Did you know that in 2009, over 38,000 family foundations – with more than 1,000 in California alone – accounted for 62% of all independent foundation giving? Despite this impressive statistic, many of us have limited knowledge of family foundations, how they operate, and what criteria they use to make grants.

In an effort to demystify the world of family foundations and provide Project Leaders with advice on seeking them out as a funding source, Community Partners convened representatives from three foundations - the Rosalinde and Arthur Gilbert Foundation, Herb Alpert Foundation, and the Roth Family Foundation - at a panel discussion just a few short weeks ago.

After a very insightful and honest discussion, project leaders in attendance came away with the following information and advice:

What are family foundations? Family foundations, although classified as private foundations by the IRS, are given the “family” distinction because at least one member of the family from which the endowment comes has a role in the foundations' governance. The areas they fund most often reflect the wishes and interest of the family.

The Proposal Process. Even though the proposal process differs by foundation, it is important to keep in mind the following tips when approaching a foundation for funding:

1. Build relationships. Since many organizations do not accept unsolicited proposals and/or have unclear guidelines, all three panelists encouraged prospective applicants to build relationships with foundation staff. They recommended attending workshops and panels featuring family foundations; researching the interests of the trustees; researching past grantees of the foundation. Find a way to make contact – either in person or by phone or email - in a respectful manner. Having a dialogue is much more effective than trying to guess what a foundation wants.

2. Know the landscape in which you operate. By virtue of their position in the sector, foundations have a bird’s eye view of the areas they fund. Often times, they see projects and organizations that fail to understand and explore the nonprofit environment around them. The panel emphasized the importance of knowing the field and recognizing that other nonprofits may do similar work in the community. Do your research and avoid statements like “We are the only organization to serve this community.” The goal is to know exactly how your project contributes to the landscape and identify potential opportunities for collaboration.

3. Be specific. Avoid general requests and broad statements when describing your project in a proposal or letter of inquiry. Provide the foundation with a detailed sense of what your organization is doing. The panelists lamented the number of times they see statements like our curriculum improves art education or we serve 40,000 kids daily without elaborating what the curriculum is or how the kids are served. If you plan on using evaluative metrics, be sure to accompany your facts and figures with details of how you are serving the community and real stories of those who have benefited the most from your services.

4. Know your audience. When writing your proposal, take into consideration your audience. It is most likely safe to assume that a foundation that funds programs addressing education will also know a lot about the issue. Don’t waste too much time or space explaining the issue your program is trying to address.

5. Organizational strength matters. Family foundations, like other grantmakers, will look at various aspects of your organization: the board, staff, and sound financial development and management. Family foundations see their grants as investments not only in a specific program, but in an organization as a whole. One panelist stressed the importance of strong boards and board buy-in as a indicator for sustainability; Whether its $25 or helping to develop build membership, are all board members contributing in some way? Foundations want to see signs of full board commitment and solid governance.

After the proposal or letter of inquiry:

1. We got a grant! What should we expect from the foundation? The level and extent of a relationship with a foundation depends on both the organization and foundation. Strong organizations may require less involvement and occasional check-ins over the course of the grant. New grantees and those with risky but ambitious programs may require more frequent communication with foundation staff.

2. Walk away. This might sound foolish at first, but from the perspective of one panelist, if the expectations for an awarded grant are too high and your organization lacks the capacity to fulfill the requirements, it is good to respectfully decline the funding and explain why. Saying no to funding may further pique the interest of the funder and improve your chances of getting a more favorable grant the next year.

3. Rejection. Panelists encouraged Project Leaders to see rejection as an opportunity; an opportunity to engage the grantmaker in conversation and build a relationship. If your organization’s proposal or letter of inquiry was not accepted, but you program does align with the foundation’s focus, try to establish and maintain a relationship with the foundation and work on improving your project and proposal for the following year. If your proposal was not a good fit for the foundation, you should still pursue a meeting with foundation staff and gain leads on other foundations and resources.

Ultimately, be mindful that each foundation is different and that it is important to do your research, build relationships, and strive for excellence at your organization.