Vol. 20, No. 5 • May 2000

The Foundation Center (http://www.fdncenter.org) is a national nonprofit organization that was established by foundations in 1956. The center’s mission is to foster public understanding of the foundation field by collecting, organizing, analyzing, and disseminating information on foundations, corporate giving, and related subjects. We accomplish this mission in several ways: we maintain a database that contains information on virtually every active grant making foundation in the United States, we operate five libraries and maintain the Cooperating Collections network, we publish titles in the field of philanthropy and nonprofit management, we conduct research on trends and growth in the foundation field, we provide information electronically via an extensive Web site, and we offer various educational programs related to the funding research process.

Like many of you, I spent much of my childhood in libraries, so one of my favorite aspects of my work is the opportunity it gives me to travel the countryside visiting libraries. I have been given tours of many new buildings that have resulted from successful fundraising campaigns, and I’ve witnessed firsthand the need for growth and expansion of libraries as they struggle to provide information delivery in the 21st century.

This article will highlight some of the top foundations and top grants in the library field, give you background information on the field of foundations, provide you with a guided tour of the grant seeking process, and conclude with a list of fundraising resources and components of key proposals.
 

A Brief History of Funding
It is fitting that foundations continue to play a role in library expansion, since the history of organized philanthropy and the rise of the public library in America are closely tied to one another. Andrew Carnegie, one of the greatest of the early American philanthropists, was deeply committed to establishing free public libraries. There were only a few public libraries in the world, when, in 1881, Carnegie began to promote the idea. “Beginning in 1886, he used much of his personal fortune to establish free public libraries throughout America. In all, he spent $56 million to create 1,681 public libraries in nearly as many U.S. communities and 828 libraries in other parts of the English-speaking world.” ¹

Last year marked the 100th anniversary of Andrew Carnegie’s support for the development of 65 branch libraries of the New York Public Library system. In commemoration of this anniversary, the Carnegie Corp. awarded a series of gifts to selected libraries. As another century turns in the history of libraries and philanthropy, foundations are continuing the tradition of giving to libraries. In 1998, a total of $142,029,000 in foundation grants was awarded to libraries by a sample of more than 1,000 larger foundations. ² In the two charts, you can review lists of the top ten grants and foundation givers to libraries in 1998, the most recent year for which this data is available.
 

The Bill & Melinda Gates Foundation: Major Givers
The Bill & Melinda Gates Foundation has received a lot of media attention in recent months due to its rapid growth and high-visibility grants to many areas, including libraries. In a press release dated January 24, 2000, the Bill & Melinda Gates Foundation announced that it had received a donation of Microsoft stock that increased the foundation’s asset size to approximately $21.8 billion, making it the largest foundation in the world. Because the majority of the Gates Foundation library grants were given in late 1998 or 1999, their giving is not yet reflected in published Foundation Center data. However, the Bill & Melinda Gates Foundation Web site (http://www.gatesfoundation.org/learning/libraries/default.htm) provides a lot of useful information for interested libraries.

Many comparisons have been drawn between Carnegie’s giving to libraries and the Gateses’ current giving interests. Like Carnegie, the Gateses’ motivation for giving to libraries is rooted in a belief that the public library can act as an equalizer by providing access to information for all. The Gates Foundation strategy is to bridge the “digital divide” by funding technology in libraries around the country. The Gates Foundation Library Program (http://www.gatesfoundation.org/learning/libraries/libraryprogram/default.htm) makes grants to public libraries for purchasing computers and hardware to bring Internet access to their patrons. Several record-breaking grants have been made through this foundation since the publication of our last data sets. According to the grant summary, during the life of the program (which began in October 1997), the foundation has awarded a total of $33,198,770. ³
 

Understanding Foundations and Grant Seeking Processes
These are just two of the more than 50,000 private grant making foundations that exist in the U.S. today. By conducting focused research, grant seekers can compile a targeted list of foundations based on a much larger pool of funders. However, before you begin to research, it’s important to understand the field of foundations. Let’s start with some basic definitions.

The Foundation Center uses the tax and legal definition for the term “private foundation.” A private foundation is a nonprofit, nongovernmental organization with a principal fund or endowment of its own, managed by its own trustees or directors, established to maintain or aid charitable activities serving the common good. There are three types of private foundations: independent, corporate, and operating foundations. Independent foundations are grant making organizations whose funds are derived from an individual or family, such as the Bill & Melinda Gates Foundation. This category is the largest, and the majority of giving to libraries comes from independent foundations. Corporate foundations are private foundations whose grant funds are derived from the contributions of a profit-making business, such as the Hewlett-Packard Company Foundation. A corporate foundation may retain close ties with the donor company, but it is a separate legal entity. Operating foundations are private foundations whose primary purpose is to conduct research, social welfare, or other programs determined by its governing body or establishment charter. An operating foundation may award some grants but the total is relatively small compared to the funds used for the foundation’s own programs. The largest operating foundation in the country is the J. Paul Getty Trust in Los Angeles.

All private foundations are required by the IRS to pay out 5 percent of the market value of their assets each year and each foundation also must file a 990-PF form with the IRS. This document is often used by researchers to identify grants given by foundations, since most foundations do not have the staff to produce annual reports or develop Web sites. This document is available at all Foundation Center libraries and at some Cooperating Collections.

Corporate giving is another source of potential revenue for libraries that are seeking funds, equipment donations, or volunteer assistance. I mentioned above that corporations can establish private foundations, but they also have another option for giving and that is through what is called a “direct corporate giving program.” These are grant making programs that are administered within a profit-making company, and their annual grant totals generally directly relate to their current profits. They are not required to file a 990-PF with the IRS, so it is often difficult to find information on these direct corporate giving programs. In-kind gifts (which are non-cash donations) and employee volunteer time are two types of support that have become increasingly attractive to corporate giving programs in recent years. Some corporations have opted to have both a direct corporate giving program and a corporate foundation, so this means you have to carefully read the guidelines for each to determine which is the best prospect for your library.

When researching foundations to identify appropriate prospects, keep in mind that your basic research strategy should be to establish a match between the activities/goals of your library and the funding interests of a foundation. You should aim to establish a partnership to achieve common goals. To assist grant seekers with the research process, The Foundation Center has established a “prospect worksheet” (http://fdncenter.org/onlib/prosp.html) for this type of research. The worksheet helps you develop your search strategy by asking you to provide “vital statistics” about your organization that will shape the search. It outlines the basic research approaches to foundation grant research, which are to use subject, fields of interest, geographic focus, and type of support (by type of support, I mean building/renovation, program development, general operating, etc.) criteria to target appropriate funders. ⁴
 

Resources to Use for Foundation Grant Research
This research can be conducted at any of The Foundation Center’s libraries or Cooperating Collections, since all of our libraries and affiliates are free and open to the public. The Foundation Center operates five main libraries—in New York, Washington, DC, San Francisco, Cleveland, and Atlanta. Additionally, our more than 200 Cooperating Collections around the country also house our database and print directories for prospect research. You can find contact information for all of these libraries on the home page of our Web site at http://www.fdncenter.org. The DIALOG database, files 26 and 27, also contains Foundation Center data that you can use to conduct fundraising research.

The best way to structure a search is to look at descriptions of recently awarded grants that have gone to programs or projects similar to your own in order to build a list of prospective names. Remember to be creative in your search strategy by designing several different searches that represent different aspects of the services your library provides. In addition to searching for foundations that have had a history of giving to libraries, I recommend that in one search you identify funders that are interested in a particular population group that your library is serving, or a particular program interest (such as adult literacy), or a certain type of support (such as for conservation).

We publish the Grant Guides series, and FC Search: The Foundation Center’s Database on CD-ROM, both of which contain this data and are available for free use in all Foundation Center libraries and Cooperating Collections. FC Search is the most comprehensive resource in our libraries for researching foundation grants for nonprofit organizations, since it contains profiles of more than 50,000 foundations and 200,000 grant descriptions for recently awarded grants. Many grant seekers also use the Chronicle of Philanthropy (http://www.philanthropy.com) or file 27 on DIALOG to track recently awarded grants.

Once you have a list of prospective foundation names, you can then look up full profiles for these funders in numerous sources. In addition to our own publications, a foundation’s own Web site is often the best place to gather in-depth information. Our Web site provides a gateway to all the foundations in the country that maintain Web sites (http://fdncenter.org/grantmaker/index.html). If the foundation you are researching does not have a Web site, you might try our free look-up tool, “Foundation Finder,” (http://lnp.fdncenter.org/finder.html) to obtain basic contact information. File 26 on DIALOG also provides descriptive profiles of foundations. I’ve listed even more online grant resources in the accompanying sidebars.

Regardless of the sources you use to gather prospects for your library, you will want to be consistent in noting certain details. Look into the funding history of each of your prospects. Have they been funding projects in your subject area? Look for and read a funder’s purpose and activities statement when it is available. This will give you insight into the organization’s goals. Review selected grants that a foundation has made to determine an appropriate dollar amount request. Compare several years’ worth of grant lists, if possible, to help you determine whether a giving pattern exists that matches your requirements. Approaching more than one potential funding partner is generally a good idea; request an appropriate amount of your overall budget from each, based on your research. Always follow a foundation’s guidelines for applying, if available. Pay particular attention to initial approach information, since many foundations prefer that you send a letter of inquiry prior to actually submitting a full proposal.
 

Proposal Writing Basics
And speaking of the full proposal, this is one of the single greatest sources of anxiety for the novice grant seeker. To demystify the proposal process a bit, I’ve made a list of the key components that foundations expect to see in a grant proposal.

• Executive Summary: This is the first part of your proposal, but it is the last thing you will write. It can vary in length from one paragraph to one page, depending on the length of your proposal.
• Statement of Need: This section describes the problem, issue, or need your organization seeks to address.
• Project Description: This section describes in detail how your project/program/organization will address the identified need. It includes your goals and objectives and how you plan to evaluate your success.
• Budget: In this section, you indicate what the project will cost in dollars and cents, and how you will support it in the future. Since so many foundations prefer to fund program development as opposed to general operating support, we advise people to factor operating expenses into a program budget.
• Organization Information: Here you should indicate to the funder why your organization is qualified to address the need you’ve identified and to conduct the project you’ve described.
• Conclusion: In this very short (one to two paragraphs) ending section, you wrap up your request, restating the need and how your project can respond to that need.

The Quest for Gold
A metaphor we often use to describe the grant seeking process is that of prospecting. Think of the gold rush days and those tireless miners digging for nuggets of gold. When you begin to wade through all of the foundation profiles and grant descriptions you’ll find it to be an apt metaphor.

Here are two things to keep in mind as you proceed with your prospect research:

1. You must do your homework! Being informed always gives you an edge, and this is especially true in the area of funding research. Grant makers look for evidence that you’ve done this homework before you apply. Grant seeking can be a time-consuming process, but the payoff can be well worth the effort.

2. Keep in mind that support from foundations should be just one part of an overall fundraising strategy and plan. Other sources might include individual gifts, special events, and government funding.

Although by now you may be feeling overwhelmed by the amount of work involved in the grant seeking process, keep in mind the magic that you are making. I have my own favorite metaphor for this process: I like to think of it as a modern-day alchemy. By conducting thorough research to make the right connections, we have the ability to transform paper into gold. Happy prospecting!
 
 

Janet Camarena has been an information specialist working for The Foundation Center in a variety of roles for 5 years. She has been an active trainer, speaker, and reference librarian there; currently she is the liaison to The Foundation Center’s Cooperating Collections in the Western U.S. Recently she has begun presenting “The Foundation Center’s Guide to Grantseeking on the Web: A Hands-On Training Course.” Camarena has an M.L.I.S. from San Jose State University. Her e-mail address is JFC@email.fdncenter.org.
 

References
1. Gregorian, Vartan. “Libraries and Andrew Carnegie’s Challenge.” President’s Essay from the 1998 Carnegie Corp. of New York Annual Report. (http://www.carnegie.org/sub/about/pessay/pessay98.html)
2. Lawrence, Steven, et al. Foundation Giving Trends. The Foundation Center. (2000): p. 8.
3. “Library Program Grant Summary as of September 1999.” Bill & Melinda Gates Foundation U.S. Library Program Grants. (http://www.gatesfoundation.org/learning/libraries/libraryprogram/grantees.htm)
4. Johnson, Pattie J. & Morth, Margaret (eds.), Foundation Fundamentals, The Foundation Center (1999) New York.