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Foundation funding of grassroots organizations

Robert O. Bothwell


Robert O. Bothwell is the founding Director/President Emeritus/Senior Fellow for the National Committee For Responsive Philanthropy, a 25-year old organization dedicated to changing private philanthropy to be more responsive to social justice and environmental organizations.
This paper is presented as part of the Working Papers series for COMM-ORG: The On-line Conference on Community Organizing and Development. Copyright is held by the author. To cite, use: [author] [date] [title], paper presented on COMM-ORG: The On-Line Conference on Community Organizing and Development.
http://comm-org.utoledo.edu/papers.htm.
 


September 20, 2000
National Committee for Responsive Philanthropy, Washington, DC, Email <bob@ncrp.org>, Telephone: 202-467-4495, 1710 Rhode Island Ave. NW, 4th Floor, Washington, DC 20036

 

TABLE OF CONTENTS

Summary
Introduction
What is truly important about Grassroots Organizations
Methodology
The Characteristics of Those Interviewed: Grassroots Organizations
The Characteristics of Those Interviewed: Foundations
Findings and Comments
BOX: What would be the major positive impact on the grassroots organizations of additional foundation grants?
BOX: Why don't grassroots organizations get more foundation dollars?
BOX: Why do some grassroots organizations get funded and others not?
BOX: The grassroots describe their "best" relationships with foundations
BOX: Foundations describe their "best" relationships with the grassroots
BOX: The grassroots describe their "worst" relationships with foundations
BOX: Foundations tell of their "worst" relationships with grassroots organizations.
 
Recommendations
Foundations 
Grassroots Organizations 
 
Acknowledgments
References 
Endnotes 
 
Appendices  
Appendix A: Academic advisory committee and other contacts who identified "Authentic Grassroots Organizations"
Appendix B:
Examples of major activities of grassroots organizations interviewed.
Appendix C:
Profiles of grassroots organizations interviewed.
Appendix D:
Profiles of foundation funders interviewed. 
Appendix E:
Structured interview questions for grassroots organizations
Appendix F: Structured interview questions for foundations 

SUMMARY

According to grassroots scholar David Horton Smith, there are 7.5 million grassroots associations in the U.S. (compared to two million paid staff nonprofits). He states that "Associational participation is a major engine of democratic participation."

J. Craig Jenkins and Abigail Halcli have studied foundation funding of progressive social movements. They found that foundations commit only 1.1% of all their grants to such movements. Only 1/6 of these foundation grants (0.2% of all foundation grants) go to indigenous social movement organizations. The data are from 1990, but there are no more current data from academia, and The Foundation Center does not classify grants for social movements nor grassroots organizations.

Emmett Carson asks, "...why has institutional philanthropy, widely believed to be the primary source for venture capital for new and controversial ideals, apparently not fulfilled this role in the area of social justice advocacy?"

Indeed, why don't grassroots organizations receive more foundation money? What could foundations do differently to get more money into their hands? And what could grassroots organizations do differently to obtain more foundation money? These are the central questions addressed in this study.

To obtain answers to these questions, 48 people were interviewed by telephone. Leaders of 26 grassroots organizations were interviewed, as were 22 foundation executives at 21 foundations. Structured interview questions were used with all interviewees, encouraging open ended responses to most questions.

"Authentic grassroots organizations" were identified as such by 12 academic and community consultants around the U.S. These academicians and community consultants were selected as people known to have studied or worked closely with grassroots organizations.

The foundations interviewed were selected from the 20 in Jenkins and Halcli's study which made the most grants to indigenous social movement organizations and the 20 which made the least, though at least one grant each.

The overwhelming majority of grassroots organizations do not think they receive an "adequate" level of support from foundations. Half the foundations interviewed agree.

To create a "major positive impact" on their organizations, grassroots leaders say they need a substantial increase in their current foundation grants. The median amount cited is a doubling of their foundation income (i.e., 100% increase). Foundations think a 250% increase is necessary.

Two-thirds of the grassroots organizations believe they do not get an adequate level of core or general operating support from foundations.

Grassroots groups with paid staff, or with mixed paid staff and volunteer staff, are much more likely to obtain foundation grants than organizations with just volunteer staff, or with no staff, only a volunteer board of directors.

Grassroots leaders principally blame foundations for denying them more foundation money. Foundations essentially agree. However, grassroots leaders also see themselves as part of the problem, though to a lesser extent. Foundations agree.

Grassroots proposals for funding often get turned down, according to grassroots leaders, because of incompatible foundation guidelines, arbitrary decisions and ignorance of grassroots organizations.

Asked to characterize their worst or most disappointing relationships with foundations, they talk about problems during the application process, the lack of institutional consistency, and the arbitrary and unilateral nature of the foundation decision-making processes.

While grassroots organizations principally blame foundations for denying them more foundation grants, they also see themselves as part of the problem -- though to a lesser extent. Foundations agree.

When asked why they get foundation funding, grassroots leaders cite three basic reasons: Relationships matter, their track records and capacity are important, and their organizations fit with foundations' programs.

Foundation leaders make more varied responses when asked why they give grants to some grassroots groups and not to others. Foundations cite the same three basic reasons that grassroots groups do. But foundations identify four additional important rationales that none of the grassroots leaders mention: The nature of proposals and plans, involvement in networks, community base, membership and non-grant income, and foundation processes.

Nevertheless, nearly half the grassroots leaders expressed quintessential partnership feelings about their relationships with foundations. Foundation leaders (60%) also think in these terms.

Asked to characterize their "worst or most disappointing" relationships with foundations, grassroots groups talk about problems during the application process, the lack of institutional consistency, and the arbitrary and unilateral nature of foundation decision-making processes.

Asked to "describe their worst or most disappointing relationship with a grassroots organization," foundations identify grantees who keep key information a secret, lie to them, steal grant funds, and do not deliver programmatically.

The report concludes with recommendations from the interviewees for both foundation and grassroots action to increase foundation funding of grassroots organizations.

 



INTRODUCTION

"While there are numerous examples of the innovative leadership provided by foundations to support the development of hospitals, libraries, education, arts and culture, and scientific research, foundations have not shown the same risk tolerance in the area of social justice advocacy," writes Emmett D. Carson. "Foundations have focused only a small amount of their total grant monies on programs directed at helping people of color or on advocacy-related social justice activities," he adds (p.248).

In summarizing the findings of detailed studies of ten of the 50 largest community foundations, Sally Covington reports, "...in eight out of the nine foundations for (which) these data were gathered, at least four out of every five grant dollars distributed for the primary benefit of low income groups, racial or ethnic minorities, women, the disabled, lesbians or gay men, and other victims of discrimination was given to organizations that were not controlled by these communities." Covington adds, the "community foundations' leadership activities were developed and implemented largely in isolation from the people these initiatives were designed to assist" (p.8).

"Based on historical and contemporary studies of large mainstream private foundations," Susan Ostrander writes, "the likelihood of their providing meaningful levels of support to social movement activity...seems slim" (Ostrander, 1994, p.31).

According to a study by J. Craig Jenkins and Abigail Halcli, foundations commit only 1.1% of all their grants to progressive social movements. By "social movement" they mean "a collective attempt to organize or represent the interests of a previously unorganized or politically excluded group." Included in "progressive social movements" are organizations advocating for racial/ethnic minorities, economic justice, women's rights, children's advocacy, gay/lesbian rights, peace and world order, environmentalism and consumer rights.

Only 1/6 of these foundation grants (0.2% of all foundation grants) go to indigenous social movement organizations (Jenkins and Halcli). The data are from 1990, but there are no more current data from academia, and The Foundation Center does not classify grants for social movements nor grassroots organizations.(1)

As the 1990s stock market propelled foundation assets to a record high of $385 billion (1998) (Renz, Lawrence and Kendzior), private foundations have been legally required to pay out annually much more than required in 1990. One might think this would mean a major increase in mainstream foundation grants for social movements. But ad hoc information suggests otherwise.(2)

Carson asks, "...why has institutional philanthropy, widely believed to be the primary source for venture capital for new and controversial ideals, apparently not fulfilled this role in the area of social justice advocacy?" (p.269)

Indeed, why don't grassroots organizations receive more foundation money? What could foundations do differently to get more money into their hands? And what could grassroots organizations do differently to obtain more foundation money? These are the central questions addressed in this study.

What Is Important about Grassroots Organizations?
Why Should We Care about Them?

According to grassroots scholar David Horton Smith, there are 7.5 million grassroots associations in the U.S. (compared to two million paid staff nonprofits) (1997a, p. 118-119).

He writes that "Members (of grassroots associations) learn democracy directly from participation in (their) associations, partly because nearly every grassroots association sometimes gets involved in public affairs/issues when they are relevant to continued...association existence and/or to specific...association goals (e.g., health, education.)" (1997b, p.278).

"In their path-breaking book, Verba and Nie (1972) show rather conclusively, for their U.S. national sample data, that associational 'affiliation has a positive effect on political participation over and above the social and psychological factors that lead to political participation' (p.198)" (Smith, 1997b, p. 286).

The results of a study by Gamson (1990) of a representative sample of 53 social movement groups or "challenging groups" during 145 years of American history, according to Smith, were that "about half these challenging groups achieved new advantages for their target populations (which might have been the group members themselves and/or others). Thus, half of a random, representative sample of larger scope social movement groups in American history (1800-1945) were able to change American society in the direction they sought to a significant degree..." (Smith, 1997b, p.291).

"Grassroots associations are the bedrock of the theory of citizen participation in democratic society (Pateman, 1970). Such groups are how citizens can participate most meaningfully in political decision making in a democracy. Verba and Nie (1972) state, 'Participatory acts [including associational participation] are, we believe, the major means by which citizen preferences are communicated to government, and participation has a highly valued status in democratic theory for this reason' (p.284)....Without a flourishing nonprofit sector, particularly the associational segment, a healthy democracy is impossible. Provision of citizen participation opportunities in a participatory democracy is an important impact of grassroots associations (Schlozman & Tierney, 1986; Verba, Schlozman & Brady, 1995). Sills (1968) argues further for the related impact that grassroots associations distribute power in society, spreading it around so more people have access to it" (Smith, 1997b, p. 293).

Richard A. Couto agrees, based on his study of 24 community organizations in Appalachia. He concludes, "An increase in local social capital goods and services and moral resources appears first and foremost on the list of successes of community-based (organizations)" (p.279). "...some form of leadership development" is part of "all serious efforts at community change,...although the methods vary from organization to organization..." (p.284). He uncovered "new forms of participation and trust in networks of influence and resources" constructed and/or entered by these community organizations, and "the subtle social capital of network infiltration means political participation" (p. 279).

Smith maintains that "...all kinds of grassroots associations are to some significant extent potentially political and part of the process of maintaining a participatory democratic society. Specific major changes in the broad sweep of American history have been the result of various women's groups on women's rights,...abolitionist groups for the eventual abolition of slavery in the 1860s (Aptheker, 1989), civil rights groups for minority rights legislation in the 1960s (Blumberg, 1991), antiwar groups for the ending of the Vietnam War in the early 1970s (Chatfield, 1992), gay and lesbian rights groups for recent nondiscrimination legislation (Adam, 1987), children's rights groups for recent protective legislation (Hawes, 1991), and so on for many other egalitarian changes in our history" (Smith, 1997b, p.294).

Against this backdrop of accomplishment, grassroots organizations take on another major significance when considering Lester M. Salamon's "critique of professionalism" in the nonprofit sector that he claims "has gained increased force in recent years" (p.39). He quotes John McKnight saying, "'Through the propagation of belief in authoritarian expertise, professionals cut through the social fabric of community and sow clienthood where citizenship once grew'" (McKnight, p.10). Salamon elaborates, "Not only does this undermine community, but it also typically fails to meet the need. Far from fostering social capital and building a sense of community,...nonprofit organizations, by embracing professionalism, have become an enemy of community instead" (Salamon, p.39). Without their professionalism, grassroots associations offer greater hope to community than professionalized nonprofits.

Describing grassroots organizations engaged in community organizing, Susan Ostrander, co-chair of the Women's Funding Network, says they build community, develop leadership and educate for social justice. She notes that "Creating connection and community is seen as a way to 'sustain and nurture...political activism' (Naples, p.15); and as a strategy for 'teach[ing] others how to win their [own] collective rights' (Kaplan, p.180)"...also how "Educating about root causes and just solutions as part of organizing for social change...[involves] 'transformation of consciousness through empowerment' (Kennedy and Tilly, p.302)" (Ostrander 1998, p.5).

Writing about the work of organizations focused on immigrants' rights, gays and lesbians, disabled people and people of color, organizer Gary Delgado says, "...the ground-breaking work, the innovation, the experimentation, and the motivating livid anger that comes from the truly oppressed is at the heart of (their) work..." (p.7).

Smith concludes that "Individual grassroots association activity...tends to support participatory democracy and a civil society more broadly and also fosters the idea of service to others inside and outside one's grassroots association...In simple terms, essentially local or grassroots associational participation makes people more likely to get involved in other kinds of individual democratic political participation. Associational participation is a major engine of democratic participation...Grassroots associations of all kinds make us a democratic society in a basic way....Cumulatively, grassroots associations have a very substantial effect on American society and on the lives of its citizens" (1997b, p.296).


METHODOLOGY

To obtain answers to the questions posed above, 48 people were interviewed by telephone. Leaders of 26 grassroots organizations were interviewed, as were 22 foundation executives at 21 foundations.

"Authentic grassroots organizations" were identified as such by 12 academic and community consultants around the U.S. (See Appendix A for the list.) These academicians and community consultants were selected as people known to have studied or worked closely with grassroots organizations. Each was asked to identify three such organizations, and nearly half named additional ones. A total of 50 grassroots organizations was identified.

Each of the 50 organizations was called to conduct or schedule an interview with either the chief executive of the organization or the person suggested by the academic or community consultant. Those that were unavailable initially were repeatedly called. In the end, 26 organizations agreed to be interviewed, and were in fact interviewed, by phone.

The foundations selected were the 20 in Jenkins and Halcli's study which made the most grants to indigenous social movement organizations and the 20 which made the least, though at least one grant each. This author believed that the former would have the greatest understanding of the issues facing foundation funding of grassroots organizations, while the latter -- having funded at least one grassroots organization -- might have something to contribute to the research, particularly in contrast to those who frequently funded indigenous social movement groups (Patton). Jenkins and Halcli's study of foundation funding of social movements in 1990 was utilized to identify foundations to interview because there has been no subsequent study produced by academia which offered a better starting point.

All 40 foundations were contacted repeatedly by telephone or letter, except for a few for which no addresses or phone numbers were available after checking several directories in The Foundation Center library in Washington, DC. These calls and letters resulted in 21 foundations being interviewed: 14 of those making the most grants to indigenous social movement groups, and seven of those making the least grants for this purpose, though at least one grant each.

Foundations which had made no grants at all to indigenous social movement organizations - though they may have made grants for non-indigenous social movement organizations - were excluded from the study. The author believed that the lack of involvement of these foundations with grassroots social movement organizations would preclude them from providing understanding and practical guidance for foundation funding of grassroots groups.

Structured interview questions were used with all interviewees, encouraging open ended responses to most questions. The interview protocols were as similar as possible for both grassroots and foundation interviewees to allow for comparison of answers. Each interview took an average of 39 minutes. There was only about four minutes difference between the average interviews with foundation officials and grassroots organization leaders; the foundation interviews lasted longer.

Answers to each interview question were tracked according to the two categories of foundations identified above and reported as differences among the foundations only when the differences were large (Patton).

Responses to each question on the foundation interview protocol were compared, grouped according to commonalities, revisited for consistency within each grouping, reassigned as appropriate, and tallied. The same was done for each question on the grassroots interview protocol. The two sets of qualitative and quantitative data were then compared for each similar question. Analytic categories/groupings were chosen to best illustrate significant differences among the answers, but were arbitrary based on the author's knowledge of the field.


The Characteristics of Grassroots Organizations

David Horton Smith defines "grassroots associations" as locally based, significantly autonomous, volunteer-run, formal, nonprofit groups with official memberships of volunteers that manifest significant voluntary altruism. Many are "only semi-formal and most are not formally incorporated as separate entities" (1997a, p.115). Smith adds that some grassroots associations have paid staff -- "at most one or two" - even if "generally (they) have no employees" (1997a, p.124).

To some people, "grassroots organization" strictly means a local, community-based organization with strong connections to residents of a neighborhood. To others, the term can include city-wide organizations with solid participation from many city residents. To still others, "grassroots organizations" can be state-wide or even national (like ACORN, Greenpeace and the Sierra Club), but again, with strong participation from many within the geographical boundaries.

Delgado says community organizations nowadays often go beyond geographical boundaries to "identity and interest" (p.7). They can be communities of color, associations of immigrants, of gays and lesbians, of disabled people, to whom neighborhood, state and even national boundaries are meaningless.

The "authentic grassroots organizations" identified for inclusion in this study range from Smith's arch-typical volunteer groups to organizations Smith would contrastingly label as "paid staff nonprofits," state and national groups and Delgado's community organizations of "identity and interest." According to the 12 academicians and community consultants who identified the 50 organizations initially considered for this study, each organization has characteristics which mean a "grassroots" grounding to them, even if paid staff are employed.

What is the scope of the 26 grassroots organizations surveyed? Three are national, five are state-based, and 18 are local.

Where are these grassroots organizations located? Four geographic regions are represented: West Coast (CA, NM & OR) 5 ½ organizations, Midwest (IL, MI, OH, IN & IA) 10, Southeast (FL & TN) 4, and Mid-Atlantic/Northeast (DC, NJ & NY) 6 ½.. (The two ½ organizations are actually one organization with key offices in DC and OR).

How strongly rooted are they in their communities? How many members do they have? According to McPherson (1983), as reported by Smith, "most" grassroots associations have "far less than 50 members" (1997a, p. 116).

For the local organizations in this survey, the number of members in each organization ranges from 7 to 516, the average 75, the median 20. For the state-based and national organizations, the member range is 10 to 45,021, the average 6418, the median 757.

How many volunteers work for them? The number of volunteers per month for the local grassroots organizations is zero to 200, the average 35, the median 14. For the state-based and national organizations, the range is zero to 3300, the average 426, the median 5.

How many of the grassroots organizations interviewed are classified as 501c3 by the IRS? What is the status of the non-501c3 organizations? Of the 26 organizations interviewed, 21 are 501c3. Two others have 501c3 affiliates that collect foundation money for some of their activities (one is a 501c4 organization, the other is simply incorporated under state law with no IRS classification). Another is also incorporated under state law, with no IRS classification. The last two are unincorporated.

How many staff work for them? For all 26 organizations interviewed, the range of full-time-equivalent (FTE) staff is from zero to 240. For the 21 501c3 organizations, 504 FTE staff work for them. But excluding the two giant organizations with annual budgets of $9 million and $10 million (which have 314 FTE staff between them), only 190 FTE staff work for the other 19 501c3 groups, an average of 10 ½ each. The non-501c3 organizations average five FTE staff each.

Noted earlier, Smith says that some grassroots organizations have paid staff -- "at most one or two" -- even if "generally (they) have no employees" (1997a, p.124). According to Delgado, the "average staff size for a local community organization is four people" (p.13). The organizations surveyed here, therefore, are, on average, larger than the grassroots organizations of Smith and the community organizations of Delgado.

On what major public issues do the grassroots organizations surveyed focus their energies? All 26 organizations surveyed identified their major issues:

16 are working on children's advocacy (especially for low income children); rights and opportunities of women, racial/ethnic minorities (including Appalachian rural whites, Middle Easterners, foreign born and immigrants as well as the major groups) and gays and lesbians; and cultural/community development.

14 groups are focusing on urban economic development/renewal; housing; basic neighborhood issues (such as crime, violence, drugs, gang prevention, youth alternatives, parks and recreation, welfare reform, living wage); health; education; and workforce development.

8 grassroots organizations are concentrating on the environment.

3 work on peace, world order and human rights.

Most of the organizations are seeking to make an impact on several different issues, very few are single issue organizations.

How do the grassroots organizations function? All 26 grassroots organizations identified their major activities. The number to the left below indicates how many organizations were involved in each activity.

17 - Community organization and leadership training.

16 - Educational programs (ranging from newsletters to computer classes, parenting training, immigrants rights workshops and seminars on flower arranging).

15 - Public policy advocacy (including lobbying and public education for administrative and legislative changes).

14 - Public education through media, other public communications (no lobbying).

13 - Other community services (ranging from job training and counseling to developing low income and affordable housing, emergency food bank, day care centers and women's leadership activities).

9 - Research/policy development (domestic violence and immigration; student research; other).

5 - Legal services/litigation.

3 - Other (economic development; developing collaborations between faith community and community development organizations; housing and small business development).

See Appendix B for a more complete listing of the major activities undertaken by the grassroots organizations included in the study.

What is the current funding of the grassroots organizations surveyed? The 26 grassroots groups surveyed have total annual revenues ranging from $1500 to $10 million. Average revenues are $1.2 million. Their median revenues, however, are but $367,000. Excluding two huge groups raising $9-10 million each, who little resemble the others, the average total annual revenues for the other 24 groups surveyed are only $555,000, the median $350,000.

GRASSROOTS ORGANIZATIONS' ANNUAL REVENUES
Range Average Median
All 26 Interviewed $1500-$10 million $1.2 million $367,000
24 Organizations, excluding the two $9-10 million orgs. $1500-$2.3 million $555,000 $350,000

Smith reports that "Grassroots associations generally tend to have...small annual budgets (usually much under $25,000 per year)" (1997a, p. 124). His study of 51 grassroots associations in one suburb indicated that they had average annual revenues of $7805, median $2000 (1997a, p.125).

According to Delgado, the "lack of resources" is a major limit of community organizations. "The...budgets average in the $120-160,000 range" (p.13).

The grassroots organizations included in this study then are much larger than the grassroots associations in Smith's one suburb, and somewhat larger than the community organizations with which Delgado is familiar, though his budget numbers were from 1992, and this study's numbers are circa 1999.

How much of their revenue is from foundations? The foundation grant revenue for all the grassroots organizations ranges from zero (four groups) to $3.6 million. The average is $407,000, but the median is half that at $212,500. As a percentage of total revenue, the grassroots groups' foundation grants range from zero to 95%. The average is 40%, the median 41%.

GRASSROOTS ORGANIZATIONS' FOUNDATION GRANTS
Range Average Median
All 26 Interviewed Zero-$3.6 million $407,000 $212,500
% Annual Revenues Zero-95% 40% 41%
24 Organizations, excluding the two $9-10 million orgs. Zero-$1.2 million $272,000 $200,000
% Annual Revenues Zero-95% 42% 47%

What was their proportion of governmental income? It ranged from 0% to 99%, the average being 22%, but the median is 1%.

See Appendix C for more information about the grassroots groups interviewed for this study.

The Characteristics of Those Interviewed: Foundations

To repeat, the foundations selected for inclusion in this study were those in Jenkins and Halcli's research which made the most grants to indigenous social movement organizations and those which made the least, though at least one grant each. There were 14 interviewed from the first category and seven from the latter.

What are the grants of the foundations interviewed? The 21 foundations interviewed have annual grants ranging from $90,000 to $388 million (circa 1997). Average grants are $26.5 million (a misleading number as only two foundations have more than this amount); the median is $1.9 million (a better indication of who was interviewed). Excluding the Ford Foundation ($388 million), the average grants are $8.4 million, the median $1.85 million.

What are the assets of the foundations surveyed? The 21 foundations included in the study have assets ranging from $100,000 to $9.6 billion. Average assets are $643 million, the median $24.5 million. Excluding the Ford Foundation ($9.6 billion), the average assets are $172 million, the median $23 million.

Compared to all 42,000 grant-making foundations in the U.S., larger foundations by both assets and grants are over-represented in this study. Foundations with assets under $10 million or grants under $100,000 per year are under-represented.

What are other salient characteristics of the foundations studied? Of the 21 foundations, 15 are private foundations, two are church organizations and four are public foundations. The private foundations have 99.7% of the assets of the foundations in this study. The church organizations and public foundations each have an average of only $9 million in assets.

See Appendix D for more information on the foundations included in this study.

FINDINGS & COMMENTS

The overwhelming majority of grassroots organizations do not think they receive an "adequate" level of support from foundations.

No definition of "adequate" was provided to any of those interviewed. They were asked to supply their own definitions.

Six of the 26 grassroots organizations believe they currently receive adequate funding from foundations.

The rest respond to the question about adequate funding with answers ranging from a simple "no" to "absolutely not." One added that "There's certainly more work we could do if we had more dollars." Another added, "We need a lot more." (Throughout this report, comments from people interviewed will be in Italics.)

Susan Ostrander has written of "the...decline in the role of the state" which requires "women to turn more and more to alternative sources to support the work of creating change" (1998, p.1). Grassroots groups of all types have had to face this situation.

Ostrander adds, "Activists, practitioners, and scholars alike recognize that obtaining funding -- especially for organizations that engage in advocacy or organizing for change -- is 'one of the most vexing problems' that nonprofit organizations face (Reinelt, p.85)," adding further that "the amount of time and energy that it takes to deal with...'a bewildering array of money sources' as a condition of keeping an organization alive is considerable (Gronbjerg, p.22)" (Ostrander, 1998, pp.2,8).

Half the foundations interviewed agree that grassroots organizations do not receive an "adequate" level of foundation support.

However, the other half of the foundations interviewed think grassroots organizations do receive adequate support, at least from the limited resources of their own foundations.

Foundations are torn between knowing that the grassroots organizations' needs are great, but that foundation resources - especially their own - are so limited.

One says unequivocally, "No one provides adequate support." But other foundations speak more of their limitations: "The demand is much greater than our dollars." "We give 90% of our grant-making budget for grassroots organizations. We couldn't provide any more." "We provide a level of support reflective of the size of our endowment and staff." "We provide adequate support given our program goals."

A clear majority of the grassroots organizations believe that responsibility to expand foundation grants to grassroots organizations is 50% theirs and 50% foundations.'

Yet, few of the foundations surveyed think the deal is 50:50.

Half the foundations interviewed believe that grassroots organizations have greater responsibility to expand foundation dollars to grassroots groups. (After all, they say, grassroots organizations' survival and effectiveness are at stake.)

But the reverse is felt by one-third of the grassroots organizations, who think that foundations have decidedly more responsibility to expand funding for grassroots groups. ("They have the money and the power," as one grassroots leader succinctly puts it.) Many foundations agree.

To create a "major positive impact" on their organizations, grassroots leaders say they need a substantial increase in their current foundation grants. The median amount cited is a doubling of their foundation income (i.e., 100% increase).

Foundations think a 250% increase is necessary.

The median 100% increase in foundation grants desired by grassroots organizations would be a 43% expansion in their total annual revenues from all sources. This is a modest desire, by any standards. By contrast, the 250% increase in foundation grants that foundations think grassroots organizations need would be a doubling of the organizations' total revenues.

Grassroots groups and foundations differ widely among themselves over how much foundation grants should be increased. Grassroots organizations want from zero increase to over 100 times current foundation dollars. Foundations suggest a lesser range -- from a zero increase to 20 times existing grants.

The foundations which frequently fund grassroots groups are much more generous in wanting to increase foundation grants to the grassroots than the foundations which only infrequently fund them. Perhaps the former see the need more clearly.

A "major positive impact" on the grassroots organizations by additional foundation grants would be quite different things for each organization, though there are commonalities.

Half the organizations say that hiring additional staff or keeping staff would be the major impact. Some don't go beyond this simple thought. Most, however, talk about how more staff will "strengthen program," expand their program, help them "gain momentum," increase their "organizational base," do foundation development, undertake research, expand the number of issues on which they work, and much more.

For a couple organizations, the impact might be to create a cash reserve. Another two organizations talk about stabilizing their organizations with the extra money, not having to worry about replacing a current huge grant that terminates, or always hustling to replace several expiring grants.

Or they might be enabled to meet their strategic plans for growth and the concomitant budget.

A couple organizations talk about implementation of ambitious specific plans on the books, including impacting the whole community in ways they have only dreamed of.

See the box on the next page for grassroots leaders' own comments on what major positive impact additional foundation grants would have on their organizations. The findings preceding have been closely drawn from these comments.

 

What would be the major positive impact on the grassroots organizations of additional foundation grants?

Hire/keep staff

  • Hire support staff.
  • Hire an Executive Director.
  • Enable organization to keep staff, since our state money has disappeared.

 

Hire staff and expand program

  • Hire additional staff to strengthen program; gain momentum.
  • Expand the number of organizers on staff, thus, expand our organizational base and the number of issues we work on; do foundation development.
  • Hire full-time organizer focusing on social justice for every one of our eight neighborhoods.
  • Phenomenal! Hire full-time counselor; hold many more self-improvement classes; initiate self-esteem program for teens; conduct many more seminars.
  • Hire consultants for research and business plan development; renovate and upgrade our facilities; buy vehicles to transport senior citizens.
  • Enormous! Hire development staff; hire media assistance to work with our constituencies; pay staff raises; set up a retirement program; do more staff training.
  • Be involved in issues we know, but, for one reason or another, are not now involved.

Create cash reserve

  • Have a cash reserve of more than three months operating revenues.
  • Create endowment to produce interest income and be a cash reserve.

Stabilize the organization

  • Replace the huge grant expiring this year.
  • Eliminate the need for us to hustle 50% of our foundation funding for the next year.

Meet expansion plans and budget needs

  • Keep on pace with our organization's growth.
  • Allow us to meet our expanded budget.
  • Be on solid ground; could plan better, make our strategic planning far more effective.

Implement ambitious plans; impact whole community

  • Carry out the plans we have developed: change the B.A. degree we grant from community studies to public policy; be more proactive: retrain the faculty; work in new ways with student-adults; organize our archives, the best on post-World War II Indian activities.
  • Change or demonstrate change in the health status of the community, and measure the outcomes.

Two-thirds of the grassroots organizations believe they do not get an adequate level of core or general operating support from foundations. Zero-60% of their foundation grants is for core funding, the average and the median being 25%.

The others, which get between 80-100% of their foundation dollars as core support (except for one at 33%), feel quite comfortable with their level.

Those who believe they should have more core support, offer the following reasons:

We could be more flexible; it would be easier to build long term capacity.

We wouldn't have to do so many little specific projects.

We could do what we wanted!

You can't do a project if you can't do your core work; you have to take care of basic needs, just like for a family.

Project dollars don't pay for essential overhead costs.

Core support is essential to do actual programs, to maintain the organization, to continue the organization.

You need core support for necessary shifts in your program; you can't shift so easily if you are locked into funded projects.

We need core support to make us a stronger group.

Grassroots organizations with paid staff, or with mixed paid and volunteer staff, are much more likely to obtain foundation grants than organizations with just volunteer staff, or with no staff, only a volunteer board of directors.

Why do some grassroots organizations get funded and others not? What kind of staff do the successful organizations have? The foundations active in funding indigenous movement groups mostly fund organizations with paid staff, while foundations which only occasionally fund indigenous groups generally make grants to them when they have mixed paid and volunteer staff.

This is not to say that organizations with only volunteer staff or no staff at all never get foundation grants. They do. But the odds are longer for them

When asked why grassroots organizations do not get more foundation dollars, grassroots organizations principally blame foundations for denying them the money.

Grassroots leaders' comments fall into two basic camps. They primarily fault foundations because of their funding decisions, i.e., foundations make the "wrong" decisions. And they also significantly blame foundations' bureaucracies and policies.

Only two grassroots leaders identify social class as the issue as to why foundations don't fund grassroots groups. One says, "Foundation program people are not my peers, they don't know what we are about." Another says, "Foundations are prejudiced against the grassroots."

Foundations agree that they are primarily to blame for the very limited funding of grassroots organizations.

Three-quarters of the foundations who are leaders in funding indigenous social movements squarely place the blame on foundations for the scarcity of foundation grants given to grassroots organizations, while only half the foundations who only occasionally fund indigenous movements blame foundations for this.

Typical foundation comments are not a lot different from those of grassroots leaders. Like grassroots leaders, foundation officials primarily fault foundations because of their funding decisions.

Also, like grassroots leaders, foundation officials significantly blame themselves for not making grants to grassroots organizations because of foundations' bureaucratic and policy issues.

So grassroots and foundations appear to see eye to eye for the latter's culpability for too little grassroots funding. This, however, is not so. There is a big difference between their viewpoints: foundations also place substantial blame on themselves because of the gap in social class and culture between foundation people and grassroots people, whereas, as noted above, only two grassroots leaders mentioned this.

Foundation leaders comments about this follow on page 19. But what expresses this social class and culture gap best are the following comments: "Foundations don't share the politics of grassroots organizations." "...it is not the culture of philanthropy to change power structures." "Foundations have a distaste for divisiveness, which grassroots organizations are perceived to embody; foundations are populated by corporate and other people who are likely to be targets of grassroots action."

Carson also has some ideas about why indigenous groups do not get more foundation funding. He questions why "...institutional philanthropy has not played a more prominent role in supporting...social justice advocacy..." for people of color, early white ethnics and women (p.270). But he thinks that "the reticence of foundations in this area is understandable. In general, foundations are created by wealthy people who have benefitted from the status quo and who, in social matters, are likely to be more conservative than progressive...Another explanation for the reactive rather than proactive involvement of institutional philanthropy in social justice issues has to do with the racial and ethnic composition of the boards and staffs of foundations....A total of 90% of foundation governing boards and 84% of foundation professional staffs consist of white Americans" (p.270).

Covington also addresses this latter issue: "Most of the projects developed by community foundations to impact poverty or discrimination were designed and implemented by people whose credentials, social status, and occupational status would generally identify them as members of the community elite..." (p.8).

Carson adds, "it is important to note that foundations have good reason to be concerned that social justice advocacy might inadvertently lead to greater scrutiny from Congress" (p.270), since many hold the Ford Foundation - and its grants for grassroots action, e.g., selected voter registration in Black Cleveland and Chicano San Antonio; and school decentralization in New York City - principally responsible for the Tax Reform Act of 1969 which set forth most of the laws and regulations that govern private foundations today.

Grassroots and foundation leaders' comments in the boxes on the next two pages articulate much more varied and in-depth reasons why grassroots organizations do not get more foundation grants than the summary above.

 

Why don't grassroots organizations get more foundation dollars?

1. Grassroots organizations principally blame foundations because foundations make the "wrong" funding decisions:

  • Foundations are prejudiced against grassroots groups; they fund others with professional credentials.
  • Foundations don't understand that organizing communities of color is a long-term process.
  • Foundations don't support advocacy work and community organizing, they support the plentitude of non-controversial activities.
  • Foundations don't fund community organizing/social change. They under-value its importance.
  • Foundations don't understand community organizing, which is training people to make decisions about their lives and giving them the tools to inject their decisions into the policy process.
  • Foundations do not consider empowerment and betterment as key issues, or the need to build partnerships with universities and local governments to accomplish these things.
  • Foundations provide large grants only to handful of national groups.
  • Foundations fund their programs, not innovative or creative new programs.

The foundations agree with this assessment:

  • Foundations fear controversy. They are afraid to take risks.
  • Foundations don't often fund advocacy; they are scared of it; they think it is illegal to fund.
  • Foundations fund issues, problems; they don't think about developing leaders and power; they think organizing is a 1960s "in your face" thing.
  • The way foundations cut issues (by topic, scale, whatever) leaves grassroots organizations out.
  • It is not so easy to fund grassroots organizations; it is easier to fund direct service projects.
  • Instead of building membership organizations, foundations have a tradition of funding advocacy, policy or service.
  • A lot of foundations are geared to fund national public policy and advocacy; grassroots organizations are typically local.
  • Many foundations fund larger organizations because that's where they think the action is, rather than with smaller grassroots organizations.
  • Large foundations find it difficult to fund other than national organizations.
  • Foundations believe in funding academic research; they want reports; but community organizations are living organizations (they do well for a few years, then are fallow).

2. The grassroots also significantly blame foundations' bureaucracies and policies:

  • Foundations don't understand that people of color can manage money.
  • Foundations ask people of color who run organizations to meet more stringent guidelines.
  • Foundation policy wonks decide that the child support issue is providing finding low income minority Dads rather than providing support for a low income Moms network.
  • Foundations are program oriented, they want something easily packaged.
  • Foundations' guidelines are boxes (social service, community development, community organizing) into which we don't fit, as we're doing all three areas in one program.
  • Foundations require us to explain ourselves out of the box of being a special interest group (American Indians).
  • It's difficult to raise sustaining income from foundations.
  • Foundations move on to new things.
  • Foundation applications take too much time/effort.
  • Each foundation application form is different.

The foundations also agree with this assessment:

  • Foundations can be bureaucratic, cold, distant organizations, which makes it hard for new groups to figure out how to get grants.
  • If a foundation does not know you, it is hard to break through; if you are something "new," the bigger foundations don't know where to "place" you.
  • Foundations need time to get to know grassroots groups, and learn about their staying power.
  • Foundations may have criteria that don't consider the real world of grassroots organizations: a grassroots organization comes together, decides on an issue and how to do it -- but foundation guidelines may not fit.
  • Foundations think grassroots organizations usually only represent one community (e.g., immigrants, people of one color), that this is too narrow to fund.
  • Foundations' legal advice is that grassroots organizations are involved in dangerous advocacy.
  • Foundation staff have a priority about "effectiveness," about wanting to "make things happen;" larger grants are often thought to be more effective in making things happen.
  • Foundations require accountability, measurement and documentation beyond what grassroots organizations can do.

3. But, unlike grassroots leaders, foundation officials also substantially blame foundations because of the gap in social class and culture between foundation and grassroots people:

  • There is a disconnect between foundation board members' social class and that of grassroots groups; foundation boards are not particularly political, but grassroots organizations are.
  • Foundations are staffed by privileged people, who probably don't appreciate the real role of community organizations in representing poor people.
  • Foundations don't share the politics of grassroots organizations.
  • Foundations are not set up to make grants to grassroots organizations; most private foundations are funded by people of wealth, whose foundations fund their economic peer interests.
  • Foundations are about wealth; trustees aren't attuned to grassroots organizations; foundation people don't grow up in the grassroots context; it is not the culture of philanthropy to change power structures.
  • Foundations have a distaste for divisiveness, which grassroots organizations are perceived to embody; foundations are populated by corporate and other people who are likely to be targets of grassroots action.
  • Racism, sexism, other "-isms" play significant roles in foundation grant-making.

When the question is personalized, that is, asking grassroots leaders why their proposals get turned down by foundations (instead of asking why grassroots organizations do not get more foundation dollars), a few grassroots leaders respond that every good proposal cannot be funded, while most state that foundation guidelines, arbitrary decisions and ignorance of grassroots organizations are key reasons.

Only half the grassroots leaders answer the question about why their proposals don't get funded. Most seem perplexed by the question. A few acknowledge that every good proposal cannot be funded and a few more have no idea why they were turned down. Most who answer point to foundation guidelines, arbitrary decisions and ignorance of their organizations as the culprits:

The foundation's guidelines were not a good fit for us.

We didn't match their priorities.

Our issue is a tough issue; some who fund children's issues say it's a women's issue, others who fund women's issues say it's a children's issue.

We were shopping in the dark, the foundation's foci don't exactly match ours.

Their guidelines and priorities are always changing.

They don't understand us, we do real stuff, we don't write up plans for ideal programs.

They have too many restrictions.

Some only fund in one state.

Our geography didn't match.

The foundations make their decisions arbitrarily.

Our politics are considered Marxist due to our networks with Latin American groups which challenge authoritarian regimes.

They were "political" in funding other human rights groups than us.

They were "screwballs," we had a board sponsor, who said she'd get us money, but didn't.

Everybody (foundations and activists alike) thinks change occurs in different ways, some write their Senators, others sit in tree-tops.

They give to large groups, not us.

We were too big for them.

They did not know us.

They just didn't know us.

We have no relationship with them.

While grassroots organizations principally blame foundations for denying them more foundation grants, they also see themselves as part of the problem -- though to a lesser extent.

Foundations agree.

Grassroots leaders are quite candid about why their organizations are at fault. Mostly they believe they don't have the skills or capacity:

But grassroots leaders also plead ignorance as to why they don't raise more foundation money:

And they recognize that their lack of effort plays a role:

Grassroots organizations also say frequently that they don't have the time necessary to obtain more grant money.

When asked why they don't get more money from foundations, one-quarter of the 26 organizations interviewed say they have "no time" to do more fund raising. When asked if they know other foundations that might have funded them if they had submitted proposals, 60% of the 26 organizations acknowledge they do, but most say they have "no time" to prepare the proposals.

Nor do they submit an adequate number of proposals.

The 26 grassroots organizations surveyed submitted 1175 proposals last year, but three organizations alone sent in 800 of these. Thus, the other 23 organizations submitted 375 proposals, for which they received funding for 235 (a 63% success rate).

 

PROPOSALS SUBMITTED AND SUCCESS RATES
GRASSROOTS ORGANIZATIONS # Proposals Submitted # Funded Success Rate
All 26 Interviewed 1175 282
23 Organizations, excluding three orgs. which submitted 800 proposals 375 235 63%
PROFESSIONAL FUND RAISERS 6-10 1 10-17%

In the author's experience as the chief fund raiser for a 23-year-old social change advocacy organization, the above numbers mean that grassroots groups did not submit enough proposals. The author was always conservative in only submitting proposals to those foundations from which he thought his organization had some chance of getting funding. But this meant he usually submitted 2-3 times as many proposals as were ultimately funded, a 33-50% success rate.

However, a rule of thumb of professional fund raisers is to submit 6-10 proposals for every one they expect to be funded, which is only a 10-17% success rate.

Like grassroots leaders, foundations say that grassroots organizations' limited capacity and lack of skills are the biggest problems keeping them from getting more foundation grants.

In fact, two-thirds of the foundation responses make these same points:

Only one-sixth of the time do foundations cite grassroots organizations' ignorance and lack of sophistication concerning foundation opportunities and ways when blaming them for not getting more foundation money.

Surprisingly, no foundations blame grassroots organizations' lack of effort, even though this is on grassroots leaders' list of reasons for their failure to attract more foundation grants.

Three foundations, who only occasionally fund indigenous movement groups, cite the threatening or very different nature of grassroots organizations as to why they don't get more money:

When asked why they get foundation funding, grassroots leaders cite three basic reasons:

Foundation leaders make more varied responses when asked why they give grants to some grassroots groups and not to others.

Foundations cite the same three basic reasons that grassroots groups do. But foundations identify four additional important rationales that none of the grassroots leaders mention:

The comments on the next two pages by both grassroots and foundation leaders provide much more detail about each of the above reasons why some grassroots organizations get funded and others do not.

 

Why do some grassroots organizations get funded and others not?

Grassroots and foundation leaders agree on three things:

1. Relationships Matter

Grassroots Responses: 

  • We have face-to-face personal relationships with every funder.
  • We talk with the foundations before we submit the proposals.
  • We are very focused on building good relationships with funders.
  • We have (good) relationships over many years.

Foundation Responses:  

  • We like smaller organizations rather than bigger ones, because they
  • have less overhead, they keep in touch with us and invite us to events, whereas
  • the larger organizations lack personal attention.
  • We like to fund groups we have funded before, because we are familiar with their work and track records; sometimes we fund groups known by other groups we have funded.

2. Track Record/Capacity

Grassroots Responses

  • We have a track record for 24 years; we are recognized.
  • We have a word-of-mouth reputation.

Foundation Responses:  

  • Can they make this really happen? What is their fund raising prowess? We fund organizations that can make "significant social change" to "impact significant
  • institutions" rather than start-up groups or heart-tug groups.
  • The grassroots organizations have a good process for issue identification, taking action and identification of leaders.
  • How is it possible for a new group to realize its goals? How far has a grantee gotten toward the goals it set a year ago?
  • What is their capacity for delivering what they say they will do? How good is the Executive Director, staff and information dissemination activities?
  • What are the chances of getting delivery of real progress? Can the organization make a difference? How savvy is the board and how capable is the staff? Is there a media plan? Is there strategic thinking?

3. Organizations Fit with Foundations' Program Foci

Grassroots Responses:  

  • The foundation program focus matched ours.
  • Our organization program overlaps closely with what foundation funds.

Foundation Responses

  • They do what we see as needed, and others do not.
  • We fund within our guidelines.
  • The proposals are aligned with the foundation mission.

Foundations identify four additional reasons why some groups get funded:

4. Nature of Proposal and Plans

  • We read the cover letter to see their ideology, and if they have an awareness/connection
  • with the larger world, and media sophistication.
  • Does the organization have an understanding of root causes of issues? How does the organization understand and relate to other issues and organizations?
  • We ask where will our grant money make the most difference?
  • Does the organization have sophistication in understanding power and vision? Does the organization have the higher level of understanding and analysis to build its capacity to take the next steps?
  • They have a broader vision than their immediate focus; they have a breadth of understanding of issues, a diversity of concerns.
  • We don't fund in a state where change can't happen.

5. Networks Are Important

  • Networks are very important.
  • We fund regional and other clusters of organizations rather than individual organizations.
  • We are a big foundation and therefore fund regional alliances rather than individual groups; we fund more collaborative work.
  • We fund building of statewide coalitions.

6. Community Base/Membership/Non-grant Income

  • We pay attention to development of membership.
  • Are people most affected by the issue leading the organization?
  • Ownership and control of the organization by people/membership are critical; organizational integrity, payment of dues, non-grant income are all important.
  • They (1) show good, feasible organizing plan involving large numbers of residents, (2) recruit and develop leadership, (3) the organization is actually run by the community (i.e., they are on the board) and (4) there is a good process for issue identification, taking action and identification of leaders.
  • They are moving toward long-term community empowerment.

7. Foundation Processes

  • We usually read cover letters rather than proposals; then we read the proposals, hoping they are brief, like a journalist would write.
  • We have a very intensive evaluation process, involving lots of people; organizations submit pre-applications, we talk, then some submit full applications; national staff evaluates every proposal, sends them to local staff, who make site visits and evaluate the proposals; all goes to a national citizens advisory committee who review proposals twice/year.
  • Fifteen Activists score proposals; we go on retreat with staff and board; the proposals which generate consensus get funded.

Asked to characterize their "best" relationships with foundations, nearly half the grassroots groups express quintessential partnership feelings, often starting their responses with "We..."

What do relationships have to do with foundation funding? What characterizes foundations' "best" relationships with grassroots organizations? As indicated above, both grassroots and foundation leaders think relationships are important in foundation grant-making to grassroots organizations.

Each grassroots leader was asked to "Describe your organization's best relationship with a foundation." Some express a simple appreciation for how particular foundations operate. Often they just appreciate the grant money the foundations have provided. However, nearly half the grassroots organizations express quintessential partnership feelings, often starting their responses with "We..."

Foundation leaders also think in terms of partnership and mutual benefit when asked to "Describe their best relationships with grassroots organizations." Sixty percent of their responses describe relationships characterized by mutual benefit: partnership, reciprocal and long term. The other responses identify grantees' programs or success as the relationship focus (30%) or paternalism/maternalism ("We gave them their first grant") (10%).

The comments on the next two pages provide thick detail concerning both grassroots and foundation conceptions of their "best" relationships with each other.

 

The grassroots describe their "best" relationships with foundations

1. Some express a simple appreciation for how particular foundations operate:

  • They have "our" people on their staff, as consultants and on their board.
  • They have "our" people on their board.
  • They have a staff person who is a former community organizer from the South; she cares about the health of our organization; she has offered us development grants.
  • They have a staff person who is really interested in our organization succeeding.
  • They went out of their way to coach us in submitting proposals over the years.
  • They give technical assistance.

2. Often they just appreciate the grant money the foundations have provided:

  • They have funded us for three years now; they are willing to provide general operating support to programs that need money.
  • They really understand the importance of general operating support; they give networking and scholarship money to eight of us coalitions concerned with immigrant rights across the U.S.; they won't give us a sign-off (termination) grant; they send people to us, for information on grants and internships.
  • They get out to help our organization when we are in trouble, and add money; they are very approachable; they offer us leverage with other foundations.
  • They give us lots of money; they bring investors to our community.
  • They funded us for five years at $450,000/year.

3. However, nearly half the grassroots organizations express quintessential partnership feelings, often starting their responses with "We..."

  • We are fairly interactive with a regular dialogue.
  • We have a very good relationship with a staff person; we are in close contact, we meet frequently. We can sit down in advance to share our plans for growth and expansion.
  • The foundation acts as a partner with us; we can call and have lunch and talk about where we are; periodically I send them information, inviting people out to see us.
  • We work closely on a daily basis; the foundation asked us for legal help for its program to stop gender apartheid in Afghanistan.
  • We have regular two-way, once a month contact on a wide variety of issues, people, foundations and problems, sort of like we regularly "shoot the s___."
  • They are very honest and clear (most of the time); they have narrow guidelines (which we fit very well); they hold us accountable.
  • They challenge us to examine our work, yet they give us money because they have confidence in us anyway; they take the time to understand the big picture strategies we use; they offer their views.

 

 
Foundations describe their "best" relationships with the grassroots

1. 60% of the "best relationships" have mutual benefit as the basis:

  • When there is a "partnership" which allows a foundation to freely communicate, share ideas and expertise (background information), recognizing that grassroots organizations are experts in their geographic areas; where there is mutual trust, yet recognizing that a foundation has fiduciary responsibilities.
  • Organizations come to the foundation for more than grant money, looking for a "partner," seeking advice on how to be more effective administratively; foundations are knowledgeable...and should be tapped for it.
  • An organization project organizer really understood how to use foundation personnel as a partner; s/he could share disappointments as well as successes; because s/he was very straightforward, the foundation would do what it could to help.
  • We gave an organization its first grant, spent lots of time on the phone with the organization's leader; she joined our foundation's grant-making board.
  • We have a "reciprocal" relationship: we give money and training; they give us PR and provide experts for forums.
  • Our program officer goes to this grantee's trainings, gets to understand their leaders, can talk about technical assistance the foundation offers, advocates for the organization to other foundations, and he, in turn, gains access through the organization to leaders of the larger community, which allows him to inform the foundation.
  • The organization allows us to have our people involved with them and their cause; we both have something to learn from each other.
  • We are nurturing a movement of 12 social justice groups around the U.S.; we were the first funders of the 12; they are young people, with lots of energy; they work with community groups that we fund.
  • We have individual relationships with grantees, long term and strong, which allow us to test out ideas about what would be helpful.

2. 30% have grassroots organizations' programs or success as the basis:

  • There are organizations that don't need a lot of money, volunteers do lots of the work.
  • Organizations run by activists themselves, missions are critical.
  • We've had a terrific impact on policies we have targeted; we started by making grants through intermediaries, but are now we are making grants directly to grassroots groups.
  • A grantee organization we funded over 5-7 years ago went through difficult times, but we stuck with the organization because of the political value of its mission.
  • We seek involvement in coalitions of grantees and funders on an issue.
  • We have used a committee of grantees to plan convenings; one outcome was a center for corporate research, utilizing outside professionals.
  • We made the first grants to the organization; they did a great job, massive outreach to community, PR, building a coalition of 20 groups, including big, national and mainstream groups; they were successful.

Asked to characterize their "worst or most disappointing" relationships with foundations, grassroots groups talk about problems during the application process, the lack of institutional consistency, and the arbitrary and unilateral nature of foundation decision-making processes.

What characterizes grassroots groups' "worst" relationships with foundations? Each grassroots leader was asked to "Describe your organization's worst or most disappointing relationship with a foundation."

The application stage for first-time grants is the scene of half the grassroots groups' worst relationships with foundations. Basically, the issue here is the inability of the grassroots organizations and the foundations to connect in any human way.

Sometimes the criticism of foundations runs deeper than simply not connecting. Lack of institutional consistency lies beneath many complaints. Sometimes the inconsistency is simply in money terms. For example, grassroots grantees do not understand why a foundation would support them for three or four years, then abandon them.

Sometimes it's just the sheer arbitrary and unilateral nature of the foundation decision-making processes that cause grassroots leaders to throw up their hands in exasperation.

Asked to "describe their worst or most disappointing relationship with a grassroots organization," foundations identify grantees who keep key information a secret, lie to them, steal grant funds, and do not deliver programmatically.

When grantees keep key information a secret and don't tell their foundation grantors, or lie to the foundations, the latter often describe these as "worst or most disappointing" relationships.

Stealing grant funds, not surprisingly, leads to poor relationships.

Half the time foundations label relationships "worst or disappointing" because grassroots organizations have not delivered programmatically.

The comments on the next two pages by both grassroots and foundation leaders reveal the great variety and depth of the "worst or most disappointing" relationships between grassroots groups and foundations.

 

The grassroots describe their "worst" relationships with foundations

1. The application stage for first-time grants is the scene of half the worst relationships with foundations. Basically, the issue here is the inability of the grassroots organizations and the foundations to connect in any human way:

  • Everything seemed great, we applied, then we got all weird stuff back from them; we don't understand them or what they want.
  • When no one responds to you or says,"Take a number."
  • When you get a form letter saying "no" to your proposal.
  • They never give us feedback, never meet with us; they always change their guidelines or have very vague ones.

2. Sometimes the criticism of foundations runs deeper than simply not connecting. Lack of institutional consistency lies beneath some complaints:

  • They made a grant, then pulled it back...
  • We were anticipating a big grant, the Executive Director of the foundation was our program officer, then he got fired and the deal completely fell through.
  • The foundation liked our work, requested a modification of our proposal to include hiring a social worker; we modified it, got the funds, hired the social worker, and were left holding the bag when the foundation did not renew the funds the next year.
  • For a renewal grant, we submitted four different proposals; clearly the foundation hadn't read any, they didn't even know what they had funded earlier and why.

3. Sometimes the inconsistency is simply in money terms. Grassroots grantees do not understand why a foundation would support them for three or four years, then abandon them:

  • For a renewal grant we submitted four different proposals; clearly the foundation staff hadn't read any; they didn't even know what they had funded earlier or why.
  • After three years funding, we were told to get money elsewhere.
  • After giving us $450,000 for each of four years, we were only given $125,000 for the fifth year, and told to find sustaining funds elsewhere.

4. Sometimes it's just the sheer arbitrary and unilateral nature of the foundation decision-making processes that causes grassroots leaders to throw up their hands in exasperation:

  • A funder leapt to conclusions about an internal memo concerning an internal staff conflict, and subsequently turned down our renewal grant request, after one year's funding.
  • Our grant was yanked because some powerful people objected to our organization's' civil disobedience in fighting against a prison being built in the neighborhood.
  • They don't have a clue about how to use their money to transform communities; they study a problem with a large periscope (like with an international focus) and don't consult the community.
 
Foundations tell of their "worst" relationships with grassroots organizations.

1. When grantees keep key information a secret and don't tell their foundation grantors, or lie to the foundations:

  • An applicant knew it was going under, took our $100,000 grant, then went under.
  • An organization portrayed itself as further along than it was --this was misrepresentation; the organization failed, we had no further conversations.
  • A grassroots grantee got into trouble with the IRS, and didn't tell us.
  • I don't like being lied to, or having information withheld (like a change in leadership right before the grant); they took the money and ran.
  • We can tolerate failure, but not lying; we have stopped funding several institutions who lied.
  • When things go wrong, and they don't let us know; or when things go differently from the proposal plan, and they don't let us know (such as firing the Executive Director).

2. Stealing grant funds, unsurprisingly, leads to poor relationships:

  • When a newly hired ED embezzled money and ran away.
  • Only one grantee in over 10 years has been guilty of malfeasance, and it went under as a result.
  • This person ran away with the money, although it was eventually repaid.
  • When we have to ask several times for receipt of grant dollars, and never hear from them again.

3. Half the time grassroots organizations have not delivered programmatically:

  • A few have flopped; a welfare mothers' organization got a grant and disappeared, moved, left no forwarding address, kept making promises, strung us along for 1 1/2 years.
  • We funded a group which said they were going to develop a membership base; they never did.
  • We helped promote a grantee, but the group didn't grow as proposed or expected; the group did not come through after we went out for it.
  • The grantee had accomplished nothing after one year, although it hadn't spent the grant.
  • When grassroots organizational structure is weak.
  • Group was unsuccessful, wore out staff and volunteers over 2-3 years, real loss for the state.
  • Organization was in real financial trouble, laid off most of staff, could not then produce necessary financial statements; organization became very defensive, ED finally left, and organization is falling apart; "it's hard to make nonprofit organizations work."
  • Where there is a desperate need for change, but few resources and few good people, the organizations cannot sustain themselves over time.
  • A couple organizations were only interested in the money, not in what the money can do.
  • When political in-fighting develops among grantees, or in a movement, and some people then try to use their influence with the foundation to gain advantage over others.
  • This grantee does not work well with others in coalition, even though it does good work.

 

The foundations interviewed identified the foundations which they thought were doing the "best job" in funding grassroots organizations.

They identified 19 foundations. They were also asked to tell why these particular foundations were singled out. Their reasons are listed below.

For some, the answer is simple: "they fund who we fund":

Another thinks the world is too complex for simple answers:

Others identify the "best" funders of grassroots groups as foundations which focus on what is funded:

Still others believe that foundation values or savvy is the key characteristic of the "best" funders of grassroots organizations:

And some foundations are the "best" because they are partners with their grassroots grantees or work very closely with them:

RECOMMENDATIONS FOR FOUNDATION ACTION

Recommendations for foundation action will first be presented -- because foundations have greater leeway to change their grant-making and associated behaviors -- to be followed by recommendations for grassroots action.

THE RECOMMENDATIONS WHICH FOLLOW ARE MADE BY INTERVIEWEES, NOT THE AUTHOR.

The 26 grassroots and 22 foundation leaders surveyed offer many recommendations for foundation action. Most of these recommendations break out into two major categories - that foundations should provide more funds or redirect funds for the grassroots, and that foundations should expand their knowledge about or relationships with the grassroots. Grassroots leaders are much more supportive of these two major sets of recommendations (90%) than foundation officials (55%), nevertheless, the latter support them more than they do any other recommendations.

FOUNDATIONS SHOULD PROVIDE MORE FUNDS, OR REDIRECT FUNDS, FOR GRASSROOTS ORGANIZATIONS.

The specific funding recommendation garnering the strongest support was:

  1. Fund capacity building. This has many meanings. It means to help organizations early on, to help them to become more effective, to fund infrastructure and administration, to expect infrastructure development to take longer than four years, perhaps to give a larger percentage of grant dollars for training and skill development rather than for programs and, above all, to provide core support, investing in organizations instead of programs.

The funding recommendations receiving the next level of support were:

  1. Fund technical assistance.
  2. Make more grants direct to grassroots organizations rather than through intermediary organizations.
  3. Reward results.
  4. Make multi-year grants.
  5. Fund agendas determined by the grassroots rather than by foundations.
  6. Make larger grants.

Other funding recommendations mentioned were:

  1. Fund empowerment.
  2. Provide matching grants.
  3. Grant seed money.
  4. Give money to foundations currently funding grassroots organizations.
  5. Create set-aside amounts for grassroots organizations.
  6. Use relationships with other foundations to leverage more money for grassroots grantees.

In support for these recommendations, Gary Delgado says that, "While canvassing, the solicitation of church support, and individual membership dues have raised up to 70% of the annual income for a local group, these methods don't support expansion...External support for most community organizations is spotty, small and inconsistent." (p.36)

"The most under-served constituencies," he adds, "...include communities of color; immigrant-rights groups; and networks to support the development of effective organizations in the gay and lesbian, women's, and disabled communities." (p.16)

In a study of 20 small women's organizations in Boston, Susan Ostrander ascertained that "No single method of raising money was seen as particularly reliable" (1998, p. i).

Richard Couto's study of 24 Appalachian community organizations led him to conclude that "community change to promote increased social and economic equality is a long-term and difficult process; and prevailing in that process requires a combination of human and financial resources and leadership from within and outside of the local community" (p.271).

Community organizing "has always been tremendously undercapitalized," Delgado observes. "If the philanthropic community were to infuse capital into the field strategically, not only would funders make a vital contribution to (community organizing) practice, (but) replicating some of community organizing's leadership development models would make an important contribution to the whole field of community development." (p.15)

FOUNDATIONS SHOULD EXPAND THEIR KNOWLEDGE ABOUT OR RELATIONSHIPS WITH GRASSROOTS COMMUNITIES AND THEIR ORGANIZATIONS.

The specific knowledge/relationship recommendations obtaining the greatest support were:

  1. Do more outreach.
  2. Seek to better understand grassroots organizations.
  3. Do more site visits.

The knowledge/relationship recommendations with the next level of support were:

  1. Add "our people" to foundation staffs and boards (or add more of "our people").
  2. Build better relationships with the grassroots.
  3. Change foundation thinking from over-valuing academic and professional thinking to what people care about.
  4. Have a different system to evaluate what community organizations do; the products of community organization and leadership training (information to our members, organized representation, policy change) are different from that of professional policy institutes (research and policy reports).

Other knowledge/relationship recommendations mentioned were:

  1. Talk more with other funders.
  2. Understand how public subsidies go to corporations (and not to us).

Appalachian researcher Couto urges outsiders to understand how "The unyielding context in which (community organizations) work ...disappoints (them) and tarnishes the glimmer of the democratic prospect for them...The multiple demands of an overload of work, keeping up with funding, creating and maintaining the group's cohesion internally and identity externally, and internal and external conflict (contribute) to the burnout of staff " (p.282). "Improvement in the democratic prospect does not come easily, quickly, or irrevocably. There are no shortcuts and many disappointments" (p. 294).

In addition to the two major sets of recommendations preceding, some interviewees make three additional recommendations:

FOUNDATIONS SHOULD IMPROVE THEIR APPLICATION AND GRANT-MAKING PROCESSES.

Foundations tend to make this recommendation more than grassroots leaders.

FOUNDATIONS SHOULD PARTNER MORE WITH OTHER FOUNDATIONS.

Foundations almost exclusively make this recommendation.

Delgado recommends, "Because it is not always structurally feasible for funders to evaluate the effectiveness of local (community organizing) groups, it may make sense for funders to develop a partnership re-granting program with local training intermediaries that could support local organizing efforts and develop collaborative efforts." (p.17)

Of course, foundations partnering with other foundations always raises a red flag. When does cooperation to provide more money and assistance to grassroots groups stop, and the operation of a cabal starts that limits or stops funding for the grassroots organizations that get on the wrong side of a funder or two?

FOUNDATIONS SHOULD RAISE MORE MONEY TO GIVE AWAY.

Only foundations make this recommendation.

This recommendation is aimed at public charity-foundations, such as Vanguard Foundation in San Francisco, Haymarket Peoples Fund in Boston, Crossroads Fund in Chicago and most women's funds -- which have limited endowments, and annually must raise most of the money they give away each year.

WORDS OF CAUTION by GRASSROOTS SCHOLAR

DAVID HORTON SMITH

Grassroots scholar David Horton Smith, however, offers words of caution to foundations regarding funding "volunteer grassroots associations." He says, "when external grants enter the picture, the seeking and having of this money tends to deviate the group from its initial purpose...most grassroots associations do not need foundation grants for operations if they are healthy...With a group that already (has) paid staff...the situation is different...Only grassroots organizations that (have) paid staff really need (foundation) funding" (Smith, 1999).

Regarding grassroots associations dependency on external funding, Smith cites scholars Blum and Ragab (1985) and Hunter and Staggenborg (1986) in cautioning that "grassroots associations...tend to decline and lose their capacity for political action...when they become significantly dependent on external grants or contracts." (Smith, 1997, p. 277).

RECOMMENDATIONS FOR GRASSROOTS ACTION

THE RECOMMENDATIONS WHICH FOLLOW ARE MADE BY THE INTERVIEWEES, NOT, I REPEAT, NOT BY THE AUTHOR.

GRASSROOTS GROUPS SHOULD MARKET THEMSELVES MORE EFFECTIVELY.

This is the most important recommendation from foundations.

What's strange here is that only a few grassroots organizations comprehend this loud recommendation from foundations. And remember, this recommendation is not just from any foundations, but from those with solid histories of funding grassroots social movement activities.

Often grassroots groups do little or no marketing of themselves. Why is this? Because they are doing "good" things for the benefit of the community, they think that other organizations, the media, and funders should recognize this by according them due respect, attention and funding. This is unbelievably naive considering that there are millions of other grassroots groups also doing "good" things who also want respect, attention and funding, and that funders, being scarce as well as human, have only limited time and energy in which to identify and learn about who is doing what particularly well out in the world.

How do grassroots groups market themselves more effectively? Grassroots organizations need to develop public identities (i.e., become publicly known for something important), use the media, construct more attractive funding packets, and not the least, document what they've done and tell their stories better.

Once getting past the preceding recommendation, there is generally substantial agreement between foundation and grassroots leaders about what the latter should do to raise more foundation grant monies, as the recommendations below indicate.

GRASSROOTS ORGANIZATIONS SHOULD COMMIT MORE RESOURCES FOR FUND RAISING, AND SEEK TO INCREASE THEIR FUND RAISING SAVVY.

The grassroots groups believe they need to do this even more than foundations.

They say their executive directors or other staff need to commit more time to fund raising, they need to hire part-time or full-time development staff, and to hire someone to teach them how to do fund raising.

Grassroots leaders often think of this situation as a double-edged sword. With one side you cut your program to provide more resources for fund raising; with the other side you cut your fund raising potential by spending more on program. We are not dealing with swords, however, but with pies! Once I finally made a decision as executive director of a small advocacy organization to spend less of my time on (exciting) program work, and more of my time on (boring) fund raising and to hire a part-time development professional, our organization ultimately trebled its annual revenues (mostly from foundations). The pie can be bigger than it is now. My work, by the way, became much more exciting with a trebled budget.

GRASSROOTS GROUPS SHOULD DO THEIR HOMEWORK TO IDENTIFY MORE FOUNDATION FUNDING POSSIBILITIES, THEN SUBMIT MORE PROPOSALS.

Foundations and grassroots leaders agree on this recommendation.

It is a fact that grassroots groups do not submit an adequate number of proposals. Of the 26 grassroots organizations interviewed, 23 submitted only 375 proposals last year, for which they received funding for 235 (a 63% success rate).

Yet a rule of thumb of professional fund raisers is to submit 6-10 proposals for every one they expect to be funded, which is only a 10-17% success rate. Grassroots organizations wanting more foundation funding must submit a lot more proposals than they currently do.

In thinking about how to identify more foundation funding possibilities and submit more proposals, the grassroots groups suggest two things: using the Internet more to obtain foundation guidelines and setting goals, such as submitting two proposals a month.

GRASSROOTS ORGANIZATIONS SHOULD CONTACT THE FOUNDATIONS IDENTIFIED, DO FOLLOW-UP TELEPHONE CALLS AND OFFICE VISITS, AND GENERALLY SEEK TO BUILD RELATIONSHIPS WITH THE FOUNDATION STAFF OR TRUSTEES THAT SEEM INTERESTED IN THEIR WORK.

Both foundation and grassroots leaders agree on this.

On how to do this, grassroots leaders understand that pedestrian things have to be done: make follow-up phone calls, meet with possible foundation donors, cultivate these contacts, get out of their hometowns to talk with the foundations, and seek to build relationships over time. There is nothing new here, but necessary actions to raise new grant monies.

The key is to set a goal of building relationships with individual foundation staff and trustees who indicate any interest in one's work.

GRASSROOTS ORGANIZATIONS SHOULD CONTACT PEOPLE OTHER THAN FOUNDATIONS WHO CAN BE HELPFUL.

Again both foundation and grassroots leaders agree on this.

Who else could be helpful? Grassroots leaders think that they should join and participate in regional associations of grant-makers, participate in existing networks of like-minded community organizations, and organize training for other grassroots organizations to enable creation of networks where they don't now exist.

Real estate people say that the key to selling homes for good prices is "Location, Location, Location." Well, what we should understand about fund raising is, "Contacts, Contacts, Contacts." They open doors that permit one to tell one's (great!) story.

GRASSROOTS ORGANIZATIONS SHOULD WORK IN CONSORTIA AND COALITIONS TO AMPLIFY THEIR WORK AND VISIBILITY.

Foundations stand alone in making this recommendation.. No grassroots leader voices it.

Partly foundations are trying to limit the number of proposals they get by telling people to work together in consortia and coalitions. But foundations are also saying that those grassroots leaders who want to accomplish big things need to think about working closely with others so they can become more visible to the world one is trying to influence, and so one truly can make things happen in a big way.

Some grassroots leaders might worry that working in consortia and coalitions could highlight their competitors for funds more than it would showcase their own organizations, particularly if they are smaller or more limited in scope than their consortia and coalition partners. The author's own experience in coalitions is that this is a fear based on reality, but that if one continues to build the relationships with foundations that are necessary to obtain grants, and tells one's story effectively, then the money will continue to flow. And coalition leaders from other organizations -- who value one's organizational contribution to the coaltion -- can often put in good words at crucial times during grant proposal reviews.

Two grassroots recommendations almost unmentioned by foundations:

GRASSROOTS ORGANIZATIONS SHOULD REORGANIZE INTERNALLY.

This is the second most important grassroots recommendation on how to get more money out of foundations.

What do the grassroots leaders mean? Those unincorporated or not registered as tax exempt charities with the IRS say they should incorporate and register, to make them more eligible for foundation grants. Others say they need to "develop a lot more system," expand their organization's geographical scope, design funder-friendly programs, restructure to reflect their new activities, teach other staff to do fund raising, and modify internal staff processes so staff will better understand the fund raising process, therefore, the need for better reports and accountability.

GRASSROOTS ORGANIZATIONS SHOULD PUBLICLY CHALLENGE FOUNDATIONS TO PROVIDE MORE FUNDING FOR GRASSROOTS ORGANIZATIONS AND WHAT THEY DO.

A few grassroots organizations recommend this aggressive thought. Not surprisingly, only one foundation voices it. The whole mission of the National Committee for Responsive Philanthropy is similar: to challenge foundations (and United Ways and corporate grant-making programs) to provide more funding for social and economic justice. It is a hard road to go. Or, as some would say, it's a dirty job. But someone needs to do it.

 


ACKNOWLEDGMENTS

Many people have been very generous with their time in advising the author in this research -- starting with the Academic Advisory Committee for the project: Louis Delgado, Craig Jenkins, Susan Ostrander, David Horton Smith and Jon Van Til. They provided advice on what to include in structured interview questions, they identified "authentic grassroots organizations" to interview, and they reviewed the second draft report and made many excellent comments. I am indebted to them for this assistance.

I am especially grateful to Craig Jenkins, who dug deep into his research files to identify the two sets of foundations to interview.

Valentin Mitev of Bulgaria was also helpful in constructing the structured interview questions.

Fourthly, the Community Consultants Advisory Panel was also very helpful in identifying "authentic grassroots organizations" to interview: Dan Delany, Pablo Eisenberg, Joan Flanagan, Art Himmelman, Steve Holmer, Eleanor LeCain, Larry Parachini and Cynthia Smith. Their ears to the ground, along with the ears of the Academic Advisory Committee, helped me construct what I think is a very good sample of grassroots organizations for the study.

Fifthly, the Aspen Institute Nonprofit Sector Research Fund and the National Committee for Responsive Philanthropy provided the crucial financial support for this effort. It could not have been undertaken, nor completed, without them.

In particular, at the NCRP I wish to thank the Executive Committee Oversight Subcommittee for their helpful comments both in the formative stage of the research and on the second draft report: Cindy Marano, John Echohawk, Pablo Eisenberg and Rick Cohen. After they joined the Subcommittee this summer, Paul Castro and Jo Uehara also commented on the second draft.

Most of all, I want to thank my wife, Sharon Benjamin-Bothwell, for encouragement when the going was slow and for insightful comments on both the first and second drafts. Without her "tough love," the lousy first draft could never have become a decent second draft.

However, while all the above deserve substantial credit for whatever I did right, they had nothing to do with whatever errors are discovered herein. They probably suggested I do differently whatever I ended up doing wrong.

 


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ENDNOTES

1. The Foundation Center does not classify grants to "social movements," but instead classifies grants by subject category for "civil rights and social action," "community improvement and development," "environment" and "animals and wildlife," or by type of recipient such as "civil rights groups," "alliances/equal rights organizations," "community improvement organizations," "environmental agencies" and "animal/wildlife agencies" (Renz, Lawrence & Kendzior, p. 80, Table 61 and p.95, Table 64).

While clearly Jenkins' progressive "social movement" grants would be captured in these categories, nevertheless, these Foundation Center categories include much more. For example, grants to the Nature Conservancy (often very large grants) and Animal Welfare League would be counted by the Foundation Center in the above categories, but would not be counted by Jenkins as grants to social movements. Also, grants to Local Investment Support Corporation (LISC) (also often very large grants) would be counted by the Foundation Center in the "community improvement" categories, but not by Jenkins as grants to social movements.

2. Ad hoc information suggests that foundations may not necessarily be continuing their earlier 1.1% proportionate support of progressive social movements. Often private foundations have paid out extremely large grants to the largest and most well-heeled grantees, because making larger grants enabled the foundations to reach the ramped up required pay-out levels much easier than making a multitude of small grants (which are usually what social movement organizations receive).

There is some statistical evidence of this in Foundation Center data, in that foundations spent 30.3% of their grant monies in 1997 on grants of $1 million or more, while they spent only 24.8% in 1990. Or looking at small grants of $10,000-$24,999 (the Foundation Center doesn't record grants of less than $10,000), in 1997 foundations spent only 6.3% of their grants in this category, while in 1990, they spent 8.0%. (Renz, Lawrence & Kendzior, p.78, Table 60; Renz & Lawrence, 1992, p.51, Table 52)




Grassroots Problems and Solutions
The Citizen's Handbook / Charles Dobson / www.vcn.bc.ca/citizens-handbook