Foundation Mystique, Funding, & Support

This study validates the accepted wisdom among most nonprofits who seek foundation funding—that the foundations are aloof and isolated—rather than effective partners in the important work of community and individual transformation animating nonprofits.

1) Foundations as partners with nonprofits is noted by McIlnay:

“Foundations and nonprofit organizations are often thought of as partners in solving the nation’s problems, but the evidence shows that the partnership is troubled at best. Both parties often violate each other’s trust.

“The Metaphor of Foundations as Partners.

“Foundations and nonprofits are an alliance in the search for solutions to society’s problems, according to this metaphor. But though foundation rhetoric often agrees, the analogy is not especially true because the association is asymmetric: foundations have the money and applicants do not. The metaphor of foundations as partners, therefore, like the metaphors of foundations as activists and entrepreneurs, is more perception than reality.

“The imbalance of power gives foundation philanthropy a mystique that is difficult to penetrate and causes considerable apprehension and intimidation in nonprofits, contributing to their perception of themselves as subservient to foundations. There is power in making grant decisions and a certain arbitrariness as well; some grantseekers believe that the more freedom foundations have, the more that prejudice and even abuse enter the decision-making process.” (pp. 150-151)

McIlnay, D.P. (1998). How foundations work: What grantseekers need to know about the many faces of foundations. San Francisco: Jossey-Bass.

2) An excerpt from the press release announcing the study about foundations.

“A new report from the Center for Effective Philanthropy (CEP) finds that nonprofits do not perceive funders to have communicated their responses to the economic downturn clearly, if at all. They also report that funders have offered them little useful help in responding to the challenges of the downturn.

“CEP began asking grantees about their funders’ communications and helpfulness in response to the downturn in the last half of 2009. A Time of Need: Nonprofits Report Poor Communication and Little Help from Foundations During the Economic Downturn, analyzes data gathered from surveys of over 6,000 grantees of 37 foundations.
• Thirty percent of grantees indicated that there was no communication from their funders about their own response to the economic climate, and of those that did report receiving communication, 22 percent indicate that the funder’s response was unclear.

“These findings are sobering,” says Ellie Buteau, vice president – research. “This is almost three times the number of grantees that rate other communications from their funder as unclear.”
• Buteau and research analyst Shahryar Minhas, the report’s co-authors, also found that a full third of grantees surveyed indicated that their funders had not helped them at all during the downturn.”