Midtown Strategy

Nonprofit planning and development consulting

Current Trends in Foundation and Government Grant Making

In our last post, we mentioned that corporate philanthropy is under going an important change that has significant ramifications for both businesses and nonprofits. As it turns out, the same is true for foundation and government grant makers and the beneficiaries of those programs.

Government grant making exists on three levels: local, state, and federal. At the local level, many cities across the nation are under pressure to cut costs while maintaining or improving services. This is leading to more opportunities for well-positioned nonprofits and socially-focused businesses to provide public services that cities once offered. These contracts are aggressively sought after and often influenced by local politics and relationships, so they can be hard to get; but, when they are secured, local grants and contracts can turn into long term, reliable funding streams, if managed wisely.

State grant making is also under fiscal pressure, but there tend to be fewer outsource-able opportunities at the state level. States will continue to bid out grant and contract work for a host of reasons, including human service and health work, for the forseeable future. Any changes at the state level are likely to emerge from state-by-state changes in budgets and leadership, of from changes mandated at the federal level.

Federal grant making is under the same type of extreme fiscal pressure that we are seeing at the municipal level. As a result, there are fewer federal opportunities today, and they are increasingly competitive (read: expensive to land). Also, many federal opportunities now require a very high level of organizational management practices, including extensive evaluation and excellence staffing and governance plans. As a result, many of these opportunities are now out of reach for the typical organization, or not worth the cost associated with acquiring one over the course of many months or years.

Foundations, too, are changing up their strategy in response to the world around them. Many foundations are looking into or beginning to do work around mission investing, or spending some of their endowment holdings on loans to socially aware organizations. Something about this trend feels like it will pass, but for the moment it is all the craze among foundation leaders. If your organization is not thinking about itself as a social business at this point, you just may see opportunities for foundation funding decline in the coming months and years, as corporate and government funding also become harder to obtain and hold.

All is not lost, however. For organizations that move from older, charity-supported models to newer, socially enterprising models, there are likely to remain ample resources from foundation and corporate donors, along with select government funding opportunities and increasing revenue from earned income streams.

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