Junk Money?

In the field of fund development, grants aren’t all that well respected. Once, after I was well known for bringing in millions of grant dollars, a local fund development director recognized me as “the woman who raises all the junk money.” Junk money?

Fund development professionals focus on individual giving because it’s the largest piece of the philanthropic pie. Individual giving represented about 73% of all giving in 2011, and 81% if you throw in bequests–the dollars total about $242.20 billion. Fund development professionals also focus here because the dollars are generally flexible, renewable, and growable. Individual giving done right can be the beanstalk to the golden eggs that just keep coming. I get that.

But grant funding is not insignificant. The quip, “A billion here, a billion there, and pretty soon you’re talking real money,” (attributed to the late Senator Everett Dirksen), is apropos. My really rough estimate is that about $551.02 billion in grants were made by foundations, corporations, and the federal government in the last year. Giving USA’s 2011 report shows roughly $56.22 billion (19%) of all philanthropic dollars in 2011 came from foundations and corporations. USAspending.gov shows that the feds made $494.8 billion in grants in 2012.

I understand that 2011 is an apple and 2012 is an orange and that my estimate isn’t adequate for a research report, but my point is that $551.02 billion, give or take a few billion, is still a lot of money. A lot more than that reported for 2011 individual giving and bequests combined. And while federal grants may not fit within the academic field of philanthropy, almost every decent sized nonprofit organization gets or wants federal funding.

I think there are a number of reasons that grant funding is a second-class consideration in philanthropic circles. Grant work is often poorly integrated with strategic planning. Too many organizations run after grant dollars rather than after grant impact. The prescriptive nature of government grants limits their usefulness for many purposes. And much more. I’ll be blogging about all of those.

To produce great results and propel organizations in the right direction, grant funding must be used correctly. Grant funding is an incredibly versatile tool, like a Swiss army knife, but it is not always glamorous. And it’s not the money that is “junk,” but rather ill-conceived and poorly administered programs.

— Barbara Floersch, Executuve Director

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