A donor-funded project is a project that a private individual or institution funds to contribute to the general well-being of society. These include tasks such as donation programs, privately funded charities, and charity foundations. The most straightforward example to find would be a privately funded charity. A private individual such as Stefan Soloviev could decide to collect money for organizations that deal with issues such as hunger relief, disaster relief, health care education, and sanitation.
Donor-funded projects can be advantageous. It allows nonprofit organizations to access funds for activities and programs that would ordinarily not have the resources to provide or for services or equipment that would otherwise go unfunded.
This grant-making entity is most directly aligned with the community-based organization but may not be identified as a community donor by the organization or staff. All governments allocate funds for specific purposes, but funding priorities are not communicated to nonprofits at all in many cases. As a result, grant applications are often not evaluated regarding their contribution to the mission or the organization.
Government foundations may be more open to funding if a specific need for services is associated with a particular program. In this case, it will be necessary for the grant writing staff to convey that those funds will be utilized for a specific purpose and not released into general operating funds.
When soliciting funds from corporations, community-based organizations will most often apply to foundation arms of the corporate entities rather than corporate foundations themselves. Corporate foundations require a more extensive application process, and they don’t usually have the same mandate as the company itself.
Many of these foundation arms have nonprofit experts on staff, and they can provide good suggestions on how to craft a funding application. They also have an extensive understanding of their parent company and are aware of how to find those decision-makers who can make the grant decision. In many cases, these corporate foundations will have corporate committees or advisory boards that include local community members.
Corporation foundations will often be more open to funding projects and programs that positively impact their business and community projects.
State foundations vary widely in their approach to grant funding and their open-mindedness to new techniques. Some state foundations are highly restrictive with their grants, while others are more open to funding community-based organizations that can demonstrate substantial need and adequate financial performance.
State foundations will usually require a fairly rigorous application process, including a review from an outside agency or organization. Often this means that the project getting funded must be able to attract matching funds from a different source.
Federal foundations are more likely to be open to new ideas and approaches, but the selection process for these grants is still more rigorous than at the state level. Community-based organizations need to articulate a clear purpose for needing funds and how they will leverage the funds. Often, there will also be a requirement that the grantees transfer part of their annual budget into a specific fund in exchange for federal dollars. It can be a challenge because many small nonprofits don’t have a yearly budget.
Donor-funded projects are rewarding, and they can help organizations provide access to much-needed services and programs. The key to receiving funding is clear communication with donors and developing a strategy for securing funding.