484.85 billion dollars. That’s the amount Americans gave to charities in 2021, according to Giving USA.1 And this amount grows year by year. For comparison: In the Netherlands, the philanthropic market amounts to 5.6 billion euros.2 It is not surprising that more and more organizations are becoming interested in this market. Imagine being able to get a piece of this huge pie?! But is it really that easy for Dutch organisations?
The success of the foundation
There are already many success stories to tell. According to Candid, almost 400 Dutch organizations have successfully raised money in the US since 2017.3 The donations come from individuals, the state, companies and capital funds. And the bandwidth is also diverse: from a few hundred dollars a year to many millions. There are even several organizations that have raised more than a hundred million from the US market in the past five years, including the KNCV Tuberculosis Fund and the European Climate Foundation.
- Giving USA: The Annual Report on Philanthropy for the Year 2021 (2022). Chicago: Giving USA Foundation.
- Giving in the Netherlands 2022, Edited by Prof. Dr. René Bekkers, Drs. Barbara Gouwenberg, Dr. Stephanie Koolen-Maas and Prof. Dr. Theo Schuyt. Amsterdam University Press, Amsterdam.
- More information about funders and beneficiaries can be found at https://candid.org/. In the paid database (the foundation’s library: the funds can be systematically searched. Foundation Directory.
The biggest growth on the market can be seen in capital funds, whose share has tripled from six to nineteen percent over the past forty years. This USD 90 billion market (excluding corporate funds) is therefore the most popular among Dutch organisations. The private channel, on the other hand, fell sharply (minus twelve percent). Contributions from companies and endowments have been fairly stable.
Don’t invest time and energy in something that doesn’t work properly
Another positive trend for US equity funds is that they are making their role more supportive of beneficiaries. This trend has been going on for some time, but has accelerated during COVID-19. It is expected to continue for now. As a result, donations increase on average, application procedures are simplified and a greater proportion of donations are ‘unearmarked’.
What makes many Dutch organizations successful in the US fund market? And what causes at least as many organizations to fail hopelessly? A few tips that can make a difference:
International character: Maybe an open door, but: make sure your proposal is international. Fundraising in America for a playground in Utrecht is virtually impossible. There are many more opportunities for, for example, culture, the environment or development cooperation. But activities in the Netherlands can also be well financed. Such as funding research in the Netherlands into certain diseases, the results of which can also be used in other countries. Or Dutch museums that buy internationally recognized art or exhibit their works in other countries. So look for an ‘international hook’ in your activities.
Long-term approach: Creating a new collection channel on the other side of the sea takes time. It takes about two years to go from cold relations to significant donations. Sometimes it takes even longer! Make a five-year plan that you will invest in the first two years. In the third year you start to earn back the investment and from then on you can expect to be able to harvest. Organizations that expect immediate results are often disappointed.
Know the fund: Try to understand the motivation behind a fund so you can respond to this in your communications. Why does a fund invest in, for example, nature and the environment? The reasons in the USA are often different than in the Netherlands. Also find out, for example: Which recent developments in legislation have an impact?
People give to people: Regardless of whether you want to receive money from a foundation or from a private individual, it is ultimately about the relationship between people. So invest sincerely in the relationship with the donor. Plan a number of visits to the US to visit the financier and don’t forget to stay in touch in the meantime. Invite the donor to a project visit or send them relevant information about your work.
Focus and structure: The US market is huge, so it’s easy to get stuck in it. Don’t go after every opportunity, but choose a limited number of funds (say ten) with which you are trying to build a relationship. Better to have a limited number where you do this well than to spread your resources over too many possibilities. And plan this systematically. Plan your actions in advance and measure progress (can we see the relationship improving?).
The American way: It is crucial to absorb the American language and culture (or use a local insider) and improve your communication. With a good knowledge of customs, topics of conversation and the specific American language, you can make the difference between whether you have a chance of obtaining funding or not.
Don’t be put off: There is a lot that can scare you. The size of the market, the huge sums that other organizations raise, but also how a fund works. There are requirements that may be new or seem impossible. In our experience, there are actually no obstacles that cannot be overcome if both the foundation and the Dutch organization have the same goal. So focus first on the relationship and the goal.
Checklist: Are there opportunities for my organization?
The American dream is big. But dollar signs in the eyes can sometimes cloud the look.
- Can your organization succeed?
- Is there sufficient capacity to implement the plan?
- Is there an administration to manage (large) donations from the US?
- Is the approach distinctive enough to get a new donor on board?
Find out in advance, because nothing is worse than spending time and energy on something that doesn’t work properly.
Experience shows that there is potential for almost any organization. And with a realistic plan, that potential can actually be converted into donations.
About the authors
Hans Valk is director of HVFC USA and HVFC International and has been active in the international fund market for fifteen years. HVFC helps impact-driven organizations around the world diversify their income and increase their impact.
Emily Fokkelman is a senior consultant at HVFC USA. She is American and Dutch and has worked in Washington DC for 12 years. Before starting at HVFC USA, she worked for eight years at the World Bank.
This article was previously published in Vakblad fundraising, volume 24, number 6, which was published in December 2022.