Dear Andrew:

Re: spending more time with potential funders (foundations):

The Giving Institute (formerly American Association of Fund Raising Counsel) won't release its statistical analysis of giving for 2006 until July 1, but it will not be materially different from the 2005 results or any year for which the statistics have been compiled. Of the $260 billion (in round numbers) contributed to non-profits in 2005, living individuals gave $199 billion, or 76.5 percent of total giving. Individuals gave another $17 billion through bequests and other testamentary gifts, or 6.7 percent. Thus individuals, whether living or otherwise engaged, gave a total of $216 billion, or 83.2 percent of total giving.

The remaining $44 billion was given by corporations ($14 billion, 5.3 percent) and foundations ($30 billion, 11.5 percent). The corporate percentage of the pie has remained pretty constant over many years. The foundation slice has grown by four points or so in the past decade, probably due to two phenomena: 1) foundations are required to spend only five percent of their holdings each year (grants and expenses) and thus have seen their portfolios rise with the economy and markets, and 2) increasing numbers of individuals and families have established foundations to manage what otherwise would be individual giving.

So where do gifts come from? Individuals - they give 83 percent of gifts. Where is the first place to which nearly every nonprofit thinks to turn when they need money? Foundations - but they give only 11 percent, and they are awash in proposals which means you have to get in line. By all means, spend time cultivating foundations along with corporations, but be aware that it is likely to be a long courtship. I advise committing more resources to increasing the sophistication your individual solicitations. Follow the money.