How do Foundations Help Charities (Beyond Giving them Money)?

Foundations are a rapidly growing source of charitable support, yet their effects on nonprofits remain poorly understood. We study applicants to a $100 million funding competition whose sponsoring foundation subsequently offered publicity, networking, and advice to a subset of unsuccessful entrants. This support substantially improved later fundraising for smaller charities. Our estimates indicate that the foundation’s support generated over $40 million in income in the years following the competition. These findings offer novel evidence of how large donors can influence nonprofit success even without awarding funds, and show how funding competitions might be structured to help charities raise additional resources.