Nonprofits say foundations unaware of their needs

Many nonprofit leaders say key challenges their organizations face are off the radar of foundations, which they say do not use their resources to help address those challenges, a new report says.

Nearly half of 121 nonprofit leaders surveyed by the Center for Effective Philanthropy believe foundations are not aware of their organizational needs, and over two-thirds believe foundations do not use their resources help strengthen their organizations, says the report, Nonprofit Challenges: What Foundations Can Do.

That perceived failure by foundations likely is rooted in a “crucial knowledge gap” between them and nonprofits they support with grants, the Center says.

Key needs

Nonprofits want more support in meeting demand for their programs and services, using technology to improve their effectiveness, and developing leadership skills, the report says.

Seventy-three percent of nonprofit leaders surveyed, for example, say they lack the resources to develop their leadership skills.

“That’s a huge opportunity for any foundation that wants to take the long-term view and fuel leadership development,” Ellie Buteau, vice president of research at the Center for Effective Philanthropy, says in a statement.

Barrier to openness 

The fact that only 52 percent of nonprofit leaders believe their foundation funders are aware of the challenges their organizations face may be partly the result of the “strength of relationships” that grant recipients have with their funders, and in particular their “degree of comfort with being open and honest,” the report says.

“The more likely nonprofits are to feel that they can be open with their funders about their organizations’ challenges, the more likely they are to report that their funders are aware of the challenges,” it says.

Foundations could do more

It also says the data “clearly show that nonprofits are not looking to foundations to solve all their problems,” but that they are looking for more help “and do not believe foundations are doing all they could.”

Only 36 percent of nonprofit leaders surveyed believe foundations share their knowledge about the ways other nonprofits are addressing similar challenges.

Still, on a range of common challenges, such as how to productively engage their boards of directors, and develop and train their staff, “most nonprofits are not looking for foundations’ help, the report says.

Demand for services

With a 2012 survey by the Nonprofit Finance Fund finding 52 percent of nonprofits could not meet demand for services, up from 44 percent in 2009, the report by the Center for Effective Philanthropy says over two-thirds of nonprofit leaders surveyed want more help from their foundation funders to address that challenge.

‘Leadership deficit’

And with the nonprofit sector finding it tough to attract talent, facing a potential “leadership deficit as Baby Boomers retire, and needing to develop the next generation of leaders, the report says, 73 percent of nonprofit leaders surveyed believe they “lack sufficient resources and opportunities to develop their leadership skills.”

And among nonprofits that try to influence public policy, it says, most want more help from foundations in that work.

Earned revenue

The report also says that among 85 percent of nonprofit leaders who want to maintain earned revenue, which in the sector has not grown as a share of total nonprofit revenue, an overwhelming proportion of leaders find that effort challenging.

And while 18 percent of nonprofit leaders do not believe foundations are in a position to help, most in fact are looking for more help from foundations on that issue.

Most nonprofits also find it challenging to increase their earned revenue, although 25 percent of them do not believe foundations are in a position to help them.

Big opportunity

The findings overall “indicate how much opportunity still exists for foundations to help nonprofits with some of their most difficult and persistent challenges,” the report says.

Past research by the Center for Effective Philanthropy has shown that while foundation staff “tend to be interested in providing assistance beyond the grant,” they “often do little to understand what their grantees need.”

The new survey says it “shows the consequences” of that failure on the part of foundation staff — “nonprofit leaders who do not believe foundations understand their challenges, and who are looking for foundations to do much more to help them in specific areas.”

Relationships key

Underlying much of the research by the Center for Effective Philanthropy about the work that foundations and nonprofits do together, the report says, is “the need for foundations and grantees to form strong relationships.”

Nonprofit leaders likely would not “be comfortable being open about the various challenges their organizations face if their relationships with their foundation funders do not feel strong enough to withstand that honesty,” it says.

“Clearly, foundations cannot do everything, and it is likely the case that nonprofits will always be looking for more help from funders than can be provided, given limits on staff time and resources,” the report says.

Pressing challenges

But the data also show that nonprofits “are not looking for their foundation funders to help them with everything they find challenging,” it says. “They are looking for more help to deal with some of their most pressing challenges.”

If foundations “depend on their nonprofit for the work they do to achieve their shared goals, then they will benefit from working to better understand nonprofits’ challenges and from dong more to help nonprofits address them,” the report says.

The report findings indicate that instances of foundations doing that “remain relatively few and far between.”

Todd Cohen

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