A Read We Keep Coming Back To

Every so often, an article stays with our team long after we close the tab. Jan Masaoka's recent opinion piece in Proximate, "Is the Era of Foundation Dominance Coming to a Close?", is one of them.

We don't agree with all of it. But it raises a question every development team should be asking: where does philanthropic money actually live today, and are we looking for it in the right places?

What the Article Argues

Masaoka argues that wealth is moving away from traditional staffed foundations and into donor-advised funds (DAFs), family offices, LLCs, and other vehicles that are much harder for the public to see.

The numbers support the trend. In 2024, DAFs granted about $65 billion to nonprofits and held about $326 billion in assets, according to the DAF Research Collaborative. Assets have roughly doubled since 2020.

She also points out that foundations have always been a smaller share of nonprofit revenue than most people assume. National Council of Nonprofits data puts foundation giving at roughly 3 percent of sector revenue, compared with about 32 percent from government grants and contracts.

Her conclusion is that the field's attention, including much of the advice nonprofits get from consultants, hasn't caught up to where the money has gone.

Where We Agree

One point in the piece is aimed squarely at firms like ours. Masaoka notes that consultants often advise nonprofits on raising money from DAFs as if a DAF were an institution with its own priorities. She's right. A DAF is an account, and behind every DAF gift is a person or family who decided your work was worth supporting.

That means DAF fundraising is really individual donor fundraising. The question isn't how to win a grant from a sponsoring fund. It's who already cares about your organization and cause, and how well you know them.

We also agree that foundations are one part of a healthy revenue mix, not the whole thing. An organization that depends almost entirely on foundation grants is carrying more risk than it may realize.

Where We See It Differently

The article describes Silicon Valley nonprofits giving up on the traditional giving ladder to focus almost entirely on very large donors. We understand the pressure behind that choice, but we'd urge caution, especially for organizations here in Southeastern Wisconsin.

Your mid-level and longtime donors are not a distraction from major gifts. They are where many major gifts come from. Some already give through DAFs. Others will become board members, advocates, or the people who introduce you to someone new. A strategy built around a handful of very large donors can be just as fragile as one built around a handful of foundations.

We'd also push back on the idea that foundations deserve less attention. Nationally, the money may be shifting. Locally, community and family foundations remain some of the most engaged partners our clients have, with program officers who know the neighborhoods and issues firsthand. The answer isn't to step back from those relationships. It's to stop treating them as the only ones.

What This Means for Your Organization

None of this requires a new department. A few practical steps go a long way:

• Make DAF giving easy. Add a line to your giving page, appeal letters, and reply cards saying you accept gifts from donor-advised funds, along with your legal name and EIN.

• Ask donors how they prefer to give. A simple question during a thank-you call or donor visit can surface DAF holders you didn't know you had.

• Record the person, not just the fund. DAF checks often arrive under a sponsor's name, like a national giving fund or a community foundation. Capture the recommending donor whenever you can so the gift is stewarded as a relationship.

• Map your relationships before buying more research tools. Ask who already knows your organization, your board, and your event guests. Much of today's giving is easier to find through people than through databases.

• Look at your full revenue mix. Review what comes from foundations, individuals, corporations, government, and earned revenue. Wherever you see room to grow, lead with stewardship. Thanking, updating, and staying in touch with the supporters you already have builds the relationships that lead to your next gift.

  
  

The Bigger Picture

Grants will continue to be an important part of how nonprofits are funded. They work best as one tool inside a fundraising program built on relationships, not as the program itself.

The landscape is changing in ways that are harder to see. That makes the people who already believe in your work even more important to know well.

If you'd like a second set of eyes on your revenue mix or donor strategy, at Momentum, we'd be glad to talk.