What Makes A Prospect Great?
There are many factors at play, but the best donors have a history of giving, strong linkage to your cause, and the ability to share truly impactful gifts of money, time, or personal expertise. While individuals
make up the largest group of donors, foundations
also present fantastic opportunities for other nonprofits like yours. Why? Because giving is what foundations do! As Helen Brown and Elizabeth Roma mention in a recent tutorial
, foundations are highly motivated donors. Many have mandates to share their resources with all kinds of nonprofits. What if your organization could establish a donor relationship with a major public charity, or secure a grant from a private family foundation? Alternatively, if you instead choose to focus your energy on individual donors, you can research the individuals who support, work at, or donate to various foundations. Welcome to Foundations and Public Charities Research 101. Let’s break it down.
Types of Foundations
There are two categories of foundations: private and public. Public charities
are nonprofits that rely on many different sources of funding, especially from the public. An example might be United Way or Habitat For Humanity. Private foundations
are nonprofits with a single source of funding. There are three distinct types of private foundations:
- Family Foundations are the most popular type of private foundation, where wealthy families designate gifts to other charitable organizations to advance a number of different or related causes. Often, a member of the family chairs or sits with the foundation’s board of directors. A good example of this foundation type is the Bill and Melinda Gates Foundation.
- Corporate Foundations are financed by the profits of a related company, but are separate legal entities with the same 501(c)(3) duties and responsibilities as other nonprofits. An example of a corporate foundation is The Bank of America Charitable Foundation, Inc.
- Operating Foundations earn revenue to run its own group of charitable services. This type of foundation is common with hospitals and museums, where sources of revenue pay for the foundation’s own services and operating costs. One example of an operating foundation is the J. Paul Getty Trust, which operates one of the most visited museums in the United States.
Affiliations and Giving History
Foundations make excellent donors. However, maybe you aren’t interested in the foundations themselves, but the people connected to them. After all, Giving USA reports individuals make up 72% of the total giving in the United States, while foundations give 15%. Let’s say you’re interested in Foundation XYZ. No organization can run without people. Can you learn who’s on the board of directors? Who donates to XYZ, and where are those funds directed? Who volunteers with XYZ? Suddenly, your list of individual prospects just got a whole lot bigger. Giving history is an important clue to consider when researching foundation prospects. As Grantspace
explains, “Past grants can reveal a funder’s preferred subjects, organization types, and ranges of grant amounts.” Most foundations list their donors and donation amounts in IRS 990-PF forms. Private foundations are required by law to disclose this information, so it’s often easier to find data from these organizations. Public charities are not obligated to disclose their 990s, they often share these forms on their website for transparency. Keep in mind, most 990s have about a two-year delay.
Ways To Search
There are many ways to search and learn more about foundations and the people connected to them. Here are a few resources and strategies to try:
Some of the best resources are the ones the foundations supply themselves. Most have a website where they describe their mission and values in their own words. On a foundation’s website, you can also find its most recent 990 forms. Connect with foundations on social media to see who they interact with and the kind of content they share.
Don’t have a PR tool? Visit your local library and explore listings of nearby foundations so you can determine who gives to them or to whom the foundations themselves tend to give.
There are many excellent databases that take you farther than a simple Google search. Guidestar
is one example of a very comprehensive source of foundation and public charity information in the industry. Not only does it provide you with information on nonprofit officers and board members, but it also gives you full 990s, summarized financial records, the purpose of grant information, impact statement, and purpose of grants. For researching Canadian prospects, the Canada Revenue Agency offers similar resources. You may even be able to access Guidestar within your PR tool, like iWave
. This information can help you:
- Determine an appropriate ask based on past giving to other organizations;
- Build a list of charities with potential to give to your cause based on a number of search filters;
- Understand what causes your prospect is passionate about (what foundations they’re affiliated with);
- Search by an individual’s compensation from the foundation to identify high capacity donors; and
- Find out how to apply for grants.
Build a List
Let’s say your nonprofit focuses on local environmental causes. You can build a list of foundations that have funded similar organizations in your home state/province or nationally. Search for organizations with environment-focused mandates. Simply put, an environmental foundation is much more likely to give to your organization than to, say, a health or arts nonprofit.
Perform a Reverse Search
Additionally, you can take this one step further with a reverse search. First, make a list of nonprofit organizations that are similar to yours. Next, research those organizations to determine which foundations fund them. If XYZ Foundation is giving to other environmental nonprofits, maybe they will give to yours too.
Whether you’re trying to learn more about current prospects, searching for new prospects, or applying for grants or sponsorship, foundation research
is a major asset. If prospect research is a puzzle, the right foundation could help you locate the missing pieces. Not only can it benefit your search of individual prospects, but it is also a potential donor itself. About the author: Ryan McCarvill is iWave’s Content Manager. He joined the iWave team in 2016. Ryan enjoys meeting and learning from nonprofit professionals, researching trends in the nonprofit community, and offering strategies for development teams to use iWave’s solutions to meet and exceed their fundraising goals.