunity.”

The Center for Effective Philanthropy’s report, “Nonprofit Challenges: What Foundations Can Do,” is available free at effectivephilanthropy.org.


Communication Gap: What Nonprofit Leaders Want From Foundations

52% say their foundation supporters understand challenges their organization faces.

31% say their foundation supporters take advantage of all resources available to help grantees deal with those challenges.

36% say their foundation supporters share what they know about how organizations with similar challenges are coping.

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