Understanding Foundation Philanthropy to Human Service Organizations

Abstract

Human service nonprofit organizations are a vital part of the social safety net providing a diverse array of services from job training, to assistive housing, to emergency food provision (Allard, 2009). To achieve their missions and raise funds to support their work, human service nonprofits must navigate an increasingly fragmented, complex, and competitive funding environment, piecing budgets together from multiple revenue sources (Allard & Smith, 2014; Galaskiewicz & Bielefeld, 1998; Smith, 2015; Young, 2007). Grants from philanthropic foundations comprise one piece of the funding puzzle for many human service nonprofits (Marx, 1996; Young, 2007). This paper explores foundation grantmaking to human service nonprofits in Chicago, IL from 1990 to 2005. We find three classes of nonprofits: sustained players, nonprofits that are continuously funded (by different foundations); repeat players, nonprofits with greater than average duration of funding; and new entrants, nonprofits that secure foundation funding for only a few years. This pattern of funding led to an increasing concentration of foundation funds in a small, privileged group of organizations. This paper explores the factors leading to this bifurcation of the grants economy and the consequences of such patterns.