Philanthropy is, increasingly, a world of insiders. How many foundation websites explain in no uncertain terms that they do not accept unsolicited proposals, or even unsolicited letters of interest? For nonprofits that aren’t already in the foundations’ circles or don’t socialize with the foundation leaders and staff, it looks and feels like an impenetrable, unscalable, concrete wall. And as government programs like the Social Innovation Fund put government dollars into grantmakers who bring their own predetermined lists of grantees, smaller and newer nonprofits—particularly nonprofits representing the interests and concerns of controversial constituencies—find foundation fundraising an impossible game that could even affect their prospects for some public sector funding. Imagine the sound of a metal gate closing just as you get to the door. That’s where foundations tend to be nowadays.
Does this mean that foundation grantmaking reaches an ever-narrowing range of nonprofits? To an extent, unfortunately, yes. The foundation grantmaking game—remember, we’re talking about some 100,000 foundations—depends a lot on who you know on the inside (or as an intermediary referral) who will bring your nonprofit’s proposal or letter of interest to the attention of someone within the hallowed halls of philanthropy. The barrier presented by foundations that won’t even entertain or read unsolicited letters is a real problem for nonprofits looking for the “risk capital” that foundations are known for. But nonprofits with good ideas, strong experience, and projects and programs worth funding are a hardy lot and sometimes find ways of vaulting over the barriers to present ideas to foundations that they might not otherwise hear or consider—but should.
Brad Smith of the Foundation Center wrote in 2011 that 60 percent of foundations say that they do not accept unsolicited proposals. A 2009 Foundation Source survey of its clients, all family foundations, found that 77 percent would not consider unsolicited requests. Of those family foundation respondents, 72 percent said that they already know whom they wanted to support, 37 percent feared being “inundated” with proposals, and the rest generally wanted to be anonymous.
It is increasingly rare to read a statement such as this from the Robert Wood Johnson Foundation:
RWJF seeks out and supports pioneering ideas and innovative solutions to ensure we stay on the cutting edge in our efforts to foster a culture of health in America. We accept unsolicited proposals for pioneering ideas and issue awards throughout the year, with no deadlines.
It is an implicit recognition by the foundation’s managers that good ideas ferment and bubble up from the field, outside of a foundation’s four walls, and that those foundations that want to be cutting-edge look to nonprofits on the front lines of social change to tell them what they might not know, anticipate, or recognize.
While they all have their reasons, more and more foundations, young and old, are moving toward the rejection of unsolicited proposals as standard procedure. The Case Foundation, founded and run by AOL mogul Steve Case and his wife Jean, builders of a high-tech firm that surely had to leap over barriers to get noticed during its infancy in the business world, makes its position clear:
The Case Foundation invests its resources in specific projects and initiatives that complement our approach to philanthropy. Our grants and staff time are focused on partnerships that we develop proactively with nonprofits, businesses, and other foundations. We regret that we are unable to review or consider unsolicited proposals.
Case suggests that unsolicited nonprofits seeking financial assistance check out the websites of GuideStar, Charity Navigator, the Council on Foundations, and the Foundation Center for ideas on where they might go, given the locked door at Case.
Plenty of respected foundations with solid track records of excellent grantmaking have decided to close the door on unsolicited proposals, too. To name a few: the Edward W. Hazen Foundation (because of the decreasing percentage of unsolicited proposals that the foundation is funding altogether combined with the foundation’s desire to focus on increasing the effectiveness of the “emergent education and youth organizing” field, though the foundation said it would on occasion issue RFPs), the Conrad N. Hilton Foundation (because it prefers to “cultivate long-term projects and partner with organizations whose efforts are aligned with our program strategies”); the Marguerite Casey Foundation, and the Rita Allen Foundation (because it “practices proactive grant making and works with a variety of experts in its fields of investment to identify organizations invited to submit proposals”). These are respected, admired foundations, all making it clear that without an invitation, you shouldn’t come knocking. It’s as if being able to submit unsolicited proposals or LOIs has become a quaint, nostalgic practice of a bygone era.
How can nonprofits penetrate the inner sanctums of foundations protected by moats of “do not accept unsolicited” policies? We offer some polite (and perhaps less polite) suggestions for worthy nonprofits trying to tap desperately needed sources of philanthropic capital.
1. Get visible to build relationships: Even the non-soliciting foundations show up at conferences—the Council on Foundations, Independent Sector, Exponent Philanthropy (the new name for the Association of Small Foundations), and the programs of regional associations of grantmakers. Remember, as a nonprofit participant, you aren’t supposed to solicit for money at these conferences (although we’ve watched plenty of people who have and routinely do in the most embarrassing way). However, showing up, talking, presenting if you are able to get a slot on a workshop panel, even organizing rump non-conference sessions on your topic opens up your organization to these foundations. Periodically, you’ll see foundation reps at these gatherings snap to attention as they hear something that they haven’t known before and realize is of value to their grantmaking agendas. When you meet the foundation program officers, follow up with materials and information that you think they might be interested in—not the hard sell for your organization, but the soft sell of information that builds on common interests. Some foundations that preclude unsolicited proposals and LOIs will, however, make grants to “new” nonprofits on the recommendation of trustees or staff. You only get to them by building relationships, and you build relationships by being visible, connecting, and interacting.
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2. Research their boards and staff for connections: It’s often surprising how poorly nonprofits research their potential funders. Go through the target foundation’s entire board for an in-depth review of the bios and resumes of the board members. That means doing solid Google searches on them, checking out their bios on Who’s Who and other directories, checking on the Foundation Directory online for their presence in other foundations, and checking GuideStar for their memberships on other nonprofit boards. You’re looking not just for personal connections, but issue connections. You’re missing the boat if you don’t see whether these people have written or when or where they have spoken out on issues of concern to your nonprofit (a Nexis search for news clips mentioning foundation board members by name is very useful). When you find those topical and organizational intersections, reaching out to those individuals is a way of getting your organization into their foundations’ mental hoppers.
3. Send information, working papers, and thought pieces: When you find non-soliciting foundations with issue interests common to your organization’s, send them information that you think will give them new insights and ideas, pique their interest, and stimulate their thinking. When foundations reject unsolicited proposals, they are implicitly saying their existing circle of grantees and information sources constitutes whatever they need to know. The reality, which your organization knows, is that these foundations don’t know all there is to be known and would themselves benefit if they were exposed to new ideas. If foundation program officers find themselves benefitting from your ideas, there’s an opening to be pursued. An even more intriguing possibility is to send think pieces and working papers and ask the foundation for substantive reactions and feedback—that is, shift the dynamic from potential grantor/potential grantee to one of equals engaged in the solution of a shared concern.
4. Send an LOI anyhow: The Foundation Center’s Brad Smith suggests that nonprofits not simply send LOIs to foundations that announce they don’t accept unsolicited proposals. His theory is that raising money from foundations is fundamentally a matter of relationship-building, so that should precede any submission of letters of interest or letters of introduction. Smith is correct that relationships are clearly the preferred way of relating to foundations, but for those nonprofits that can’t get around to lots of conferences—especially given the large number of foundations out there that may or may not show up at philanthropic conferences—an unsolicited LOI may be necessary. Rather than sending LOIs willy-nilly, if an LOI it must be, the letters should be aimed at foundations whose grantmaking and interests are compatible with your nonprofit’s. You can determine this by looking at the foundations’ grantmaking, particularly through the grants listing in the Foundation Directory Online.
Sending thought-provoking information is preferable, but a cover letter that verges into an LOI isn’t a bad idea. Look for foundations whose grant guidelines suggest that they “do not encourage,” rather than “do not accept,” unsolicited inquiries. That might seem like a minor semantic difference, but it is worth exploring. However, in order to deal with the foundations’ hypersensitivity to unsolicited “proposals,” don’t send an LOI with a funding request. Use the LOI to establish a relationship on the issue that your nonprofit and the foundation share. Engage the foundations in terms of intellect rather than triggering their all-purpose resistance to requests for dollars. The reality is that many foundation program officers really do want to engage around ideas, but don’t want to be targets for obsequiously false nonprofit suck-ups. Sometimes foundation program officers and trustees see and sense an opportunity to engage on a higher plane and are thrilled at the opportunity be seen as more than a human wallet.
5. Work for philanthropic change: Other than the programs of the National Committee for Responsive Philanthropy (FULL DISCLOSURE: This writer was NCRP’s executive director some years ago), there seems to be little occurring in the nonprofit and philanthropic sectors promoting change in foundation grantmaking and virtually nothing that challenges the increasingly closed-door approach being adopted by foundations toward grant-seekers. The Foundation Center’s Smith suggested some time ago that even the generally do-not-solicit foundations ought to keep a portion of their grantmaking open for unsolicited proposals. “Foundations receive a tax exemption on their investment income in exchange for contributing to the public good,” Smith wrote a couple of years ago. “One way to do that is to maintain at least a single program area, however small, that invites the public, in the form of nonprofits, to freely apply for grants.”
There are a number of foundations that do maintain open windows for unsolicited LOIs or proposals in specific areas of their grantmaking, consistent with Smith’s recommendation. For example, the William and Flora Hewlett Foundation identifies on its grant guidelines webpage which of its program areas are accepting unsolicited proposals (such as energy and climate, Bay Area communities, and performing arts continuity and engagement) and which aren’t (education, global development and population, and philanthropy). The Lumina Foundation’s online grant guidelines indicate that the foundation intends to be proactive in most of its grantmaking, meaning that it doesn’t generally accept unsolicited inquiries, but it notes, “We have allocated a modest amount of grant monies for unsolicited inquiries to encourage innovative ideas that relate to our strategic portfolio.”
Opening the door to unsolicited LOIs and proposals runs counter, it would appear, to the “strategic grantmaking” dynamic that has overtaken so many foundations, designing their own theories of change and generally running their own programs with nonprofits pre-selected to do the work. While debated vociferously pro and con (increasingly con), strategic-grantmaking foundations are frequently functioning more like operating foundations, designing “scripts” in which compliant nonprofits are cast. However, really good strategic thinking requires constantly scanning the environment to discover which nonprofits are making headway on challenging issues. A foundation’s strategy is inherently weak if it exists primarily within the foundation’s internal echo chamber or among a limited circle of foundation staff talking to each other. Foundations that open their eyes and ears to the dynamic work of nonprofits in the field are being truly strategic because they are listening to and looking for the creative ferment that emerges from the best of nonprofits—even if they happen to be little nonprofits not on the foundations’ current radar screens.
To this point, foundations certainly don’t face any pressures on Capitol Hill for changes in areas like foundation payout rates or increases in disclosure and transparency. But beyond that, within the nonprofit sector, there has been less and less outright criticism of foundations for their grantmaking policies and procedures per se other than whether they are making grants to desired causes. Clearly some of the procedural issues reflected in foundation grantmaking practices aren’t matters of legislation and regulation, but as Smith notes, foundations receive a tax exemption authorized by the U.S. taxpayer and should be a subject for advocacy by nonprofits. The nonprofit sector cannot and should not give foundations a grantmaking pass simply because all of us need their dollars.
The importance of nonprofits on the ground, on the front lines of social change, is that they are—or should be—the eyes and ears of philanthropists who want to better understand the nature of the issues they want to address. But where you stand on this issue is, sadly, where you sit. Todd J. Sukol, the founder of an organization called the Do More Mission, was once an impassioned proponent of foundations’ accepting unsolicited proposals.
“Did you know that three fourths of America’s 950,000 public charities have annual budgets of $500,000 or less? […] Among them are some amazing folks doing remarkable things at relatively small amounts of money—if you’re turning everyone you’ve never heard of away because the inbox is clogged with junk, you’ll never be able to meet enough of the best players to decide who is most deserving of your support,” Sukol wrote. “You could easily miss the chance to make your most important gift. Think for a minute how far a relatively low cost extra pair of hands (with brains attached) could take you in terms of making your charitable giving a whole lot more impactful—and more rewarding.”
As of February 2014, Sukol became the executive director of the Mayberg Family Charitable Foundation, located in Bal Harbour, Florida and Rockville, Maryland. According to Sukol’s LinkedIn profile, through Do More Mission, he had been a philanthropic advisor to Mayberg prior to becoming its ED. According to Mayberg’s profile on the Foundation Center’s Foundation Directory Online, Mayberg “contributes to only preselected organizations.”
Hopefully, Sukol will reintroduce the Mayberg Family Charitable Foundation to the “impactful” and “rewarding” environment that ensues when a foundation accepts unsolicited proposals. He will be helped along on that path if nonprofits speak to institutional philanthropy—established foundations—and press them to open the window to the fresh thinking and creative ideas of nonprofits by accepting unsolicited LOIs.