Foundations and Nonprofits Don't See Eye to Eye on Needs

October 16, 2018 — Foundations are not as in touch with nonprofits’ needs as they think, and what nonprofits desire most is help with fundraising, staffing, and communications, according to a newly released report from the Center for Effective Philanthropy, a Cambridge nonprofit that benchmarks grant makers’ performance.

According to the report, Strengthening Grantees: Foundation and Nonprofit Perspectives, developed from a survey of 170 nonprofit chief executives and 187 foundation leaders:
  • 95% of foundation leaders believe their foundation cares about strengthening the overall health of their grantees, but only 43% of nonprofit CEOs say a majority of their foundation funders care about strengthening the overall health of their organization.

  • 87% of foundation leaders believe their foundation is aware of grantees’ needs, while 58% of nonprofit CEOs say none or just a few of their foundation funders ask about their organization’s overall needs beyond funding.
When nonprofits solicit foundation support to strengthen their organizations, only 36% base that request on their assessment of organizational needs, according to the report.

The bulk of nonprofit chief executives—64%—said they base their requests on what they think foundations prefer to fund. And 13% expressed concern that exposing their organization's needs might negatively impact chances of funding.

On the other side, 81% of foundation leaders said they gave a great deal of consideration to grantee organizations' readiness to receive support in their grantmaking decisions. And only 29% said results of an assessment of the grantee organization's needs factored into those decisions.

When nonprofit CEOs were asked what made them comfortable or uncomfortable telling funders their needs, 32% said the strength of the relationship with their funders and level of trust between them weighed heavily, while 18% expressed fear that their organization would be perceived as weak.

Nearly four out of 10 foundation leaders said difficulties communicating with nonprofits posed a significant challenge to providing support to strengthen them.

"Nonprofits should ask for what they really need. When nonprofit CEOs request support, they ask for what they think funders want to provide, rather than for what they truly need to strengthen and sustain their organization," the Center for Effective Philanthropy noted. "This is problematic because foundation leaders report giving a great deal of consideration to grantees’ requests for specific support. :

Nonprofit and foundation leaders agreed that nonprofit organizations need to strengthen key areas:
  • Fundraising: 51% of foundation leaders and 42% of nonprofit leaders agreed
  • Governance: 39% of foundation leaders and 23% of nonprofit leaders agreed
  • Leadership: 31% of foundation leaders and 20% of nonprofit leaders agreed
While 37% of nonprofit leaders said their organizations need to improve staffing and 26% cited communications as an area needed improvement, foundation leaders didn't recognize those areas as needing improvement.