Charitable foundations are stepping up. They’re meeting increased demand as U.S. nonprofits struggle with higher costs and greater community needs along with shortfalls in donations and government funding.
Just look at recent trends from Giving USA’s Annual Report on Philanthropy. Last year, charitable giving in the U.S. dropped to just under $500 billion after two years of record generosity during the pandemic. While individual giving dropped 6.4 percent, foundation giving rose 2 percent from 2021 and 5.4 percent from 2020. Individual giving still holds the majority at 64 percent, but foundation giving now accounts for 21 percent of the total.
Roughly 76,000 charitable foundations operate in the U.S. Depending on their size, they may receive hundreds of grant proposals each year, and chances are, that number is steadily increasing. As a foundation administrator, how do you wade through the sea of requests and focus your funding on those that will truly have an impact?
At The Ford Motor Company Fund, where I served as president for 15 years, we received hundreds of funding proposals each year. My goal was to transform the Ford Fund from an outlet for corporate gifts into a strategic component of Ford’s global mission to make lives better. As a result, our decisions about partnerships became more purposeful. We funded several hundred million dollars to mission-driven programs around the world that have changed lives and continue to make a difference today.
Along the way, I learned important lessons about building partnerships with purpose — here’s an overview of my top five.
1. Ensure Alignment with Board & Business
You won’t get far developing an effective strategy if you don’t have buy in from your board of directors and alignment with the corporate mission (if you run a corporate foundation). It’s important to collaborate with board and business partners to establish:
- Strategic impact areas with well-defined scopes,
- Realistic five-year goals that are measured and refreshed annually,
- Agreement on areas you DO AND DON’T want to fund: yes to capacity-building projects and no to capital campaigns, for example.
2. If You Don’t Stand for Something, You Will Fall for Anything
At The Ford Fund, we agreed to award grants that support three key impact areas: essential services, education and entrepreneurship, partnering with communities where The Ford Motor Company had a presence. We established a clear purpose — here’s why we do what we do – and developed a strategic framework around it.
Setting up this structure allows you to:
- Set your funding priorities and guardrails,
- Give yourself a reason to say yes — and no — to grant proposals,
- Establish a process for innovative thinking that fits within your strategic framework.
3. Develop Strategic Partnerships
Choose wisely. The partners you select will determine your footprint in the community and the impact of your grant making. Look for community partners that share your values and strongly reflect the communities they serve. Do they have the capacity to grow and transform? Can they engage their communities with volunteer opportunities? The goal is quality over quantity — a smaller number of carefully selected strategic partners allows your team to spend less time managing and more time engaging with the community.
At the Ford Fund, for example, we developed a strategy to coordinate local dealer philanthropy with our nonprofit contributions. By teaming with local dealers, we were able to leverage established community partnerships to maximize our impact.
4. Develop Signature Programs
Branded programs take your strategic partnerships to the next level. They should reinforce agreed-upon values and focus on the mission. You fund the program; your community partner delivers the program.
At the Ford Fund, for example, we launched global Ford Resource and Engagement Centers, a first-of-its-kind network of company-sponsored community facilities that bring nonprofits together to meet local needs. Services at these centers include free tax, legal, arts and continuing education classes for residents, as well as a client-choice food pantry.
You can also consider growing existing programs. At the Ford Fund, we expanded Driving Skills for Life, a free safe-driving program for teens, to new drivers around the world – including women in Saudi Arabia.
5. Communicate Your Vision
You have a solid strategic framework, strong partnerships and focused programs – so what’s next? Tell your story with a strategic communications plan that:
- Proactively articulates your vision to key stakeholders,
- Establishes your foundation as a thought leader in your focus areas,
- Engages your partners to share stories about community impact.
The more key audiences know about what you stand for, the greater the likelihood you’ll maintain and grow partnerships with purpose and attract new opportunities where you can truly make a difference.