Smarter grantmaking: flexible, reliable funding

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Let’s keep exploring the concept of the Grantmakers for Effective Organizations (GEO) Smarter Grantmaking Playbook, which puts forth five practices that funders can incorporate into our work to make the most difference to nonprofits:

  • Capacity Building

  • Collaboration

  • Flexible, Reliable Funding

  • Learning and Evaluation

  • Strengthening Relationships

In previous affiliate e-newsletters, we started by talking about Strengthening Relationships, as the foundation for all the work we do, then we examined the practices of supporting Collaboration and Capacity Building.

Now let’s talk about Flexible, Reliable Funding. First, what does that mean?

Well, it can mean a lot of things, including general operating funds (instead of exclusively support for individual projects), making multi-year grant commitments so nonprofits can plan, or simply acknowledging that supporting salaries and “overhead” costs is a critical part of helping nonprofits accomplish goals for our communities.

GEO says “When we give flexible, long-term funding, nonprofits worry less about their own survival and focus more on responding to shifts in their environment and creating real results for the communities they serve.”

Of course, with our limited grantmaking budgets, many of us can’t afford to give multi-year general operating grants to all, or maybe any, of our grantees. In fact, even the Quad Cities Community Foundation does not offer such grants out of our unrestricted funds—the proportion of funds we have to the need for such grants in the Quad Cities is too great. (We do make multi-year general operating grants out of another program, using some field of interest funds.) 

However, there are other things we can do. We can allow salary cost or a percentage for “overhead” in our grant opportunities—or simply fund based on an organization’s mission rather than a specific project.

One option for promoting flexible, reliable funding is a fairly unique offering from community foundations like all of us—and that’s encouraging and helping nonprofits to build endowments.

Because what is an endowment but a source of flexible (usually unrestricted) and reliable (permanent!) funding? Through offering endowment-building challenge grants, or simply making nonprofits in your area aware that endowment building through the Community Foundation is possible, you can be part of making sure that flexible, reliable funding is available for important missions in your community for years to come.

One tool that can help you help them is the Nonprofit Endowment Building Toolkit, which you can download from the Affiliate Portal under “Donor Development Resources.” This toolkit is available only to nonprofit endowment fund holders and our Affiliate Advisory Board Members.

Have questions about how to incorporate Smarter Grantmaking practices at the right scale for your affiliate? Reach out to Kelly Thompson, vice president of grantmaking and community initiatives, to see what could work for you.

Melanie Jones