How to Find the Right Funders by Hacking 990s
It can take dozens of hours to find the right funders for your nonprofit, especially if you’re reaching out for the first time. What funders say on their websites is often quite different from reality. So how can you find funders that are most likely to give to your cause?
IRS Forms 990 hold secrets to what funders really want to fund, and they’re free for public use. Our team at Instrumentl assembled the top three tricks to leveraging 990s from some of the most successful nonprofits.
Read on to learn how you can use 990s to hack the research process and get funded faster!
Before you begin — What’s a 990?
- Form 990 is an IRS form that provides the public with a nonprofit’s financial and program information. It allows the IRS and the public to evaluate an organization and is filed annually.
- Where can I find them? 990s are available for free. Find them by searching GuideStar and ProPublica.
Step 1 — Who has this foundation supported in the past?
Did you know you can easily learn about which organizations a particular foundation has supported in the past? If your organization has commonalities with past awardees, you just might have a good shot of winning a grant.
Becca Stievater, grants manager at the Wildlife Conservation Network, reviews where past grant recipients are located to identify commonalities and if a grantor is regional or national in its giving. She recommends that if you don’t see nonprofits from your state represented, it might be time to look elsewhere.
Terry Billie, development manager at North Carolina Museum of Life and Science, says that “when you do identify organizations similar to yours, it’s time to really build the relationship and speak with a program officer for more details.”
David Schneck, associate director of grants at the Pennsylvania Horticultural Society, tracks trends in a foundation’s giving by comparing an organization’s last three years of 990s. He suggests being on the side the grantor is trending towards, and not the side it is trending away from.
Step 2 — Who’s a good person to contact at the foundation?
An established connection can be valuable while trying to stand out in a sea of applications. Vicki Egesdal, interim executive director at Inland NW Land Conservation, and Jonathan Spinner, development director at the Connecticut League of Conservation Voters, looks for any names they recognize. If names aren’t familiar, Jonathan suggests looking for individuals that you can direct specific questions to and start building a relationship with.
Kris Johns, director of philanthropy at Project Chimps, adds that your network may be able to put you in contact with the right people. Kris reviews the list of board of directors and identifies those in her network who can help connect her to key stakeholders. She also recommends reviewing the list of contacts with your teammates and identifying possible contacts as a group to increase your chances of connection.
Step 3— How much does the foundation give?
You can learn a lot about a foundation’s size, its funding capacity, and even what the competition for a grant might be like just by looking at its 990.
From the foundation’s “total net assets” you can “get a sense of the overall size of the organization” says Becca Stievater. “It’s not necessarily indicative of the size of gift the grantor can make to you, but it’s a good place to start.”
More assets also generally mean a larger fund and therefore more competition. Competition for funding isn’t always a drawback, but it is helpful to understand upfront before you begin assembling your proposal.
Step 4— How much should I ask for?
From our conversations with grantors, they can’t stress enough how important it is to clearly present your costs and identify all use cases for the grant. But how do you determine the right dollar amount to ask for?
You can gain a lot of insight into how much foundations are comfortable awarding by reviewing the award sizes for past grants paid on their 990s.
Terry Billie recommends pitching your ask at the average level of what has been gifted before. Find the average, or median, grant amount on the 990 to determine a starting budget, then adjust the amount according to your needs.
In addition to helping you know how much to ask for, learning about a foundation’s average funding amount will help you gain an insider’s perspective into the foundation’s viability and capacity. Terry has found that outlying, larger figures indicate that a stakeholder was involved in the gift or that a close relationship between the grantee and the grantor could have existed. In contrast, lower figures may indicate a change of direction for the foundation or the phasing out of support for a particular initiative.
So grab your laptop and your list of potential prospects and start leveraging 990s today. You might be surprised at what you uncover.
**This post is re-blogged from the Guidestar blog.
