Learning from My Mistakes
by Steven Green
At age 24, before being eligible to legally rent a car, I became Regional Director of the southeast office of the Jewish National Fund (JNF). It was a somewhat daunting situation, which I approached with enthusiasm and this set of four assumptions about the role of foundations as an integral part of effective fundraising:
- Securing major foundation gifts is key to success
- A foundation that does not give money to my organization is either misinformed or not fulfilling its charitable purpose
- If a foundation fails to award a grant proposal with funding, it is not worth my time to pursue future conversations with foundation personnel
- Fundraising is exclusively about bringing money in the door
In time, and through trial and error, I discovered the flaws inherent in each assumption. I reflect here on my experience, offering the retrospective with the benefit of time’s passing as well as knowledge gained in 15 months as the Director of Grants Administration at the Jim Joseph Foundation. Serving in this capacity has crystallized the “truths” discussed below, which counter the faulty fundraising assumptions that guided my initial work at JNF.
A core component of each is that successfully navigating the Jewish philanthropic community depends on patiently building positive, trusting relationships with foundations, individual donors, and other organizations.
Incorrect Assumption – Securing major foundation gifts is key to success
Truth – Individual donations make an organization sustainable
A major foundation’s significant gift may help advance and enhance an organization, but it will not by itself make an organization successful. Unfortunately, organizational leaders often focus too much on appealing to large foundations and forsake the individual donors who can be the basis of achieving institutional sustainability.
Frequently, individual donations are spoken about as single occurrences. This is one reason it can be difficult to convince a Board of the value of individual donors over foundations. But, in fact, foundation gifts are commonly one-time disbursements that are awarded with an exit strategy in mind, while individual donors can often be characterized in terms of their lifetime value. According to Indiana University Professor Adrian Sargeant,” essentially reducing the churn rate (business vernacular for customer turnover) of donors by 10% can potentially lead to a lifetime giving increase of 200% across a donor group. Thus, a long-term focus on individual donors can prove exponentially more valuable than a single foundation gift.
While foundations including the Jim Joseph Foundation certainly can serve as a “seal of approval” in subsequent solicitations of individual donors, an organization should bear in mind three foundation characteristics: 1) Most foundations will not be the first donors to support an organization; 2) It is often more difficult to replace a single foundation gift than it is to replace individual donors; and 3) There is a larger pool of individual donors than there is of foundations.
Incorrect Assumption – A foundation that does not give money to my organization is either misinformed or not fulfilling its charitable purpose
Truth – A well-informed, charitable foundation may decline to fund an organization simply because the strategic priorities of each are not aligned
Organization heads must recognize the strategic priorities of the foundation they seek to solicit. These priorities often strictly guide the foundation’s grant making decisions.
At the Jim Joseph Foundation, we adhere to three strategic priorities: 1) Increase the number and quality of Jewish educators; 2) Expand opportunities for effective Jewish learning; and 3) Build a strong field for Jewish learning. Our mission is to foster compelling, effective Jewish learning experiences for young Jews. The Foundation’s philanthropy is very focused – our Board has awarded 161 grants over the past six years. Furthermore, our top twenty grantees have received over $228,991,536 of the total $263,232,895 awarded. That means that there is much more in the Jewish world, and even the Jewish educational world, that the Jim Joseph Foundation does not fund than that which it does. The reality is that while the Foundation recognizes the merit in myriad Jewish educational programs and projects, only those that conform to the Foundation’s strategic priorities will be considered for funding.
Every fundraiser is going to be told “no” more often than he or she is told “yes.” Intuitively, though, an organization will greatly improve its chances of successful solicitation if it offers a “product” desired by the potential funder.
Incorrect Assumption – If a foundation fails to award a grant proposal with funding, it is not worth my time to pursue future conversations with foundation personnel
Truth – An organization should not curtail conversation with a foundation even if that foundation declines its grant proposal
More than 50% of the organizations currently funded by the Jim Joseph Foundation had at least one grant proposal declined by the Foundation over the last six years. The most important question that a development professional can ask after a failed solicitation is “why.” Sometimes, it is a lack of organizational alignment which cannot be controlled. But sometimes the proposed program can be adapted or changed in order to create a real partnership. The Jim Joseph Foundation works with prospective grantees in a collaborative process to ensure that proposals submitted to the Board reflect the Foundation’s strategic priorities and are developed to achieve the Board’s desired results.
Additionally, maintaining a relationship with a foundation can be helpful to the organization even after declination of a grant. For example, the foundation could connect the organization to another potential funder with a shared mission. Conversely, an organization might connect another organization, with a different mission, to the foundation that declined its proposal. This can create organizational partnerships, reciprocity with other funders from that organization, and goodwill with the foundation if a match is created by another organization.
Incorrect Assumption – Fundraising is exclusively about bringing money in the door
Truth – Fundraising is as much or more about keeping donors than it is about getting new ones; a development professional must be both a fundraiser and a good steward of donors’ investments
Only a director who effectively oversees the programmatic and fiscal elements of an organization can fully understand an organization’s utility and sustainability and, in turn, explain this to the donor. From a funder’s perspective, especially one who makes multi-year commitments, questions about the organization’s stewardship do not stop when a grant is awarded.
Effective, long-term fundraising includes an understanding of the results that those dollars will achieve in furthering the organization’s mission. Better Business Bureaus have been present in the United States since 1912 to help in the evaluation and assessment of public charities and the Foundation Center has been synthesizing foundation data and providing training since 1956. Several other organizations have emerged over the past twenty years which reveal public, comparative data and analysis on nonprofits. These include: Guidestar (1994) and watchdog organizations such as CharityWatch  (1992) and Charity Navigator (2001) all of which are critical to both foundations and individual donors.
Before working at the Jim Joseph Foundation, and “peaking behind the curtain,” I only had the basics of the foundation/grantee relationship. I now recognize the benefits to an organization that come as part of pursuing ongoing relationships with all types of philanthropic supporters. This understanding is fundamental to moving an organization towards achieving long-term viability.
Steven Green is the Director of Grants Management and Administration for the Jim Joseph Foundation, which seeks to foster compelling, effective Jewish learning experiences for young North American Jews. Established in 2006, the Jim Joseph Foundation has awarded $265 million in grants to engage, educate, and inspire young Jewish minds to discover the joy of living vibrant Jewish lives.
cross-posted at Jim Joseph Foundation Blog
 Nonprofit Management and Research (2001)
 CharityWatch was formerly American Institute of Philanthropy