How Much Foundation Funding?

Dear Kim:

Our organization is in the middle of finalizing our fundraising plan for the coming fiscal year. Is there any general rule about what percentage of our unrestricted funds should come from foundation grants?

Thanks,

Good planning or magical thinking?

Dear Magical:

To my knowledge, there is no such rule, nor could there be. There are too many variables to create such a guideline. For example, if your organization is fairly new, then most of your unrestricted funds could come from foundations, but if your organization is 30 years old, then ideally little or no unrestricted money would come foundations, which would free you up from any dependency on them. Ideally, foundation funding is for getting programs started or expanded and is not for any core costs. Foundation funding lasts a few years and goes away, and always has strings attached, and organizations need to create a variety of income streams to be stable. But we don’t live in ideal world, and so the question you need to ask and answer is “Are we overly dependent on any one source of funding (one government grant, one or two foundations, two or three individual major donors) and if the answer is yes, then your plan includes what you are going to do over the next few years to remedy that.

Good luck!

~Kim Klein