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Why People (and Foundations) Give Away Their Money

A great deal of unnecessary mystery surrounds the process of philanthropy (a fancy word for “giving away money”). Dozens of books, articles, and sociological studies have analyzed the typical donor, trying to understand the philanthropic impulse. Professional fundraisers study these documents like sacred texts. Because the task of raising money makes so many people so uncomfortable, much foolishness has been written – and sold – to help people deal with their discomfort.

To boil down the research and save you a bunch of reading, here’s the number one reason people give away their money: somebody asked. If it’s someone they know and trust – their sister-in-law, parish priest, or car mechanic – so much the better. All fundraising, including grantwriting, begins with the simple act of one person asking another for money.

Who gets the money?

Assuming, however, that you aren’t the foundation president’s sister-in-law, it’s useful to consider the criteria foundations typically use when giving away money. While reading through the following list, think about how it relates to your own “giving behavior.” People ask you for money every day – they send you mail, call you on the phone, ring your doorbell. How do you evaluate these requests? The staff and board members of foundations are human beings, too, and their criteria are similar to yours and mine.

Issue. Do you care about what the organization does? Are the group’s concerns yours? Is the issue timely?

Credibility. Have you heard of the group? Does it strike you as well-organized, competent, legitimate? Have you seen the organization on television or in the newspaper? News media coverage helps lend instant credibility (although many legitimate organizations haven’t made the news – yet).

Referral. Do you know of this group through a friend, family member, or colleague? When we lack direct experience, most of us will take the recommendation of somebody we know or at least trust.

Enthusiasm. Do these people really care about their work? Can you sense their excitement? When asked what grabs her attention in a proposal, Libby Ellis, former grants director for Patagonia, Inc., answers, “Passion.” Marjorie Fine of the Unitarian Universalist Veatch Program at Shelter Rock emphasizes the same theme. “We start by looking to see if people are energized by their work,” she says. “We look for strategic opportunities, where people are in motion – a movement is happening – not just issue areas.”

Organizational history. What has the organization done in the past? How do those accomplishments reflect its ability to get things done?

Realistic goals. If someone asked you for money to abolish stupidity, you’d be pretty wary. If, on the other hand, someone wanted to abolish illiteracy, and had a reasonable plan to do it, you might write them a check. Goals can be difficult, but they must be seen as attainable.

Uniqueness of organization or project. Is the project filling a unique niche? Are other nonprofits already doing what this group has set out to do? Is the organization trying to solve a new problem? Or does it have a new angle on an old problem? A new constituency?

Sources of funding. Grantmakers want to know who provided previous funding, and who a group will approach to fund new projects. This information helps establish a group’s credibility; a list of prospects allows funders to check with each other, discuss competing proposals, and avoid duplication of funding.

Financial self-sufficiency. Most grantors like to see organizations develop the capacity to raise their own funds – through membership development, major donors, program service fees, and benefit events. Organizations that can support themselves, rather than rely solely on foundations, are more likely to survive, grow, and succeed.

Leadership. Who’s running this thing, anyway? Grantmakers want to know who the decision-makers in an organization are: their experience, relevant training, etc.

Constituency. Who will benefit if the group succeeds? Most foundations are trying to reach specific constituencies; grantseekers need to define theirs.

Networking. Will there be any new collaborations, new combinations of constituencies or interest groups? On the principle of strength in numbers, a group that broadens its base and involves more people is more likely to succeed. As Elaine Gross of the Unitarian Universalist Veatch Program notes, “Seldom is any one group able to have a significant impact. I’m interested in the ways groups are working together to bring about change.”

Program and organizational development. What is the organization’s long-term goal for the project? Will it build the organization? Will it significantly affect its constituents? Does it have the potential to develop into an ongoing program? Can it be replicated elsewhere?

Financial management. Can the grantee organization handle money in a professional way? Will the group produce timely, accurate reports?

In other words, pretend it’s your money. You wouldn’t give it to just anybody, would you? Your job as an organizer and grantwriter, then, in to set your group apart. Be creative, be thoughtful, be thorough.

By Andy Robinson
January/February 1997

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