Why Did We Say No?

While reviewing some statistics of both the Milwaukee and Waukesha Nonprofit Management Funds, I came across a few interesting numbers.


At the Milwaukee-Ozaukee-Washington County Fund, we funded 75% of all applications, and only denied 515 proposals over 20 years. The Waukesha County Fund only declined 20% of its applications saying no to 60 requests during its 16 years of operation.


In trying to analyze why we declined an application, I didn’t focus on the groups that had received at least one grant from the Fund, but rather looked more closely at the 141 nonprofit organizations that had submitted 158 applications, but were never funded by the Milwaukee Fund. I also reviewed the 13 applicants that never received funding from the Waukesha Fund.

 

Before I try to enumerate some of our reasons to decline funding, it is important to put our funding rates into context. Anecdotal data from discussion among committee members about their grant award rates, noted that for most, their numbers were the opposite of those at the Fund. In fact, more than one committee member stated that it was more likely for them to fund only 20-25% of their requests and decline 75-80%. To be fair, some of the larger philanthropic partners have very deep pockets in comparison to our grants budget of approximately $400,000 a year, and therefore, the volume of requests may have been significantly higher than ours. Yet, while I worked to make almost every one of our applications ready for a positive funding decision by the committee, one of the committee members stated that she “worked just as hard to say no to most and fund just a few applications that had the greatest potential for success.”


I guess it is good news that the philanthropic community doesn’t include funding rates as a measure of their success.

 

Across foundations, most applications are declined for one of three reasons: 1) the applicant or application does not align with the mission or field of interest of the funder; 2) the staff or trustees of the foundation do not have confidence in the organization’s capacity and/or in their commitment to achieve the goals/objectives/activities stated in the application; or, 3) the funding source just does not have enough funds to underwrite all of the interesting and worthy applications that it receives. It is not an excuse that foundations run out of money, it is the truth.

 

Back to why the Milwaukee Fund said no to 141 organizations. First, there are two basic reasons that were easy to decline. 1) The organization didn’t fit our guidelines in that their annual budget was too large; the organization was not in our geographic scope; or, that the proposal requested funding for staff of another line item in their annual budget, such as an audit. 2) The application from an unknown group was so incomplete or incoherent there was no chance of making it competitive in an already full roster of qualified applications for very limited dollars.

 

Only a couple dozen of these groups fell within one of these two decline categories. The others were not funded because of a nuanced reason. Almost all of the management or governance projects submitted to the Fund identified a consultant who would assist the organization for the project. Not every consultant identified by the applying organization was qualified for the project, but since we encouraged all groups to identify their own consultative resource, we sometimes declined the application due to shortcomings in the consulting proposal instead of meddling in the process. (This group included Greater Milwaukee Free Clinic, HSC Community Outreach, Ice Age Trail Alliance, St. Clair Management, etc.)

 

Sometimes, the mission of the applicant seemed, to the funding committee, less important than others. For example, organizations with missions that focused on animals always rated lower than those that focused on people. (This meant a “no” for Cats International, Timber Wolf Preservation Society, Wildlife in Need, etc.)

 

Religious entities that applied for assistance in strengthening their church policies and practices were readily declined. (Balm in Gilead For All People Church, Christ Tabernacle Church of God in Christ, Holy Trinity Our Lady of Guadalupe Church, etc.)  

 

Sometimes, an organization did not apply for what might have addressed its most immediate need. For example, one organization had a deficit for more than three years in a row, and the application did not request assistance for fundraising, financial management or Board development, any of which might have helped them improve their bottom line.

 

Several times, an organization would request the maximum amount (in Milwaukee that ceiling was $10,000) but couldn’t justify the amount for the project.

 

A few groups submitted an unrealistic proposal requesting an amount that would have been greater than 10% of their operating budget (which was our guideline). For instance, a small arts group with a $14,000 annual budget requested $7,500 to help them meet their annual budgetary needs. An environmental group with a $16,000 operating budget requested $10,000 for a strategic planning process.  Both requests seemed to be overkill for the size of the organization.

 

The Fund worked to stretch its dollars as often as possible, frequently awarding partial funding for a project, with a caveat that the group needed to raise a cash match, or allowed the organization to renegotiate its contract with a consultant. However, not every group saw this reduced grant as a gift. A few even felt it to be insulting, therefore, they withdrew their application, and four of those groups never returned.

 

While the Fund operated as an unusual funding vehicle, a great deal of time and energy went into proposal review.   As the Fund Advisor, I worked to make nearly every application as competitive as possible.  Yet, it’s important to publicly discuss reasons that the Fund did not support applications. We believe that for the most part, the reasons were rooted in logic and guidelines. Other reasons revolved around what was the best strategy to build capacity at a specific organization. Whether the consumers felt we made the best decision or not, we truly tried to fund, at least in part, as many capacity-building projects as possible.

 

As the Fund committee plans for the next iteration, what criteria should be added to clarify the reasons for not funding a proposal?

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