foundations 101 presented by: michael marcus consultants for community resources (847) 571-1802

Foundations 101Foundations 101

Presented by: Presented by:

Michael MarcusMichael Marcus

Consultants for Community ResourcesConsultants for Community Resources

(847) 571-1802(847) 571-1802

Distinguishing Characteristics of Distinguishing Characteristics of FoundationsFoundations

Foundation Type

Source of Funds

Geographic Focus

Kinds of Funds

Charge or Purpose Public Charity

Community: About 900 in

the U.S.

Contributions from

individuals, families, corporations,

and other entities

Local community

area

Designated, restricted, unrestricted,

“hybrid.” Donor/advisor

Broad, public benefits,

community needs in areas of health,

social service, education, arts and

humanities, and civic affairs

Classified as “public charity,” favorable tax implications, asset management by community-based trustee banks, public

distribution committee

Corporate: About 3,000 in

the U.S.

Corporate profits

Communities in which corporation does business

Not applicable

Determined by the corporation – scope may be broad or limited

Classified as private foundation, less favorable tax implication, asset management at

discretion of corporation, private


Independent Family: About 47,000 in the

U.S.

Private Assets Determined by the donors – local, national, or international

Not Applicable

Determined by the donors – scope may be broad or

limited

Classified as private foundation, less favorable tax

implications, asset management at discretion of the donors, private


Conversion: About 170 in

the U.S.

Sale of not-for-profit health

providers

Local Community

Area

Usually restricted to

health

Usually determined by documents of sale

Classified as Public Charity

Note: With thanks to the Chicago Community Trust,100 E Wacker Drive, Suite 1400, Chicago, Illinois 60601 (312) 616-8000.,

2004 CONTRIBUTIONS: $254.00 BILLION 2004 CONTRIBUTIONS: $254.00 BILLION BY SOURCE OF CONTRIBUTIONSBY SOURCE OF CONTRIBUTIONS

$192.53Individuals

(75.8%)

$19.56Bequests

(7.7%)

$30.998Foundations

(12.2%)

$10.922Corporations

(4.3%)

Source: AAFRC Trust for Philanthropy/Giving USA 2002Source: AAFRC Trust for Philanthropy/Giving USA 2002

2004 CONTRIBUTIONS: $254.00 BILLION 2004 CONTRIBUTIONS: $254.00 BILLION BY TYPE OF RECIPIENT ORGANIZATIONBY TYPE OF RECIPIENT ORGANIZATION

$93.98Religion

(37%)

$30.48Gifts to Foundations & Unallocated Giving

(12%)

$5.08International Affairs

(2%)

$7.62Environment

(3%)$15.24

Public-Society(6%)

$15.24Arts, Culture

(6%)

$22.86Health(9%)

$25.4Human Services

(10%)

$38.1Education

(15%)

Source: AAFRC Trust for Philanthropy/Giving USA 2002Source: AAFRC Trust for Philanthropy/Giving USA 2002

THE FOUNDATION GRANT THE FOUNDATION GRANT PROPOSALPROPOSAL

The most common format for foundation grant proposal includes six parts:

Executive summary; Description of the organization Need addressed by the proposal Project description (including a plan for

evaluation) Budget Appendix

THE GRANTMAKING THE GRANTMAKING PROCESSPROCESS

• Initial Screening • Review by Staff• Preparation for Board Action • Board Action • Notifying the Applicant • Staff Follow-up • Reporting • Closing the File

THE GRANTMAKING THE GRANTMAKING PROCESS: APPLICATION PROCESS: APPLICATION

• Initial Screening:– Assignment to Staff – Sufficient information – Development of project folder – Determine relationship to foundation’s

policy and program focus – Eligibility, i.e. 501 (c) (3), geography, etc


• Review by Staff :– Further consideration of relationship to

foundation focus – Evaluation of utility of the project – Evaluation of organizational capacity – Review of time table and cost estimates – Review of the organization’s budget and

strategic fundraising plan – Other project and organizational funders


• Review by Staff :– Relationship to other funding made by

the foundation Evaluation of utility of the project

– Review of evaluation component – Submittal to technical experts for

outside review


• Review by Staff :– Site visit, not your ordinary dog and

pony show – Other project and organizational

funders – Staff decision, i.e. hold for further

study, recommends grant, recommend decline, return for re-write and amendment.

THE GRANTMAKING THE GRANTMAKING PROCESS: APPLICATION PROCESS: APPLICATION • Preparation for Board Action

– Summary of proposal prepared and distributed to the Board of Directors or Distribution Committee, including

• history of similar projects • statement of the relationship to foundation

program, policies, and focus • staff recommendations including

contingency requirements, i.e. matching grants, budget revisions, staff hiring, program plan, timelines, etc.

THE GRANTMAKING THE GRANTMAKING PROCESS: APPLICATION PROCESS: APPLICATION • Board Action

– Discussion in light of knowledge, experience, and interests of Board members, Foundation policy and program focus, and available funds:

• Grant or decline • Grant with contingencies • Refer back to Staff for further study .


• Notifying the Applicant – Letter to the grantee including :

• Grant or decline • Grant with contingencies • Refer back to Staff for further study .

– Letter from grantee acknowledging the grant – Transmittal of grant payments on schedule

– Notification of decline, almost always by letter - a call to follow-up is usually okay.


• Reporting – Semi-annual fiscal and program

narrative reports received from grantees;

– Classification of projects in grant taxonomy;

– Annual written report published by the Foundation and made available to the public;

– Reports filed with the IRS


• Closing the File – Make certain project folders contain all

correspondence, reports, and required IRS materials;

– Organization of file for permanent storage.

© Michael S. Marcus, 2002

Private Foundation Private Foundation Grant Proposal ProcessGrant Proposal Process

Michael MarcusMichael Marcus

Consultants for Community ResourcesConsultants for Community Resources

1123 Hull Terrace1123 Hull Terrace

Evanston, IL 60202Evanston, IL 60202

[email protected]@aol.com

847-424-9106 (FAX)847-424-9106 (FAX)

847-571-1802 (Direct)847-571-1802 (Direct)

foundations 101 presented by: michael marcus consultants for community resources (847) 571-1802

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