In this webinar replay, Margy-Ruth and Perry Davis will help you understand how to tap into the world of foundations during this crucial time.

Full Transcript:

Steven: Okay, my friends, it’s 2:00. Is it okay if I go ahead and get this party started officially?

Margy-Ruth: Let’s go.

Perry: Please.

Steven: All right. Awesome. Well, good afternoon, everybody. Good morning if you’re on the West Coast, I should say. Thanks for being here. Happy Friday. We’re going to be talking about COVID-19 funding strategies from foundations, specifically. I’m so glad you’re all here. Nice to see a full room. Hope you’re doing okay today. I’m Steven. I’m over here at Bloomerang and I’ll be moderating today’s discussion as always.

And just a couple of housekeeping items really quick before we get into it. Just want to let you all know that we are recording this session and we’ll be sending out the slides, the recording, all the goodies. Don’t worry. You won’t miss anything. So if you have to leave early for another appointment or you get interrupted by a coworker or a toddler . . . hopefully not a coworker. That’d be a little weird, but I know how it is working from home. Don’t worry. We’ll get all that good stuff to you this afternoon.

Most importantly, we would love to hear from you over the next 60 minutes or so. Send us your questions, your comments. We’re going to be looking at those throughout the hour. We’re going to save some time at the end for Q&A. I think we’re going to have a lot of time for Q&A, which will be fun. So don’t be shy. Send in those questions. You cannot annoy us. Don’t sit on those hands. You can do that on Twitter. We’ll keep an eye on the Twitter feed as well, and we’d love to hear from you.

If this is your first Bloomerang webinar, just for context, I always like to say what Bloomerang is in case you’re wondering, “What the heck is that?” Besides all these webinars we do, which we love doing these webinars, Bloomerang is software, donor management software. So if you’re interested in that, check it out. Don’t do that right now, but that’s just what we are for context. You can watch videos on our website. You can get all that good information if you are interested in software.

Don’t do that right now. I’m so excited for this webinar. What a great way to end the week. My new friends, Margy-Ruth Davis and Perry Davis, joining us from beautiful Manhattan. How are you two doing? You’re doing okay? You’re holding up okay over there?

Perry: We’re great.

Steven: It’s good to see your faces. We’ve been talking about this for weeks now. And I’m super excited to have you. If you all don’t know Perry Davis Associates, check them out. Awesome people. They do great work. We’ve got some mutual clients. I can vouch for them.

They’ve been doing this a long time. They got a crack team of experts over there that have been not just contributing to our blog, and in fact they wrote today’s blog post if you want to check that out, but they’ve got awesome resources on their website, years and years of experience, and we’ve been chitchatting the last half hour about all things philanthropy. So if you got to hear that, you got some bonus information there. But they’re here to talk about foundation support, which is something that they really know a lot about.

So I’m going to pipe down because you’re not here to listen to me. We got two experts here. Perry, I think you’re going to share your screen or bring up those slides.

Perry: Yes. Thank you for giving me that opportunity. Here we go. And here we go. Does everybody see everything?

Steven: Yeah. It looks good. Take it away.

Perry: Terrific. Let me move over so you can see me a little better, although I think I’m black by the bar here, which I’m going to move over. There we go.

I’m delighted to be here as hosted by Bloomerang. As Steve said, we’ve had a long history with the organization. We are a little bit older than Bloomerang. We started in 1986. Sitting next to me, and you’ll hear a lot from her, is my wife and business partner, Margy-Ruth.

Our background in fundraising goes back before our company. So our company started in 1986. My first fundraising work was as the Chief Funding Officer for the New York City Public School system and thereafter for the New York City Partnership. And then we started this company and Margy was a fundraiser for a concert hall in the Lincoln Center area. That’s how long we’ve been around and doing fundraising work. We do it for a host of clients all over the world and we do all kinds of it.

We’re going to talk about foundations today. And let me say that we also do some support work for foundations, though our real work is for the nonprofit community, helping them deal with the most important thing they need in order to exist, which is money and income. And we help them, I hope, with that and we’ve been doing it for a lot of years.

So as we get started, we’re going to focus on this current situation. Unprecedented is the word you keep hearing. It’s gotten overused, but it is. And we’re going to talk about how foundations are successfully or sometimes not successfully tapping into foundation support.

We’ve got a lot of experience with foundations. We’ve worked with them and with our clients, as I said, for many years, but in recent months, we’ve really gotten our feet held to the fire in this emergency and seen the good, the bad, and the ugly in terms of how foundations are involved and how nonprofits are involved. We’ll tap on that experience. We’ll tap on, as well, the work that we’re doing most recently and hope it’ll be useful to you.

We realize that there are so many people listening in and watching. We know that you come at very different levels of experience and very different levels of information and backgrounds, so we may say things obvious for some, not so for others. We’ll try to be useful as much as we can for everybody and look forward to the questions, really, as Steve said.

Again, thanks to Bloomerang, and let me move on to our next slide, which I am not getting to move to. There we go.

Margy-Ruth: So also I’ll start here. I thought the best place to start would be to look at foundation giving from the foundation’s point of view. It would be funny to say foundations are people too. And I mentioned to Steve before that one of the inherent problems with working with foundations is the inherent power imbalance. There’s a natural power imbalance because you are asking and they are giving, but I think that can be overcome in many ways, and I’ll talk about how.

I’m going to start by saying that as I talked to foundation professionals, and I talk to many, many of them, what I am hearing from them about COVID-19 is that they are overwhelmed and they are scared. They are scared personally as everyone is, but they’re also scared professionally because they don’t know what the future will be and they don’t know what’s expected of them. All the clear rules, and there seem to have been so many before, have been cut out from under. Now what do they do?

So many, and I would say not perhaps an overwhelming number, but many are stepping up and spending more. There’s a lot of discussion about whether foundations should shift their giving away from one kind of giving to COVID, whether they should spend more than the minimum 5% of their assets a year. And especially many of the smaller ones are reaching out to and looking for new organizations to fund locally in their communities.

A survey by Exponent Philanthropy found that smaller foundations especially are giving for the first time to organizations and grantees that they never did before.

Perry, move to the next slide, please.

Foundations come in different shapes and sizes. That’s kind of obvious, but just so we understand. And we’ll be covering the different kinds.

Of course, there are issue foundations, so there are organizations that care about one particular or two particular issues. There’s a way within the COVID framework of dealing with those.

There are local and community foundations that are going to be interested only in what’s going on in their backyards.

There are the mega foundations, which are so large that they can afford to take on many different issues.

And there are family foundations, and family foundations are often just individuals in search of a tax shelter.

Each one requires a slightly different kind of approach, and we’ll be talking about those too.

The question a lot of people ask themselves and you hear a lot is “What’s COVID-19 relevant? When are you a COVID-19-relevant organization?” I think the easy answer is everyone is. There are those that we would call, let’s say, COVID-relevant because they’re appealing for emergency direct support, and there are others that are relevant to COVID because they have to survive the day after. And both are looking for funding and each kind of organization has to respond in its own way.

For the single-issue foundations, those that are interested in brain tumors or they’re interested in the arts or they’re interested in education, those foundations are going to be sensitive and open to questions of “How does my organization survive and how do we respond to a new reality?” Because in all likelihood, the world won’t quite look the same after we’re all out of quarantine.

And for those foundations that are offering emergency direct support, their appeal is quicker. Their appeal has to be immediate. It cannot wait, because once the worst of the crisis is over, what they need funding for will seem less relevant. And even if those organizations have gotten into a debt or deficit because they have made their contribution inactivity now and are looking for money later, that’s probably not the right way to go. You should be asking for money while people are looking to fund that particular kind of program.

How do you find more support? Start with your current funders. They are looking for you. As I said, many of them are also just in the same fog everyone else is and they’re wondering how you’re doing. They want to hear from you, and you should be upfront. You should let them know the status of their projects. Are things going well? Are things going poorly? Have you had to stop altogether? Have you been postponed that big event until next year? How are you treating the staff?

We heard today from an opera singer who was meant to perform this August and was told, “Well, the opera has moved for a year.” She can take half her salary now and half later, or all of it later. That’s something a funder would want to know, how you’re treating the people who work for you, whether you’re able to continue or whether you’re going to have to adapt. And be sure to talk about the different possibilities. You might have a Plan A, a Plan B, a Plan D or F, but be sure to talk about them.

Perry: So let me give an example. We have a number of clients and nonprofits who receive funding from the same foundation. It has eclectic interests mainly in the arts, but also in humanitarian projects. They went so far as to send a letter to everybody who they sent a grant to, which said, “In this crisis, we understand that some of you may have had to reduce the operations and maybe the grant we’ve given you is something you can’t spend now. We need to know that.”

Now, it would be nice if the next sentence they said was, “Because we will hold it in abeyance. We will allow you to change your priorities to fit the current situation.” Instead what they said was, “In fact, if you tell us this, we may not renew you for a gift next year. We may put you on hold for a while, because our priorities are our priorities and what you told us you would do, we expect you to do.” That’s not a great story. Of course, I’m not going to name that foundation, but that’s one end of it. And that was transparency. It was very hard to hide from them what the story is.

I guess I can indicate now one organization which got a grant from them had to do with actually having high school students train seniors, work with seniors, who are, in some cases, homebound and teaching them how to use a computer. So we intend to go back to the foundation and say, “Not only was your gift relevant to this crisis, but it became indispensable for this crisis and we’d like you to give us some more money.” Are we going to succeed? I don’t know. But certainly, they opened the door and we’re going to try to step through it.

In another case, we have a theater company, a small theater company, a unique and experimental form of theater, which is in trouble. There’s no question about it. And the foundations there that have been supporting them are all grappling with how you deal with the arts when Broadway is shut down, when theaters are shut down.

What we have there is we’re working with the theater company to come up with ways in which they will be able to both stay alive in their core operation, cut costs, of course, in the actual presentations that they were going to make on Broadway or off-Broadway, but also see if they can pivot to virtual presentations to concerts.

The Metropolitan Opera did a massive concert online about a week ago that made the news everywhere. They had patrons for it. They had support. They then made it available free, and it garnered a lot of additional support for them. Not sure how much it’ll plug their budget, but it’s certainly helped. So those are the ways in which organizations are reacting.

Margy-Ruth: So what can you ask of your foundation funders? You can ask them if they’re giving emergency support money. Many of them are. Most foundations . . . not “most.” Nothing is “most.” Many foundations are prioritizing and privileging current grantees because they know their current grantees and trust them already. So if you’re already getting money from a foundation, this is a good time to say, “Could you give us some emergency support?” Are they ramping up their money?

I am hearing again and again that collaboration and cooperation is as important than ever among funders because no one can solve this problem alone. Can your program officer refer you to other grantors? Would they be willing to make a reference? In good times, that doesn’t happen all that often, but in this period I’m seeing it.

You might also ask whether loans are possible. If you are an organization whose money is now tied up but is sure to come later, that might be something that you could get from a foundation more easily perhaps than a grant.

Here’s what we’re hearing from foundation for professionals: “Why haven’t I heard from you yet?” We have an organization that deals with end of life. One of our clients actually buries indigent New Yorkers, and we know the foundation that supports them very well. And the program officer called me up and said, “Our friend who runs this burial society, she hasn’t called me. She hasn’t asked me for anything. She must not need my money.” Well, we fixed that very quickly, but you can understand how the funder really wanted to hear from the grantee.

You can also ask . . . because we are hearing that they are, that foundations are being more lenient with timelines, with expectations, and with reporting requirements. And if you are in over your head with asking for money and fundraising now and trying to keep an organization together and alive, that could be a real gift to know that you’re not going to have to report as quickly or as onerously as otherwise.

And if it’s possible, you might ask the foundation professional, the grant officer, whether you can convert a restricted grant to general operating.

Perry: So here’s the more difficult discussion. Can you possibly get funding from sources that you haven’t gotten funding from before? It’s a difficult step. It’s always a difficult thing to do. It’s even more difficult in these circumstances. There are tools to help you determine.

If you are, again, a COVID-19 direct service provider . . . we’re going to get later to those foundations that are helping in this regard. There are a lot of resources to help you find out, and we’ll talk about how the best get those funds. But if you are an organization struggling to survive because your funding has dried up because you are unable to serve clients at this time and worried about survival, you’ve got to look at your area of interest. Is it social services? Is it the arts? Is it a cultural organization? Is it a youth organization?

Now is the time for you to use all the tools you can access, FoundationSearch, Foundation Center, GuideStar, iWave, and to see who out there cares about your area.

Once you check that information through these sources, you’ve got to go to the website of the organization. They may have changed. They may have adapted to this crisis. They may say one of two things, or many things. They may say, “We’ve shifted completely away from what we usually do and we’re focused on COVID-19.” Okay. Move on to somebody else if that’s not your area.

Or they may say, “We understand there’s a crisis, but our board has met. Our funders and our supporters all decided that we should support first our recipients, but secondly, stay within our theme area.” Well, that gives you the opportunity to expand, to go to try to get to them.

And we always believe that when you do research, if you find donors who are giving to more than one organization like yours, then they are theme-driven, more likely to be open to giving funding to you, and that’s who you should go after.

And of course, you should be looking at their actual historic data, because one of the tenets of our consulting practice, and we tell this to all our clients, is if you’re going to a foundation for a grant, you should ask for an amount that’s specific. Not generosity, but name a number. And that takes research to be able to be within a range that makes sense.

So those are some of the tips about going cold. One of the most important always is to not be cold, to try to warm the relationship. And we think that one of the most important ways to warm the relationship, of course, is to work with your lay leaders whose networks we hope you have already tapped, but who might at this time even be more open to sitting down on the phone, in a Zoom call, and thinking through who they might know, which trustees they could get to. And you have to give them their support.

With RelSci or tools like LinkedIn, you can map out who knows who. And this is a great time, as people are home and thinking about the people in need, for you to tap into your lay leadership and get them more activated than they’ve been before and get them to reach out for you.

Call your board members. First thing to say, of course, is, “How are you doing? How are you feeling? How is your family?” You have to be, of course, attuned to the personal issues first in this crisis. It’s a health and economic crisis.

But then if they’re open for further discussion, who are the networks? Who do they know? You all have board members who you bring on with great hopes, who say to you after a while, “You want me to go to friends and help get support for you? I don’t know anybody.” We have a standard answer for that. The standard answer is, “Okay, you don’t know anybody. I bet you know people who know people. Let’s try to start thinking that way. Your attorneys, your accountants, your bankers. Let’s see if we can go to them and see if you can enlist them in helping us as well.”

And remind your board the most basic thing about foundations: They are not pulling money out of their own pockets right now in order to give funding. They have already put money in a foundation that they cannot tap and therefore must be given away. Margy mentioned before it’s a 5% minimum according to the IRS regulations, but we hope that they will step up and start giving more than the 5% minimum.

Didn’t happen in 2008, by the way, historically, but we do hope it’s going to happen now and we’ve heard that it is happening now. So that’s important as well.

And what kind of foundations are we going to go to? So the community and local foundations, those that are closest to your community, they share a common interest. They know what you’re doing. They’re the ones to go to first.

Look at foundations. Check by zip code. There are all kinds of ways to do this. FoundationSearch just sent an email about two hours ago indicating that, for COVID issues, they’ve put together a major new database. Haven’t had a chance to look at it because we have this call, but I just got that email.

Who’s the contact? Who can make your case? Who should make the case for you? Is it you, the director, the development person? Is it the board member? We think a board member is a great person to make a call because they are investing themselves without remuneration. They’re doing it as volunteers and they are a great resource for you as ambassadors for what you’re doing to get you out there known in the community.

I’m just going to put this up for a second. We’re based in New York, though our clients are all over the world. This is just a listing of community foundations and local foundations that are in the area.

To mention one that’s not in the area, the Metro Boston Foundation is giving grants in Boston, the metropolitan area, for general operating support, $25,000 each. They are raising money and giving it out, and they’ve raised $2.2 million to date.

They understand that organizations that are affected by COVID, even though they’re not providing services to COVID-infected people or in the health area, but they will stop existing because the funding will dry up and they’ve stepped in to fill that role. So look carefully and you may find that information as well.

It’s difficult to have an “in” to the large foundations, but there are opportunities and there are new ones. Again, we’ll have something for you at the end where you can check them, but these are some of the larger organizations.

Of the top 25 charitable foundations in America, five of them have said that they will increase their grants, eight said they would maintain giving levels, and the rest were still assessing. Nearly all had already committed money to rapid response funds, and the average commitment of these foundations is about $35 million. So check carefully the website. See if there’s any possible connection you might have to the board or to professionals there and see where you’re going.

A quick tip for you. We’ll have a few of these quick tips in this presentation. Foundations are watching YouTube. You’re watching them. They’re watching you. They are researching what you do.

How do they know what you’re doing best, how are you holding up, and what are your challenges? Your website. Keep your website up-to-date. Know that it’s going to be looked at. Try to reach your network and make sure that other people are checking as well.

An impact report, stories all will make you much, much more attractive to those foundations that have decided to spend time to look in addition to accept proposals that are coming in.

Margy-Ruth: So Perry talked about how to find the foundations, what to look for in finding a match, how to approach foundations. I’m going to now turn for a few minutes and talk about what does your application look like and how do you put it together.

So first, the obvious, check the foundation’s website. Make sure their priorities align with yours. Sometimes priorities change. Some of the larger foundations, Mother Cabrini Health Foundation, for example, in New York State, have special COVID pockets or special appeals. So does New York Community Trust. Many of them have that and that information is on their website.

Make sure your organization aligns with the foundation’s mission, because if you are an arts organization and you go to an organization that cares about healthcare, you’re not going to get to first base. I think you know that already, but it’s important to state.

It’s not about sending scattershot proposals out to thousands of places and seeing what hits. It’s much more like targeted aiming to look for those where you have the best match.

In some foundations, not in all, you’ll find a program officer willing to help you out and hear you out before you apply. If you’re lucky enough to find such a person, you might ask if you can share a draft of your LOI, your letter of intent, so that you know that you’re on the right track and that what you’re asking for is what the foundation is interested in.

Perry: Let me share a quick story of two weeks ago. We represent a hospital system. Hospital system had a $42 million need in the area of isolation wards, ventilators, PPEs. We knew that money would be raised only from the mega foundations.

What we did was write to the mega foundations, keep them up to date. If we had a contact with them, obviously we worked closely with that contact. And we had been working for years to try to get support from some of those mega foundations, two of whom had already been supportive, but we wanted more.

We then got an epidemiologist, probably the country’s . . . this is not a United States hospital system. We got the country’s leading expert to do a webinar, which was invitation-only. We had no more than a dozen professionals or funders, each of whom could make a gift of a million dollars or more, in this very private briefing session.

The briefing was confidential. Everybody felt special about being part of this briefing. The money needs were explained carefully. As I said, we had prepped everybody. We followed up. The result of that was a reaffirmation by one of the participants of a $5 million gift and a new $5 million gift from another one of those participants, smaller gifts from others.

And the follow-up, of course, was the publicity if it was requested, anonymity if it was requested, but it was this kind of cultivation. “You’re special. We’re going to tell you what’s going on. You know that we need your money, so we’re not going to make an ask, but we’re going to do it in a way that you’ve learned something and you understand that your money will be used well and, of course, that the organization that is going to get your money is going to be true to it, report carefully, and you’ll be able to trust that it’s going to be used properly.”

Margy-Ruth: So that really encapsulates this slide, which is present measured and evaluated data. Ask for a specific amount. Perry talked about that, not to ask for a generous gift, but an amount.

Your budget is really important. You can explain in your budget that responses will change rapidly. Your needs will change. No one is asking you to be a prophet, but you can try as best you can to give options and to explain about the budgets. We’ll talk about that in a minute.

Share your plan. It’s not that you just need money. It’s not just, “We need money to keep going.” What’s the gap and how are you going to fill it?

You’re going to be asked, “Well, what’s your board done? Who else has given you?” Make sure that you keep careful records of that. And if you can’t say who’s already given you funding, you can surely say, “We’ve applied to this one, this one, and this one, and our applications are pending.”

And remember that the foundations are going to step up when they see a need and they see you filling that need. It’s not about protecting the status quo. It’s not about protecting your employees. It’s about actually fulfilling the mission for which your organization has been created and for making a difference in the world, and that’s what you’re here to do.

Another quick tip. When you put together your budget, try as much as you can to put together real numbers. Explain your numbers. Explain how you reach those numbers. Show your work, because too many round numbers are a red flag. It means you’re just being lazy. You’re not thinking through how much things will cost. But if you can explain that you’re going to need $4.26 for each mask, or you’re going to need this and this amount of money for another very important item in the budget, you’ll have much more credibility even if it turns out that you need 1,000 of that item instead of 500.

Perry: Let me talk about donor-advised funds. It’s an interesting area. It stifles our research. Donor-advised funds are put together by individuals who often have a windfall of income, who want to quickly get their tax benefits for it, or want to have a foundation and pay minimal amounts of the foundation to operate so they can do it through other experts. But there’s no way to know whose funds donor-advised funds include because anonymity is one of the great benefits of it.

So how do you deal with that? And how in this crisis is this important? Take a minute on this because I think it’s interesting.

If you have a larger database of donors, even small donors, and there is a way for you to see those funds coming in from donor-advised funds where the donor does permit themselves to be noted . . . and you always have that opportunity in a donor-advised fund. You can be anonymous or you can identify yourself. See if you can find that.

Now, Bloomerang has an opportunity for you to tag those donations when they come in, which would make sorting very, very easy.

And let’s say you find a group of individuals who have given grants to you through their donor-advised funds. Here’s what you know: They are sitting on a fund and they have not distributed all that money. They are taking their time. They’ve already gotten their tax benefits. They are saving that money for a rainy day. It’s raining. This is the time for you to say to those individuals, “We appreciate what you’ve done before, and we have an emergency,” existential if we’re not COVID-related, and immediate and urgent if we are COVID-related. “Would you consider an additional gift from your fund at this time?” That could really reach out.

Again, it’s not the funds that the person is going to take out of their pocket. It’s already there waiting to be given out. You are going to accelerate the speed with which they give those funds and hopefully have it directed to you. Reach out to them and deal with them as you would individual donors, but you know a little bit more about their capability.

Many of these funds are . . . who are they? If you see community foundation as part of the check, usually that’s a donor-advised-fund. They’re separate prospects.

This is very new information. I’m going to read it, actually, to you. “HalfmyDAF.” David and Jennifer Risher from California have just offered to give a million dollars to donors’ favorite nonprofits as matching gifts. Donors with DAFs, donors must pledge to empty half of their donor-advised fund account and direct that money to the charity by September 30th.

On the first day, eight donors accepted the challenge and pledged to disperse $413,000, which became $826,000 thanks to this match. The donors are invited to list the nonprofits. The HalfDAF staff is looking through them. They will randomly then choose 50 nonprofits from the list in July, another 50 in September, each of whom will receive a grant of $10,000.

That is very new information and you can look up HalfDAF on the web right now and you’ll find out more about them.

Individual supporters. Remember, I’m going to say what it says here. Family foundations are simply tax vehicles for individual donors. In such a case, consider a more personal touch. You’re going to reach out to them. You’re going to suggest a Zoom dinner or Zoom lunch. You’re going to tell them what’s going on and you’re going to know that they’re a foundation that has to give the money away, but you’re going to treat them as individuals.

Separately, individuals also feel a strong pull to step up. They are key stakeholders. It’s a far more intimate relationship, and therefore you’ve got to look at these people as individual donors and not forget about them, but individuals who don’t have foundations, obviously, you have to focus on as well.

When you all get this deck, you will have these resources that continue to grow. If you look at our website, you will get more of them, but here are some of the most interesting ones where you will get a listing of all the possible gifts that are going out because of COVID-19. Some are response to the crisis and some are response to the emergency and existential problems that are being faced by the nonprofit community.

I see we are three minutes over our half hour, and I want to thank everybody for listening in. I hope it was useful. And I want to turn it over to Steve for questions and answers.

Steven: There’s a steep penalty for going over three minutes with too much information, unfortunately. So I’ll be giving you notice of that later on.

That was awesome. I learned so much just sitting here listening to you. So thank you, first of all. We’re leading with our gratitude value, so thank you so much for doing this. You’ve put a lot of time and planning into this. And also, I should tell people, I meant to say in the beginning they reached out to us and offered to do this, so this was really generous by everyone at the team. There are a lot of people behind the scenes who help make this happen. So thank you.

We’ve got a lot of questions already and probably got 20 minutes or more, if you all want to. So send in the questions if you haven’t already.

I kind of wanted to start first with one of my own comments. I was so happy to hear both of you say what you said about non-COVID-related charities, because I’ve been hearing a lot about that over the last eight weeks or so. I just think that everyone is valuable now, no matter what they do. So thank you for that. That stood out to me, for sure.

I’ll just kind of roll through the ones I thought were interesting. Got a question here asking how you two would recommend pursuing a matching grant from a foundation right now. Do you think that’s a good idea? If so, how would you go about doing that?

Margy-Ruth: We love matching grants. One of the things that’s so interesting about that is that there are some foundations . . . again, remember what I said at the beginning. Every foundation is different. Every one has its own personality. Each one has its own way of looking at the world, but there are foundations that love the idea because they feel they’re leveraging their money.

And if you can find a foundation or you make the offer, “Hey, if you give us $50,000, we promise to match it in X amount of time, one to one or one to two,” you’ll find some foundations that have a real interest in that.

I would say that this is a good time for a younger foundation to suggest that if they’re going to give you $50,000, you’ll try to crowd source the money or get the money from new, younger funders through a charity, a one-day a campaign, because that’s a double bang for your buck there. You’re matching their funds and you’re getting new donors. And those smaller donors will eventually turn into larger donors. So that might be another way to use a matching grant effectively.

Perry: The burial society that Margy mentioned before that we’re working with, it’s one of the most heartbreaking jobs you can imagine. And they’re in New York City, which is the epicenter of the world of this crisis right now. The work we started with them was when the foundation essentially recommended that they hire us because they were going to give them a matching grant and hope that it would be met within a period of six months. It’s about $400,000.

Margy-Ruth: They gave 250,000 if the organization could raise $500,000 from new donors.

Perry: There was a real stimulation by the donor to do that. That was several years ago. We did it. We went back to those donors. That is how the funding base began to be built for that organization.

We are probably going to raise a million dollars for this burial organization, in many ways because of the beginning of their fundraising activities for larger grants. They wanted larger grants too. They wanted grants of $5,000 and above. New donors, $5,000 and above. So the funder was making those specific requirements.

We did it a few years ago. They became regular donors, and now we reached out back to them and it was a base that began out of the matching fund. So I’m with Margy. We love these.

Steven: Wow. Very cool. Here’s one from Emily. Is there a way to research family foundations in a specific geographic area or footprint, maybe local to you? Is there a good strategy to go about that? Are there online resources?

Margy-Ruth: Zip code. Go to FoundationSearch and Foundation Center, go to those databases, and search by zip code. You can also narrow your search. It can be searched by zip code and special interest. Again, arts, education. But that should bring it up. It should bring them up.

But when you do that, think also about neighboring cities or metropolitan areas or office areas. You might live in a zip code in a suburb. The nearest city might be 30 miles away, but it would feel an affinity to your community. So look at those zip codes too. Don’t make it just your zip code. Draw a circle around where you are and see how many you can find.

Perry: We’re talking about foundations. I’m going to stray for a second because of the question. It’s a very good question. This is about individual donors. Your most likely donors are the donors you have already. That’s common sense. If, in your donor database, you have your zip codes . . . I hope. If you’re getting money wired and by electronics, it may be harder, but if you’re collecting addresses, you have zip codes.

There is a national and local database of the wealthiest zip codes. Sort your zip codes of your donors. Look at your wealthiest donors by zip code, not by amount of giving, and see whether you want to target.

Do a little research on some of the donors who may be giving you $50 a year but are in an extremely wealthy zip code. You can use iWave or other resources to check that out. You may find their capacity is much greater. You’ve done the first step of research. You’ve learned that they live in a relatively affluent area. You may get some hidden nuggets of real opportunities for individual donations that way.

Steven: Interesting. I wonder if you have a take on out-of-town donors when you have a very local footprint. It seems to me that that would also send a signal. They don’t live in your area. Maybe they used to. Maybe they receive services from you. Have you seen that?

Perry: This is going to be our most negative comment. If you’ve got a very local charity and you try to go out of town, you really won’t succeed. They will have their own local opportunities in the same area that you’re providing services for. It may be a waste of your time.

Steven: Got it.

Margy-Ruth: Unless you’re doing something that is a national model or something that you can say to people in other neighborhoods, “If we do this successfully, you can replicate it where you are.”

Perry: But you better have good metrics on that.

Margy-Ruth: But you better have good metrics.

Perry: Because everybody’s going to say they’re doing something that’s a national model. So you’ve got to be honest. If your metrics are there or you’ve got validation by a university or by a research organization that’s testing you for that reason, then it becomes national. That’s correct.

Steven: Okay. This question popped up, I think, when you were talking about reporting frequently back to funders. How often do you recommend that happen? If you are keeping people updated on maybe progress, is it a weekly thing, a monthly thing? Is there a good sweet spot, or is it kind of different for everybody?

Margy-Ruth: Sometimes it depends on your relationship with the funder. We’re dealing now with a relatively new foundation. It popped up overnight and it has something like $600 million, some kind of crazy number like that. And I was talking to the president of the foundation and she said, “We decided that we’re going to be hands off. We’re going to want responses twice a year. But if we’re giving you money, we trust you and we want you to run from here.”

We deal with others who really want to be partners. Their idea is, “I’m not just giving you my money. I want to give you my ideas. I want to be able to be around to bounce ideas off of and I want you to come back to me as often as you have something interesting to say.”

Now, that opens up a really interesting philosophical question. Because a foundation gives you money, it gives you a grant, does that give them the right to be your partner and to have ideas bounced off of them and to have a say? Well, that’s for every organization to decide what the relationship is.

Steven: Interesting. That makes sense. I like this question. I’m interested in what you two have to say. I tend to be a little bit of a renegade type guy, but I’m curious to see what you think. Nancy is wondering that if you see a foundation or a donor-advised fund saying, “We’re not accepting unsolicited proposals,” should you still try to send them something?

Perry: Kneejerk reaction. Absolutely.

Margy-Ruth: I’ll just tell one story.

Perry: There’s a line that comes up. Unsolicited proposals are not . . . So we review funder books with our board members to see who they know. That’s the standard way in which we operate. And they’ll look at it and say, “Wait a minute. It says . . .” Forget it. If you know the right person, if you have an appeal that’s unique, if there’s a way to get in, go for it. What’s the worst that’s going to happen? The money you wouldn’t have gotten, you won’t get.

Steven: Did you have a story there, Margy? It sounded like you . . .

Margy-Ruth: I do. It’s one of my favorites. I was raising money for a senior center and it was before these research tools were very good and I was flying blind. I didn’t have a lot of online data. It was a couple of years ago and I just didn’t have it. So I sent out to a lot of places based on zip code, based on area, without really knowing the organizations. And I sent out cold, although I hate sending out cold proposals, but I did because I had no choice. And back in the mail comes a letter and the letter says, “Dear Mr. So-and-so . . .” because Mr. So-and-so signed the letter. “Dear Mr. So-and-so, enclosed is a check for $25,000. It is true that we don’t fund in your area. We don’t fund senior centers.”

Perry: “We don’t fund unsolicited.”

Margy-Ruth: “We don’t fund unsolicited proposals. However, if you don’t ask, you don’t get. Here’s the money.”

Steven: I love it.

Perry: Steve, I assumed that was your sense too.

Steven: Yeah. That was where I was going to go. But I had a feeling we would be together on that. We even color-coded today. It had to happen.

Speaking of cold solicitations, Emily here is wondering if you do that and if you don’t hear back, should you follow up? If so, should you do it multiple times even though it’s a completely cold thing, or is that just kind of shooting it off and seeing what happens?

Margy-Ruth: Sometimes I think we know every assistant to a funder in the world, because I think we have talked to almost all of them over time. We follow up twice. We call. We follow up twice on each one because we have to.

I’m going to add here, though, that we’re not crazy about cold proposals. I treat them a lot like direct mail. And I would say that over the last 10 years it’s been harder and harder to get funding from a cold proposal because foundations are inundated and they don’t know what to do with all the mail that comes in.

So my rule of thumb is . . . again, I don’t recommend this for everyone. There’s always a time for something, and sometimes there’s a time for what I’m going to say, although it’s not best practices. I will send out 100 cold foundation proposals. I just don’t have a choice. I run out of everything else. It’s like my Hail Mary pass. I am going to do this.

I expect a return of under 1%. Now, when I’m asking for $5,000 to $25,000 per proposal and I send out 100 proposals and I get one back, if I’m lucky enough to get a 1% return, and that response is $15,000 or $20,000, that’s okay. I’ll live with that.

Perry: Didn’t cost that much for the mailing.

Steven: Yeah.

Margy-Ruth. It’s time. But it’s a lot better to really be targeted than scattershot and the return is much better. That’s always the first choice.

Perry: All the development officers on this webinar know this. You have to spend your time mainly deciding how you’re going to warm all the cold opportunities you’ve discovered in your research. And when you run out of every idea, you do go cold. And as Margy said, sometimes you hit pay dirt.

Margy’s highest return on a cold proposal was a half a million dollars. That half-million-dollar donor became very interested in the charity they gave to and within a year had given $5 million to a special project that they heard about. They weren’t solicited. They were that interested in the people they gave to. Lightning struck. That’s what it is.

Margy-Ruth: It was a killer letter. Steve, it was a killer letter.

Steven: I have no doubt.

Margy-Ruth: I have never done that before. You send a letter and then two weeks later you get a check for $500,000. That’s really something.

Steven: But think to yourself, “Who is the cold proposal going to go to?” You know there’s your profile of who you’re sending it to in the foundation. It’s a larger foundation, there are program officers, try to get through by phone. Try to get to a program officer. Get their name. Chances are, here’s what they’ll say: “What proposal? I don’t remember getting your proposal.” Your immediate response is, “Okay. Let me send it to you.” Now I have your name. Now I can follow up. You’ve begun to warm that out of nothing.

In some cases, it’s an accounting office and the accountant is told, “When you get proposals, don’t open them. Throw them in the garbage.” So when you ask the question, “How often should we follow up?” you’re going to have some where it’s absolutely useless and you will not be even able to get to somebody to talk to. That’s really it. It depends where that proposal is going to end up.

Steven: Okay. Let’s talk board members. Everyone’s favorite topic, board members. If you do have a board member who follows your advice from earlier, who does make an introduction, they open a door, somehow there’s a connection there, what’s the best way to take the next step? Should you write emails for the board member? How should you prepare them? What do you do after that introduction is made? Can you kind of walk through what you’ve seen work there?

Perry: The board member, if they make the introduction, there will be a very carefully written personal letter for the board member that the board member will approve, will advise on, and will sign. And that will be your letter or your email. That will be your contact.

The letter will end by saying, “I really appreciate your consideration. I’m going to follow up, if you don’t mind, and give you a call.” And then the call has to happen. That’s the key, because if there is a personal connection, nothing beats the . . .

Right now, the cold contact, if the person is a neighbor and we weren’t in this crisis, I’m going to call you and set up a lunch. I’m going to call you and see if we can get together.

There has to be the warm touch after the letter because people are all a little uncomfortable about using their connections and immediately saying, “Give me the money.” That’s why foundations are different. Foundations have to give away the money. You are trying simply to convince a trustee or a professional to give it to you instead of to somebody else or to expand their pool and give it to you as well. It’s easier, and that’s why we talk about foundations as being so important and yet so difficult to get to.

But the answer really is the personal touch has to occur.

Since we’re on the board member issue, two things, if I may just expand a little bit because it’s a very near and dear to our heart.

A board member can spend all their time . . . you’ve picked them, you thought they’d be terrific, and they did very little for you. What are you going to do with those board members? And in this crisis, is there a unique opportunity? We think there is. First of all, they’re your board member. Find out how they’re doing, and if they’re in need, help them.

Second of all, if they’re available, and there’s a little more free time because of the situation that exists and they’re not in a terrible crisis, activate them. Back to that point, if you don’t know anybody, you must know people who know somebody. Can you connect us to them or get them?

Or get them involved in some other way. We did this in another webinar. I made a suggestion and people picked up on it. Say to a board member, “Help in another way. We have in our organization people who have now been furloughed because we’re out of money. Do you have a job network, a business network, can you help us find a job or a placement for one of our employees?”

Make them feel involved in the organization and helpful. And if they help in one area, they’ll understand that they can help in others. Expand their view of how they can be involved in the organization. It’s a unique opportunity because we all have, sorry for the expression, deadbeat board members. We’ve got to see how to activate them. This might be a good time.

Steven: Cool. I love that idea. Can we talk LOIs? Can we talk the letter of inquiry itself? A lot of people are asking what should be in that? Should it be budget details, the actual dollar amount they want? Is it just the proposal? Is it a teaser of the proposal? What do you think that should look like?

Margy-Ruth: So that’s changed over the years. Things have gotten shorter. They used to be longer and now things should be shorter. Again, check the foundation’s website because some foundations are very specific about what they want, and others will only want to be approached online and they’ll have a form online that you need to use, and others will only have times of the year when they want to be approached. So check first.

Assuming that it’s just a straight letter of inquiry, I would say no more than two pages. It should explain what the need is. It should explain how much money you’re asking for.

Again, there are always rules and every rule is meant to be broken. My rule is you ask for the money in the first four paragraphs. It’s got to be in the top of the first page because the reader’s going to say, “What is it that you want from me? How do I find out?”

You can, if you want to, then put an appendix, one sheet describing the organization as an appendix to the letter. A good budget for the project that you’re asking funding for, and maybe you also have one article about the organization or one set of testimonials or something else . . .

Perry: Story.

Margy-Ruth: Or a story or a case study that buttresses the letter. Sometimes foundations will want the 501(c)(3) now. Sometimes they’ll want it later. That’s it. What I’ve just described is a lot harder than writing a six-page proposal.

Steve3n: Is there any difference in how you approach a family foundation specifically?

Margy-Ruth: Well, we talked about this before. It’s interesting, family foundations are actually tax shelters or they’re legacy vehicles or they’re ways of involving the children, but it’s the family. It’s the family down the block. It’s the people in your community who have either a donor-advised fund because that’s easier or they’ve set up a family foundation because money’s passed through a will and estate.

My strong feeling, and we were talking about this earlier today, Perry and I. As usual, we didn’t agree 100%, so I’ll tell you my position and he can tell you his. My own feeling is these are just individuals masquerading as foundations. Treat them as as individuals. And I’ll let Perry tell his idea.

Perry: It depends. They could actually be seriously involved in the foundation, and there is a structure and a bureaucracy to how they are dealing.

The biggest technological change in our 34 years of doing research on foundations is that when we started, we had no way really of researching except for “Who’s Who,” that famous book “Who’s Who.” We had no way of researching individuals.

In the days of GuideStar came up and all of a sudden we could see 990s online and we learned a lot about foundations, and suddenly we saw what the giving areas were. We could do research. We felt terrific. We really had an insight as to how much to ask for and what the areas were the foundations were giving to. We could never find anything about individuals.

Now there are tools. WealthEngine, iWave, these are important tools that the professionals out there know about. And if you don’t, you should get them and pay for them because they are critical to your work.

All that leads me to say the family foundation, do the wealth and background research on the people who are the donors in those foundations. Find out something personal about them. Find out about their business interests and their background. See if anything resonates that way that will make your letter to them look like you know a little bit more or attractive to them.

I’ll say this quickly. The downside of that is, and this is true across the board, foundations sometimes don’t even realize how much information there is about them.

Sometimes the family foundation doesn’t know that their giving records, their 990s, are public information. Certainly don’t know that there are organizations like RelSci or iWave that have done background on them, and they will be very upset if you reveal in what you’re saying that you’ve done a deep dive into their background and into their history. Be very careful about that delicate balance. So that’s just a warning about it, but at least you’ll know, and if you have a conversation, you’ll have a sense of who this person is.

Steven: That might’ve been worth the price of admission, that little warning there. That was good. It’s like calling a lapsed donor a lapsed donor. Don’t do that.

We might have only time for this last question, but speaking of lightning strikes, unsolicited gifts from foundations just dropping into their laps from organizations they never heard of. A lot of people are asking should they go back to that foundation again? Certainly say thank you, but to ask them again. What do you think?

Margy-Ruth: Treat them as a new donor. It doesn’t matter how they wound up in your circle. Once they’re there, they are yours and you should treat them as you treat anyone else. It would be helpful in the first conversation to say, “How did you hear about us?” Because if they heard about you in a way that was attractive to them, maybe there are others who would also find you interesting and you should really promote that vehicle of how they heard about you.

Perry: Which leads to a final strategy of how to get grants from foundations: prayer.

Steven: Why not?

Perry: It can’t hurt, right?

Steven: Can’t hurt.

Perry: That’s how it drops into your lap.

Steven: I love it. Boy, this is fun. I feel like I could talk all day, but you’ve already been so gracious with your time. Any other parting thoughts before we wrap up things here?

Perry: It’s been a pleasure working with you, Steve. It’s definitely unsolicited, but the work Bloomerang does and its community that it’s gotten to is fantastic. We have enjoyed what we do. We love getting up in the morning and doing what we do. We find now the ability to help in this crisis to be a fulfillment.

I want to call out Tiffany and Adi, Tiffany [inaudible 00:55:33] and Adi Hila Yoffe, who were very, very helpful in helping us put this together and all of our great staff people. We’re proud of it. And go to our website. If you have a question, don’t be afraid. We’re here to answer the questions. We’ll get back to you.

Steven: Yeah. I was going to ask you. There are about 40 unanswered questions. I’m so sorry I didn’t get to all of them.

Perry: We’ll work on it together. You got a deal. We’ll see what we can do. I bet you some of them you could help with too.

Steven: Yeah. We’ll send them over to you. This was fun. This was a nice way to end my Friday, honestly. It’s 3:00 p.m. Eastern, so this is a good way to cap off a busy week. We had Giving Tuesday. We had all this stuff.

So thank you both, and thanks to all of you for hanging out. I know you’re probably pretty busy as well, so we definitely appreciate seeing a full room.

I just want to let everyone know about a webinar we’ve got coming up next week, if my computer works. We got my buddy Jarrett Way joining us on the 14th. So if you’re free, 2:00 p.m., he’s got some really interesting research and case study on donor psychology. So might be actually kind of a sneaky good follow-up to this session. So if you’re free . . .

Perry: We’re going to listen.

Steven: Yeah, please do. It’ll be fun. Join in. Chat me so I know you’re there.

But hopefully we’ll see you again. If you’re busy, if that doesn’t sound good to you, or whatever, that’s okay. We’ve got plenty of webinars. We’ve got a ton of webinars coming up. So just visit our webinar page. You’ll see all that. We’d love to see you again on another session.

Like I said at the top, I’ll be sending you the slides, the recording. We’ll send contact information. Don’t worry. You’ll get that, so you’ll be able to watch this or maybe share with a colleague or a friend.

So we’ll call it a day there. Have a good rest of your Friday if it’s early on in the day for you. Have a good weekend, and stay safe, please. We’re all thinking about you. Hopefully we’ll see you again on another Bloomerang webinar really soon. See you.

Kristen Hay

Kristen Hay

Marketing Manager at Bloomerang
Kristen Hay is the Marketing Manager at Bloomerang. She also serves as the Director of Communications for PRSA’s Hoosier chapter.
Kristen Hay