Foundations prefer to go their own way

Private foundations typically do not collaborate with one another, like to find their own grantees and stick with them, prefer not to push their agendas on grantees, and prefer financial returns to investments that advance their mission.

Those are some of the findings of a survey of 198 private foundation donors that are clients of Foundation Source, a provider of support services for private foundations. Results were based on responses from 198 donors, most with private foundations with less than $50 million in assets.

Only 1 in 4 private foundations say they collaborated on their philanthropy with other foundations over the past year and plan to continue collaborating, while 54.3 percent say they did not collaborate with other foundations over the past year and have no plans to.

Just over 1 in 5 say they did not collaborate but plan to in the near future.

Only 7.9 percent of foundations say they mostly fund organizations that submit proposals and requests, while 85.6 percent say they mostly find and choose on their own the organizations they support.

And nearly two-thirds of foundations estimate that at least 75 percent of their annual grantmaking goes to organizations they have supported in the past.

Only 22.5 percent of respondents say foundations should “direct nonprofits to carry out the foundation’s own vision and ideas,” while 77.5 percent say foundations “should support nonprofits without telling them what to do because it negates the value of nonprofits’ ‘on the ground’ knowledge.”

On investing their assets, 53.9 percent of foundations say getting the greatest return on investment is of primary importance, while 46.1 percent say choosing investments that advance their mission is the top priority.

Nearly half of foundations typically provide general support to nonprofits without restrictions.

In determining whether to make a grant, 37.4 percent of foundations say personal knowledge of a nonprofit or previous experience with it is the most important factor, while 25.6 percent say the main factor is  “clear evidence of demonstrable impact.”

And 96.4 percent of foundations characterize as “fair” or “excellent” the way nonprofits are run.

Todd Cohen

2 responses

  1. My guess is that a majority of the respondents represent small unstaffed or lightly staffed funders. The proportion of medium to large private funders working with other funders probably is 80% or more. And very few(less than a handful) funders of size don’t have a formal application process of some kind. Same for the idea that funders should or shouldn’t have a strategic vision. Very few funders of any size can justify random grantmaking without any larger purpose.

  2. I see this as a wonderful opportunity for Community Foundations. Because their track record is secure, they could incorporate the mission and vision of these smaller entities into their planning for these foundations, and offer the administration of the funds as the reward. OR the Community Foundation could offer to take over the fund as the current owners passed away, incorporating it into their estate planning. The Community Foundation could be the solution to “What will happen once I’m gone?”
    (not affiliated)

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