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All four primary types of grant-making foundations – independent, corporate, community, operating – are more numerous today than at any time in the past. They differ in their shares of the sum of all grant-making foundations and in their shares of total annual giving.

 

This post explores recent trends in the United States of America in the distribution of all grant-making foundations by type and by shares of total annual giving. An earlier post explored trends in the numbers of foundations making grants to nonprofit organizations.

 

Foundations by Type:

Data available via the Foundation Center’s FC Stats site indicate that during the period, 2005-2009, independent foundations increased from 88.7% to 89.5% of all grant-making foundations. Operating foundations declined from 6.6% in 2005 to 6.0% in 2009; corporate foundations slid ever so slightly from 3.7% to 3.6%, and community foundations similarly slid from 1.0% to 0.9%.

 

Distribution by Types of Private and Community Foundations
  2005 2006 2007 2008 2009
Type N % N % N % N % N %
Independent 63,059 88.7 64,405 88.9 67,034 89.2 67,379 89.1 68,508 89.5
Corporate 2,607 3.7 2,548 3.5 2,498 3.3 2,745 3.6 2,733 3.6
Community 707 1.0 717 1.0 717 1.0 709 0.9 737 0.9
Operating 4,722 6.6 4,807 6.6 4,938 6.6 4,762 6.3 4,567 6.0
Total 71,095   72,477   75,187   75,595   76,545  

 

Foundations by Annual Giving:

The Foundation Center’s data indicate that corporate, community, and operating foundations accounted for shares of total annual giving disproportionately larger than their shares of all grant-making foundations. In 2009, corporate foundations were 3.6% of all foundations, but accounted for 10.2% of annual giving; community foundations were 0.9% of all foundations, but accounted for 9.1% of annual giving; and, operating foundations were 6.0% of all foundations, but accounted for 9.1% of annual giving. By contrast, independent foundations were 89.5% of all foundations, but accounted for 71.5% of annual giving.

 

During the period, 2005-2009, independent foundations’ shares of total annual giving rose from 69.2% to 71.5% and community foundations’ shares rose from 8.8% to 9.1%. During the same period, corporate foundations’ shares of total annual giving fell somewhat from 11.0% to 10.2% and operating foundations’ shares fell somewhat more from 11.0% to 9.1%.

 

Annual Giving Among Private and Community Foundations
  2005 2006 2007 2008 2009
Type $Billion % $Billion % $Billion % $Billion % $Billion %
Independent 25.199 69.2 27.457 70.4 32.219 72.6 33.818 72.3 32.752 71.5
Corporate 3.995 11.0 4.097 10.5 4.397 9.9 4.570 9.8 4.690 10.2
Community 3.217 8.8 3.596 9.2 4.347 9.8 4.492 9.6 4.174 9.1
Operating 3.990 11.0 3.852 9.9 3.428 7.7 3.900 8.3 4.160 9.1
Total 36.402   39.004   44.393   46.781   45.778  

 

Trend Implications:

Among the implications of the trend data for cutting up the grant-making pie:

  • Independent foundations form an ever-larger slice
  • Operating foundations form an ever-smaller slice
  • Community foundations form a stable but growing slice
  • Corporate foundations form a stable but shrinking slice

 

Growth in the number of potential funders is good news for nonprofit organizations operating in the United States of America. Grant-making foundations are far more numerous than they were two decades ago – as are the nonprofits that compete for their philanthropic attentions.

 

This post examines trends in the numbers of foundations making grants to the Nation’s 1.6 million federally registered nonprofit organizations.

 

A Census of Foundations:

The Foundation Center’s FCStats database reports that:

  • In 1991, out of 33,356 grant-making foundations, 29,476 were independent, 1,775 were corporate, 1,770 were operating, and 335 were community.
  • In 2001, out of 61,810 grant-making foundations, 55,120 were independent, 2,170 were corporate, 3,918 were operating, and 602 were community.
  • In 2010 (the latest year available), out of 76,610 grant-making foundations, 68,992 were independent, 2,718 were corporate, 4,166 were operating, and 734 were community.

 

Growth Trends:

From 1991 to 2010, the total number of grant-making foundations is up 129.7%. The numbers of three types of foundations more than doubled —Independent foundations are up 134.1%; operating foundations are up 135.3%; and community foundations are up 119.1%. The number of corporate foundations is up by only 53.1% during the same period.

 

Year Total Independent Corporate Operating Community
1991 33,356 29,476 1,775 1,770 335
2001 61,810 55,120 2,170 3,918 602
2010 76,610 68,992 2,718 4,166 734

 

Later posts will explore trends in the distribution of grant-making foundations by type and trends in the distribution of grant-making foundations by their shares of total annual giving.

Corporate foundations are one of four primary types of foundation, the others being independent, community, and operating. Concentrated in nine states, they account for about 3.5% of all private and community foundations and for about 10% of total annual foundation giving. In recent years, more or less half (50%±) of corporate foundations have expected to increase their giving in a subsequent calendar year; the rest have expected either no change in giving or a decrease.

 

This post uses Foundation Center data, published in its annual “Key Facts on Corporate Foundations” series, to explore philanthropic trends among corporate foundations. Its context is the United States of America during the period 2006-11.

 

Numbers of Corporate Foundations:

From 2006 to 2010, the total number of private and community foundations increased by 4,133 (or 5.7%) from 72,477 to 76,610. Over the same period, the total number of corporate foundations increased by 170 (or 6.67%) from 2,548 to 2,718. Their share of all private and community foundations increased by 0.04% from 3.51% to 3.55%.

 

Year Corporate Foundations Private and Community Foundations
  Number Percent (%) of Total Number Total Number
2006 2,548 3.51% 72,477
2007 2,498 3.32% 75,187
2008 2,745 3.63% 75,595
2009 2,733 3.57% 76,545
2010 2,718 3.55% 76,610

 

In 2006, eight states had 100 or more corporate foundations: California (CA), Illinois (IL), Massachusetts (MA), New York (NY), Ohio (OH), Pennsylvania (PA), Texas (TX), and Wisconsin (WI). In 2008, Minnesota (MN) became the ninth state to have 100 or more corporate foundations. New Jersey (NJ) joined the list as the tenth state to have so many in 2009, but it left the same list in 2010.

 

Share of Total Foundation Giving:

From 2006 to 2010, corporate foundation giving (excluding operating foundations) held steady, varying only from 11% to 10% then back to 11% as a fraction of total foundation giving.

 

Annual Giving by Foundation Type:

During 2006 to 2010, annual giving by corporate foundations (excluding operating foundations) increased from $4.1 billion to $4.7 billion (and increased further to an estimated $5.2 billion in 2011). Total foundation giving increased from $39 billion to $45.9 billion over the same five-year period.

 

  Annual Giving by Type of Foundation
Year Independent Community Operating Corporate Total
2006 $27.5 billion $3.6 billion $3.9 billion $4.1 billion $39.0 billion
2007 $32.2 billion $4.3 billion $3.4 billion $4.4 billion $44.4 billion
2008 $33.8 billion $4.5 billion $3.9 billion $4.6 billion $46.8 billion
2009 $32.8 billion $4.2 billion $4.2 billion $4.7 billion $45.8 billion
2010 $32.5 billion $4.2 billion $4.3 billion $4.7 billion $45.9 billion

 

Forecast Changes in Corporate Giving:

During survey years 2007 through 2011 — with the single exception of 2009 — slightly more than half of all corporate foundations expected to increase their giving during the following year (i.e., in 2008 through 2012). The balance of the corporate foundations in each survey expected either to see no change in giving or to see a decrease.

 

Year of Forecast % Forecast Increase %  Forecast Decrease % Forecast No Change
2007 54% 29% 18%
2008 51% 28% 21%
2009 43% 40% 17%
2010 52% 31% 17%
2011 53% 31% 16%

 

Later posts will explore similar trends in other types of foundations.

In an era of global economic malaise, will corporations remain a reliable source of grants or other cash donations as we approach the mid-2010s?

 

This post describes how corporations give to support charitable purposes. A later post will explore several social and economic trends impacting corporate charitable giving.

 

How Corporations Give

Corporate charitable giving – including grant making – is a major component of private philanthropy. Other major components include community foundations and private foundations. Giving programs form 77.5% of corporate philanthropy; corporate foundations, as endowed by a parent corporation, form the remaining 22.5%.

 

Corporations offer support to charitable causes in many ways. Every mode of support contributes to the larger social good and thus has great value for those whom they benefit both directly and indirectly.

 

Many corporations donate products. Others provide services and expertise through their workers. Many sponsor special events or programs. Some contribute to employee donation matching programs. Still others award cash through grants or gifts.

 

Profit Drives Philanthropy

Cash donations to charity come from corporate profits. In many sectors, particularly in manufacturing and agriculture, profits are scarce as more consumers save rather than spend when faced with local and global economic uncertainties. In 2011, the median share of corporate profits given as cash donations to charity was 1%.

 

A Forecast

Corporate donation levels are likely to remain flat in 2012. A survey of leaders in corporate philanthropy revealed that 71% expected to donate no more this year than last, 2% expected to donate less, and 27% expected to donate more. In the near term, the flat donations curve does not bode all that well for organizations seeking a corporate grant or other cash support.

 

An overview of several of the larger trends affecting corporations as a potential source of cash support will appear in a later post.

 

These are the last six steps of a 12-step process for planning a proposal to win a grant from a private business or a corporation:

 

1. Structure. Prepare, edit, and proofread a one- or two-page project framework or proposal synopsis. Include more detail than in your earlier project outline, but still less than in a full proposal. Include estimates of the funds and other resources needed for the project. Identify all sources of funds, both those already in hand and those yet to be secured.

 

2. Contact. Make telephone contact with the corporate funder, if appropriate. Ask for an appointment to meet face-to-face, if feasible for both you and the contact person. Create a small team for each meeting. Whenever it seems advantageous, include on the team a well-connected and highly placed advocate or another effective spokesperson. Copy the one-page synopsis to be distributed at the start of each face-to-face meeting.

 

3. Rehearse. Review your proposed project once again, as necessary. Incorporate insights from all types of contacts with the corporate grant making or charitable giving program. Seek feedback on your revised proposal from disinterested third parties. Discuss the feedback and adjust plans based on it.

 

4. Present. Visit the corporate representatives and make a brief oral presentation. Use not more than a half hour for the entire visit. State the specific amount of your funding request and the kinds of corporate involvement or support you seek. Sell your core ideas. Listen to and record the representatives’ responses. After the meeting, immediately follow up with a personalized thank-you note. Be sure that one of your organization’s high-level executives signs it.

 

5. Develop. If invited to submit one, fully develop a proposal for your project. Include an executive summary, if possible. Adopt and use a professional business format and writing style. Reflect the requirements, expectations, and unique identity of each specific corporation in each proposal you submit.

 

6. Deliver. Present or deliver the full proposal. Use whatever mode of delivery that a specific funder prefers. Hand-deliver your proposal and make a brief oral presentation, if permitted and appropriate. Accept and acknowledge the corporation’s funding decisions with equanimity. Regardless of its decision on any given proposal, communicate a desire to maintain and build a relationship with the funder.

 

Later posts will provide extensive glossaries of terms used in writing winning grant proposals.

It can help in winning a grant to consider planning a proposal to a private business or a corporation as a 12-step process. These are the first six steps:

 

1. Search. Use a project outline or a similar device as a guide for planning and identifying a suitable project. Research corporate websites, state grant directories and Foundation Center (or other) databases for listings of corporate grant and charitable giving programs. Review tables of contents, search options, and instructions about how to use the directories and databases. Refer to glossaries, if any, to clarify term as needed. Use subject topic options and types of support options to help narrow the search.

 

2. Review. Identify up to ten prospective sources of corporate funding. Visit their websites. Consider the corporations’ sizes and locations. Focus on corporations with a presence in your city or county or state. Gauge potential corporate interest. Review each corporation’s programs and initiatives. Examine their annual reports. Look for clues about their products, priorities, and funding patterns. Consider the degree of fit between these and your project or other funding request.

 

3. Align. Match up the project with each corporate grant program. Look for potential advocates for your project by recruiting among persons who work for the corporation, persons on its board of directors, persons who use its products or services extensively, and community members. Ask among your organization’s advocates and proponents if any has personal or social connections with trustees, board members, executives, or others in key decision-making positions at each corporation.

 

4. Refine. Do further research. Use directories, databases, and corporate websites to identify each prospect’s founder, board members, and trustees. Obtain and analyze pertinent elements of an organizational chart, if available. Identify each corporation’s board members, founders, and history. Locate and review recent news articles about each corporation, particularly those about activities in its foundations and giving programs. Review program websites, annual reports, newsletters, and other publications.

 

5. Analyze. Study the information you obtain from your research. Reconsider the degree of fit of your organization and your project with each target corporation. Estimate and describe the possible benefits of your project to each corporation. Order in ranked priorities those corporations whose grant-making and/or charitable giving programs appear to have the best fit with you.

 

6. Revise. Look again at your project and funding request. Review its selling points in light of each corporation’s philanthropic and community-relations agenda. Identify ways to improve the clarity of your project’s fit with each agenda. When there is no clear fit, do not try to force one on the corporation or on your project.

 

Six more steps for winning corporate grants will appear here soon.

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