Are there simple, creative solutions grantmakers can and should incorporate to strengthen nonprofits?

In a word…yes.

I see this sentiment gaining traction within the philanthropic arena. In Phil Buchanan’s latest book, Giving Done Right: Effective Philanthropy and Making Every Dollar Count, Buchanan interviewed nonprofit leaders from across the country. What those interviews revealed should come as no surprise …drum roll, please…

One of the greatest challenges nonprofits face is recruiting and retaining quality staff.

Through his conversations, Buchanan found many nonprofit leaders not only have vision and passion for their work, but also employ tremendous management skills. In his April 2, 2019 Opinion piece for the Chronicle of Philanthropy Buchanan states, “To spend time with these leaders is to recognize the utter fallacy of the caricatures of nonprofits that they are undisciplined, that their leaders couldn’t make it in business, or that the work is somehow easier than in for-profit organizations.” “Wrong, wrong, and wrong again.”

Over my 20 years in the funding world I am slowly but surely seeing change in the tried and true funding methods of requests in the door and dollars out. I am seeing funders who are actively involved in setting strategy for their work, finding ways to partner with nonprofits, and finding ways to partner with each other.

My theory is that In order to effect change the entire philanthropic community must work together and this work starts with inviting nonprofit partners to the table and giving them an equal voice. I also believe it is time for funders to open their eyes to the true cost of providing services including that dreaded word…overhead. In return, agencies must take the time to understand all that it takes cost wise to run their agencies and be up front with funders, without fear of push back .

Buchanan offers three simple solutions funders can employ:

1. Have conversations with nonprofits regarding employee salaries and benefits. Are agencies aware of benchmarks? Do they know the dollar figures it will take to reach and maintain those levels? Are they aware of the true costs of operating the nonprofit? Are they willing to share those figures? Are funders willing to listen? Are funders wiling to support staffing and operational costs?

2. Give general operating grants to organizations with budgets under $3 million. How about making it foundation policy that for every project grant awarded, the agency will receive the same amount for general operating support?

3. What about foundations flipping the model so that multi-year support is the default with one-year grants requiring special justification?

What do you think? Do you agree? Do you disagree? As a nonprofit, are you experiencing any changes in the traditional funding model? As a funder, are you having these discussions within your board and staff?

Let’s start the conversation….