Nonprofits That Double Their Foundation Funders Don't Double Their Funding. They Triple It.

Nonprofits that double their number of foundation funders don't just double their funding. They often triple it.

That is what we found after analyzing foundation grant data from 106,000 nonprofits using IRS 990 and 990-PF filings.

The obvious objection

Larger organizations naturally have both more funders and more funding. If we simply compared one-funder nonprofits to eleven-funder nonprofits, the difference could just be a size effect. So we controlled for it.

We grouped nonprofits into revenue tiers and tested whether the relationship holds among organizations of similar scale.

It does. At every revenue level, the relationship between funder count and total foundation funding is not linear. It accelerates.

Even within the same revenue tier, organizations with 11 or more foundation funders receive 5 to 22 times more foundation funding than organizations with just one.

The power law

The relationship between funder count and total foundation funding follows a power law. We fitted the model funding = alpha x funders^beta on IQR-cleaned medians at each funder count, from 1 to 92 funders.

For all organizations with at least $500K in annual revenue:

• Beta = 1.62, R-squared = 0.992
• A beta greater than 1 confirms the relationship is superlinear: each additional funder is associated with disproportionately more total funding
• Doubling your funder count is associated with roughly 3.1x more total foundation funding

The fit is remarkably tight. An R-squared of 0.992 means the power law explains over 99% of the variance in median foundation funding across funder counts.

The pattern holds within every revenue tier

We fitted the same power law within each revenue tier independently:

*R-squared omitted for tiers with fewer usable data points at high funder counts.

Beta is consistently above 1.0 across every tier. The superlinear relationship is not a size artifact. It holds for $500K nonprofits and $100M nonprofits alike.

It is not an age artifact either

Older organizations have had more time to accumulate funders. Could that explain the pattern? We tested it by fitting the power law within age cohorts:

Even the youngest cohort of nonprofits, organizations founded in the last five years, shows beta = 1.43. The relationship is superlinear across every age group.

When we controlled for both age and revenue simultaneously, beta remained above 1.0 in virtually every cell with adequate data, typically ranging from 1.2 to 1.7.

What explains this?

Cross-sectional data alone cannot prove causation. But there are several plausible mechanisms, and they likely all operate simultaneously:

• Fundraising capacity: Organizations that invest in foundation relations cultivate more funders and more funding. The skill compounds.
• Credibility signals: Each foundation funder is a signal that reduces risk for the next one. A foundation is more likely to fund an organization that three of its peers already fund.
• Co-funding network effects: Foundations operate within informal networks. Landing one funder in a cluster can open doors to others in the same network.

The honest framing is this: the pattern is consistent, it is not a size or age artifact, and it is superlinear. The mechanism is likely a combination of all three factors above, but the data cannot isolate which one dominates.

What this means for nonprofits

The practical implication is that foundation funder diversification is not just a risk management strategy. It appears to be a growth strategy. Each additional foundation relationship is associated with more than proportionally more total foundation funding.

For organizations with only one or two foundation funders, the data suggests that the highest-leverage move may not be trying to grow the size of existing grants. It may be adding new foundation funders, even small ones, to start building the compounding effect.

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Methodology: 106,133 nonprofits with at least $500K in annual revenue, matched foundation grant data, and at least one foundation funder. Revenue from most recent 990 filing. Foundation funding equals total matched grants from 990-PF filings (2023-2024). Power law fit on IQR-cleaned medians at each funder count (1-92). Under-$500K tier excluded due to data noise (grant-to-revenue ratios suggesting fiscal sponsorships or stale revenue data).

Data source: SciRise Foundation Intelligence dataset