Dear Nonprofiteer, What to do when foundations slam the door?

Dear Nonprofiteer:

We are a small non-profit music school. We have been running into a problem with grants strategy–as in, we aren’t getting any.

I am consistently getting feedback:

1.    “Lovely program but we are only funding projects that can promise to reach 500-1000.”  We are small with 350 students and while I can conceive of a program that would reach a larger audience, I don’t feel I can creditably offer that in a proposal.

OR

2.    “Great ideas but we only fund people who we funded before.”

Previous executive directors in more generous times had decided that grant seeking was not worth the effort. I  think we need to make a big push but I am starting to wonder if they were right.

We have a subsistence existence with only earned income and I feel we are desperately in need of a more diverse income stream if we are ever going to grow or prosper. Operating at less than break-even is not an option with my board.

What’s the small non-profit to do?

Signed, Stymied at Every Turn

Dear Stymied,

The Nonprofiteer suspects, as you’re starting to, that your predecessors were right when they gave up seeking foundation support.  At the best of times, foundations have the attention span of fruit-flies, which means even agencies receiving support spend the whole grant term sweating blood over whether they can get it next time–nonsensical program-officer-speak  to the contrary notwithstanding.  (What kind of response is, “We only fund those we’ve funded before,” anyway?  It’s barely lucid, let alone reasonable–unless it’s just a bald-faced lie.)

And these aren’t the best of times.  (Like you hadn’t noticed.)  Some foundations are stepping up and spending a larger percentage of their income on grant-making to make up for a loss in their portfolios; others can’t, or won’t.  And as aggravating as it is to have a foundation ask you to provide services on a scale beyond your capacity, the Nonprofiteer will defend that point of view: foundations are in the business of trying to have broad impact with narrow means, and your program simply doesn’t meet their needs.

So you have to seek funds from another source.  Earned income is all very well, but of course you’re required to raise one-third of your budget in contributions simply to maintain your 501(c)(3) status.  How?

Well, as the Reverend Mother did not say, “When a foundation closes a door, somewhere an individual donor opens a window.” Stop pounding your head against the foundations’ doors and get thee to an individual gifts program.  This may be your only option; it’s certainly your best one.  Seek small gifts through an annual campaign, and big ones through individual appeals made by you and members of your no-deficit Board.  (They made the rules, now they have to play the game.)

The annual campaign: Ask your students and their families, as well as any alumni you may have, to help you make up the difference between what it costs to provide this first-rate music education and what you charge in tuition.  (If you don’t know that number, figure it out: it’s magic.  Not only does it encourage contributions, it makes future tuition increases easier to swallow.  Why do you think colleges keep repeating, “Tuition covers only a fraction of the cost of educating a student”?  Though at $40,000-plus a year, one might begin to wonder what fraction, exactly.)

Ask at “Back to School” time, and again around Christmas, and again before or during recital/graduation season.  Also, ask at performances.  Don’t be shy: remember that most people say they give because “Someone asked me.”  Your school is just as deserving as any other charity, and with 350 people in the program someone connected to you should be willing to cough up some dough.

Major gifts: Identify anyone who’s already been giving you money and take him/her out to lunch and ask for more.  If your Board members aren’t already giving, conspire with your Board president to get them to do so–and once they’ve given, ask each of them for the name of one person who could be asked.  Remember the Nonprofiteer’s rule: Board members don’t ask their friends for money–they ask each other’s friends for money!

Individual gifts come in smaller chunks than foundation gifts (though not in your case, actually).  Moreover, they’re infinitely renewable and will sustain your school for years to come.  Good luck, and let us know how you do.

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2 Responses to “Dear Nonprofiteer, What to do when foundations slam the door?”

  1. Vicki Says:

    Great advice! Everyone who relies on donations to stay in business should read this, even if it’s just a reminder of how the world works. Thank you!

  2. deborah strauss Says:

    The Nonprofiteer is exactly right in her general advice to the question about foundations slamming the door. Having had some experience in a Montessori school, I have a couple of thoughts. Before I’d give up on foundations, however, I would think about your scholarship students (assuming you have them) and discuss bringing the joys of the arts to underserved children as part of your case to foundations (or perhaps corporations where parents are involved). In other words, funders are not necessarily interested in programs that CAN be funded by tuition by middle class parents even if it’s tough.

    Can you get the names of grandparents? They may be candidates for individual asks.

    I don’t usually like special events, but since you’r a music school, you can more easily use a concert as a fundraiser compared to other groups–maybe not directly in terms of tickets but as an avenue for sponsorship or as the opportunity to request support. (This ask would need to be much more subtle than the one recommended for the theater company in the Nonprofiteer’s next topic.) (You’ve undoubtedly thought of this one, but maybe you could tweak it a bit to bring in some donations.

    Now you’ve undoubted

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