The Art and Science of Foundation Fundraising

1

• The Art and Science of Foundation Fundraising

David Tillipman, Ph.D. Director of Foundation
Relations University Advancement November 1, 2006
2
PRESENTATION GOALS

• Overview of National Foundation Fundraising
  Trends
• USC Foundation Fundraising Performance Issues
• Basic Strategies to Increase Foundation
  Fundraising
• The Role Of Background Foundation Research A
  Case Study Looking At Educational Policy Research
• USC Foundation Relations Office Services

3
What is a Foundation?(Foundation Center, 2006)

• The philanthropic world consists of two principal
  types of foundations,
• private and public. Private foundations are the
  primary source for USC
• support. A private foundation can be defined by
• Nonprofit and nongovernmental
• Have its own funds or endowment provided by a
  family, individual or a for-profit company
• Managed by it own trustees or directors
• Established to aid educational, social,
  religious, or other charitable activities serving
  common welfare
• Makes grants, primarily to other nonprofit
  organizations and
• Required to file a 990-PF form with the IRS
  annually

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Types of Foundations(Foundation Center, 2006)

• There are three different types of private
  foundations
• Independent or Family Foundations receive
  endowments from individuals or families (and, in
  the case of family foundations, they continue to
  show measurable donor or donor-family
  involvement)
• Company-Sponsored or Corporate Foundations
  receive funds from their parent companies,
  although they are legally separate entities
• Operating Foundations run their own programs and
  services and typically do not provide much grant
  support to outside organizations

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Where Are Foundations Located?(Foundation
Center, 2006)

• Distribution of National Foundations

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Nearly 50 of Foundations Established After
1989(Foundation Center, 2006)
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Change in Foundation Giving 1995-2005(Foundation
Center, 2006)
8
Foundation Assets Continue to Grow(Foundation
Center, 2006)
9
Foundation Giving Continues to Increase(Foundatio
n Center, 2006)
10
Foundation Grantmaking Strategies
Change(Foundation Center, 2006)
11
What Are Foundations Preferred Funding Areas?
(Foundation Center, 2006)
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Growth in Foundations 1990-2005Summary

• Close to half of larger foundations were formed
  after 1989
• Between 1990 and 2005, the number of active
  grantmaking foundations more than doubled from
  approximately 32,000 to over 68,000
• Only 2 of foundations held the vast majority of
  assets in 2005
• In this same time period, assets of active
  grantmaking foundations jumped from 142.5
  billion to 531 billion
• Following the rise of assets, giving more than
  tripled from 8.7 billion in 1990 to 33.6
  billion in 2005
• Adjusting for inflation, giving more than doubled
  between 1990 and 2005

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PRESENTATION GOALS

• Overview of National Foundation Fundraising
  Trends
• USC Foundation Fundraising Performance Issues
• Basic Strategies to Increase Foundation
  Fundraising
• The Role Of Foundation Background Research A
  Case Study Looking at Educational Policy Research
• USC Foundation Relations Office Services

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Foundation Giving To USC

• Fiscal Year Total
  Foundation Percent of Total
• 
  Giving to USC USC Fundraising
• 2000-2001 78,902,519 26.9 of Total
  Giving
• 2001 2002 192,874,376 33 of Total
  Giving
• 2002-2003 112,206,152 36.7 of Total
  Giving
• 2003-2004 71,539,520 20.2 of Total
  Giving
• 2004 2005 60,779,261 17.7 of Total
  Giving
• 2005-2006 66,906,349 16.2 of Total
  Giving
• Average - 97,201,362 25.2

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USCS Foundation Fundraising Compared To Peer
Institutions

• Year Total USC Total USC USC
  National Rank Foundation Giving To Peer
  Institutions
  Fundraising
  Foundation (CAE)
• 
  Fundraising
• 
  Stanford Harvard Cornell Duke Yale
  Columbia Penn Berkeley UCLA
• 2000-2001 293,309,089 78.9
  12th 100.6 212.7
  48.7 100.4 80.5 65.6
  92.2 39.9 119.1
• 2001-2002 585,161,932 192.9
  1st 82.5 126.2
  52.8 114.0 70.5 74.6
  95.7 52.1 117.6
• 2002-2003 305,981,845 112.2
  9th 125. 99.0
  58.2 115.5 63.7 83.8
  97.5 58.5 153.8
• 2003-2004 354,481,220 71.5
  13th 165. 151.1
  45.5 96.2 69.5 74.9
  108.4 47.9 123.3
• 2004-2005 344,265,008 60.8
  20th 192 160.4
  40.3 110.7 85.0 73.1
  106.5 75.9 139.0

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USC Foundation Fundraising(By School)

• 2000-2001 2001-2002
  2002-2003 2003-2004 2004-2005
• Annenberg 2,520,736 105,494,09
  9,292,878 6,705,239 6,873,316
• Business 1,887,836 1,329,195
  856,529 745,108
  1,896,667
• Cinema 3,150,170
  2,091,031 1,297,550
  906,928 1,932,890
• Dentistry 762,718 535,946
  353,765 618,718
  697,951
• Education 847,728 527,112
  568,540 1,414,468
  1,148,526
• Engineering 3,274,056 3,540,223
  4,505,081 5,344,593
  4,813,322
• Gerontology 1,007,692 732,951
  1,062,524 920,601
  1,280,392
• LAS 11,390,217 8,393,44
  5,867,095 8,106,601 5,361,305
• Keck 401,316 13,757,606
  6,567,490 9,018,648 12,418,725
• Law School 1,235,782 2,018,546
  1,968,083 862,471 723,606
• Athletics 731,980 825,852
  648,880 539,489 1,154,768
• Architecture 449,025 757,548
  349,478 213,020 153,075
• Music 324,673 372,437
  439,908 366,549 657,579
• Pharmacy 222,251 1,051,092
  1,030,554 990,289 1,165,963
• SPPD 1,896,827 1,723,819
  2,237,493 2,546,033 1,940,586
• Social Work 56,924 366,687
  227,340 287,286 145,083
• Theater 30,400 115,770
  117,320 80,200 208,450

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USC Foundation Gifts (By School)

• 2000-2001 2001-2002
  2002-2003 2003-2004 2004-2005
• Business 81 502
  348 249 224
• Cinema 66 50
  48 47
  41
• Dentistry 20 24
  16 18
  21
• Education 22 16
  15 28
  28
• Engineering 81 93
  83 71
  64
• Gerontology 55 42
  42 40
  24
• College 115 104 107 192
  151
• Keck 169 193 155
  163 167
• Law 81 82 57 47
  52
• Annenberg 37 64
  71 57
  60
• Social Work 11 19
  24 32
  19
• Architecture 16 20
  20 15
  31

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California Versus National Foundation Support
To USC(Academic Units Including Keck)

• Year California National International
• 2000-2001 29,172,255 (778 awards)
  7,376,513 (500 awards) 93,381 (8
  awards)
• 2001-2002 37,300,151 (789 awards)
  9,936,587 (550 awards) 247,541 (8
  awards)
• 2002-2003 23,290,276 (629 awards)
  12,527,428 (502 awards) 237,984 (4
  awards)
• 2003-2004 25,781,589 (605 awards)
  13,344,022 (384 awards) 260,000 (6
  awards)
• 2004-2005 129,055,737 (600 awards)
  12,072,823 (385 awards) 240,000 (5
  awards)
• 2005-2006 TBD TBD TBD
• TOTALS 244,600,008 (With
  Annenberg) ( 81.2) 55,257,373
  (18.4) 1,078,906 (.4)
• 144,600,008 (Without
  Annenberg) (72) 55,257,373
  (28) 1,078,906 (.5

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California Versus National Foundation Support
To USC(Number Of Awards 2000-2005)

• 
  California Support
  National Support International
• Athletics 778 508 0
• Annenberg 1,477 187 0
• Business 817 1,131 2
• Cinema 180 102 2
• Dentistry 101 20 0
• Education 77 51 0
• Engineering 54 256 10
• Gerontology 179 44 1
• ISD 71 29 8
• Law 278 91 1
• LAS 395 287 12
• Medicine (Keck Norris) 1,369 613 5
• Music 159 69 4
• OS/OT 6 1 0
• Pharmacy 91 56 0
• SPPD 268 75 3
• Social Work 109 12 0

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PRESENTATION GOALS

• Overview of National Foundation Fundraising
  Trends
• USC Foundation Fundraising Performance Issues
• Basic Strategies to Increase Foundation
  Fundraising
• The Role Of Foundation Background Research A
  Case Study Looking At Educational Policy Research
• USC Foundation Relations Office Services

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Getting In Shape for Foundation Fundraising
The Development of a Foundation Strategic Plan

• Determine priority projects or programs for
  foundation support
• Who are the right School, University External
  Partners for your projects
• Who are the right foundation prospects for your
  projects
• Determine internal and broader institutional
  linkages
• Develop foundation contacts and relationships
• Review the plan with appropriate colleagues

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Not All Foundations Are Created Equally

• Fine tune your cultivation and solicitation
  strategy to recognize
• Focus Interest in strategic philanthropy
• Fluctuations in giving amounts
• Regional versus national versus international
• Size matters small, medium and large asset base
• Top down versus grassroots
• Trend towards partnerships versus traditional
  donor/donee relationships
• Shifting Foundation Culture
• These differences impact how proposals are
• prepared presented

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Foundation Diversity The Spice of Life

• Compare Andrew Mellon Foundation vs Haynes
  Foundation vs Electronic
• Arts Corporate Giving vs Gordon Moore Foundation
• What would be the difference in how you prepare?
• Would your proposal content and format be
  different?
• Would USC institutional assets be different?
• Would USC institutional strategic relationships
  be different?
• Would your expectations be different?

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Key Meeting Call Objectives

• Connect with key decision makers
• Establish common ground
• Reciprocal exchange
• Demonstrate linkages
• Confirm giving preferences, guidelines, and
  enquire about future trends at the foundation
• Explore partnership potential
• Describe institutional priorities and projects
• Secure advice on strategy and next steps
• Obtain agreement to review draft before
  submission
• It is essential to followup all calls and
  meetings promptly.

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Your Winning Proposal

• Complies with foundation giving criteria
• Clearly customized to the individual funder
• Submitted in a timely fashion to meet required
  deadlines
• Follows Foundation proposal guidelines
• Compelling and attractive project
• Appropriate workplan and management structure
• A correct ask amount/costing rationale
• The correct Faculty member(s)
• Correct Internal or External Partners
• Proposal is succinct, clear and reader friendly
• Includes all necessary USC attachment documents
• Cover letter from appropriate person
• Strategic Leveraging of USC Relationships
• A COLD PROPOSAL WITHOUT PRIOR CONTACT WITH A
  FOUNDATION STAFF MEMBER IS RARELY SUCCESSFUL

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Proposal Preparation Checklist

• RFP/Documents
• Internal or External Partners?
• Technical Strategy
• Personnel
• Budget
• Technical Proposal
• USC Documents, Support Letters, Cover Letter,
  Etc.
• Production
• Finishing Touches
• Packaging
• Proposal Delivery/Logistics
• Followup With Funder

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Making the Ask There is More Than One Entry
for Foundation Proposals

• Avenue A
• Draft proposal that has been reviewed by
  foundation officer
• They become the champion and shepherd it through
  the process
• Avenue B
• Final proposal prepared
• Formal request made to CEO and/or their Board
• Avenue C
• Final proposal prepared
• Submitted by President to President
• Avenue D
• Final proposal prepared
• Submitted by volunteer/Board member to President

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Keys to Successful Foundation Fundraising

• Foundation Background Research Project
  submissions need to match the needs and interests
  of the funder attentive to foundation strategic
  developments
• Proposal protocol Submissions need to
  absolutely follow foundation proposal format
  guidelines and timelines
• Strategic Cultivation Leveraging personal
  support through school and institutional linkages
• Building and sustaining meaningful relationships
  and partnerships with foundations
• Continual meaningful stewardship of success and
  unsuccessful project proposals
• Success with foundations takes time You should
  expect to be turned down. Continue to work on
  developing personal relationships with the
  funders. Stick with it!

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Always Be Thinking About

• Right Timing
• Right Project
• Right ask amount
• Right Solicitor

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Foundations Supporting Higher Education
Issues(A Partial List)

• Bill and Melinda Gates Foundation
• Ford Foundation
• J. Paul Getty Trust
• Robert Wood Johnson Foundation
• Lilly Endowment
• W.K. Kellogg Foundation
• William and Flora Hewlett Foundation
• David and Lucille Packard Foundation
• Andrew W. Mellon Foundation
• Gordon and Betty Moore Foundation
• John D. and Catherine T. MacArthur Foundation
• California Endowment
• Starr Foundation
• Annie E. Casey Foundation
• Rockefeller Foundation
• Kresge Foundation
• Annenberg Foundation
• Charles Stuart Mott Foundation
• How many have you developed relationships with?

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PRESENTATION GOALS

• Overview of National Foundation Fundraising
  Trends
• USC Foundation Fundraising Performance Issues
• Basic Strategies to Increase Foundation
  Fundraising
• The Role Of Foundation Background Research A
  Case Study Looking At Educational Policy Research
• USC Foundation Relations Office Services

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Which Educational Policy Areas Do Foundations
Support?(From Ferris, Hentschke and Joy, 2006)
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When Do Foundations Want to Get Involved in the
Educational Policy Process?(From Ferris,
Hentschke and Joy, 2006)
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Where Do Educational Foundations Want To Get
Involved? (From Ferris, Hentschke and Joy, 2006)
35
Which Educational Grantmaking Activities Do
Foundations Support?(From Ferris, Hentschke and
Joy, 2006)
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PRESENTATION GOALS

• Overview of National Foundation Fundraising
  Trends
• USC Foundation Fundraising Performance Issues
• Basic Strategies to Increase Foundation
  Fundraising
• The Role Of Foundation Background Research A
  Case Study Looking At Educational Policy Research
• USC Foundation Relations Office Services

37
USC Foundation Relations FY 2006-2007Activities

• 1. Secure support for universitys
  priorities as identified by the President,
  Provost and Deans
• 2. Increase numbers and geographical
  diversity of participating foundations beyond
  traditional USC supporters to fund university
  priority projects
• 3. Increase USC visibility and communication with
  national/international foundations
• 4. Expand USC internal capacity for foundation
  fundraising
• 5. Development and maintenance of internal
  foundation infrastructure systems

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USC Internal FoundationProduction Development
Model
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Foundation Relations Prospect Development Model
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USC Foundation Relations Is Involved With The
Following Schools

• Marshall School of Business
• Annenberg School for Communication
• Cinema
• School of Dentistry
• Rossier School of Education
• Viterbi School of Engineering
• College of Letters, Arts Sciences
• Keck School of Medicine
• Gould School of Law
• School of Architecture
• School of Policy, Planning and Development
• School of Social Work
• School of Gerontology
• Theater
• Thornton School of Music
• Provost Office of Research Advancement
• Pacific Counsel of International Policy
• Lusk Center for Real Estate

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Foundation RelationsContact Information

• David Tillipman Director of Foundation
  Relations
• (213) 740- 7953
• tillipma_at_usc.edu
• http//www.usc.edu/giving/foundation/