What does your application process say about you?

As the philanthropic field continues to evolve and explore critical issues including equity, accountability, relationship-building, listening, and trust-based approaches, the grants application process (or lack thereof) often serves as a focal point for both discussions and contention between funders and nonprofits. Some funders have an open application process whereby nonprofits submit an application for a grant, typically based on a set of eligibility criteria provided by the funder. Others do not accept applications and instead opt to invite a select group of potential partners to apply for funding. Some funders leverage different processes for different types of grants. Each approach has opportunities and challenges, and the decision about which approach makes sense for your philanthropy must be driven by your values and goals.

The most recent analysis of the nearly 100,000 funders in the Foundation Directory Online database revealed that only 28% accepted applications from nonprofits.  Understanding that many of the funders listed in that database are very small organizations with few or no staff, the researchers narrowed their search to only foundations with at least $100 million in assets (those foundations combined account for the vast majority of foundation giving in any given year), and the number accepting applications increased to 58%.

Many funders and nonprofit leaders assert compelling arguments that failure to accept applications opens foundations to risks that include:

  • Missing opportunities to fund important work, particularly new, smaller, or not-well-known partners, who are nevertheless doing innovative and vital work
  • Perpetuating inequities, particularly as many foundations fund the same groups year over year
  • Overlooking innovation and/or changes in the field. Unless you are continually scanning and/or researching the areas in which you fund, you may risk having your approaches go stale
  • Not hearing from community leaders and organizations who are closest to the emerging issues and changing conditions that could inform the foundation’s work

On the other hand, there are circumstances where an invitation-only approach may make sense, such as:

  • Organizations with few or no staff, which do not have the bandwidth to handle the masses of applications they might receive and would therefore have to give little attention to something that a nonprofit may have put significant effort into
  • Philanthropies in the process of spending down that don’t want to build new relationships as they have committed their remaining funds to specific grantees
  • Funders in a start-up phase who want to begin small and test out their funding strategy

As with many things in philanthropy, there are no easy answers, but as you consider which approach may make the most sense for you, we offer you some questions to consider within the principles of effective family philanthropy.

Read the full article about effective family philanthropy applications by Miki Akimoto at the National Center for Family Philanthropy.