Giving Compass' Take:

• Aviva Stampfer and Aki Shibuya bust eight philanthropy myths that stand in the way of equitable grantmaking. 

• Are these myths holding you back? Is it time to re-evaluate your giving? 

• Learn how to judge nonprofit effectiveness. 

We noticed some recurring ideas about what to expect from nonprofits, when reading a proposal, and philanthropy in general. We wanted to create a tool that would help grant committee members identify these recurring ideas (or “myths” as we call them) when they came up in conversation, and have the knowledge to do some “mythbusting.” We hope you enjoy learning about these myths, and try out some mythbusting of your own!

Myth #1: There is a perfect organization budget size for our grants

Budget size is a consideration when evaluating grant applications, but don’t let it cloud your judgement. The reality is that our grant might enable a larger organization to fund projects or capacity building initiatives that they can’t get funding for elsewhere. With our structure of breaking up a large grant into smaller multi-year gifts, larger grant amounts are easier to plan for, and give organizations room to grow strategically.

Myth #2: Giving general operating grants means we don’t know where our funds are going

The reality is that no matter the purpose of our grant, we are committed to the organization, and trusting them to know the needs of the community they serve best.

Myth #3: Overhead is supposed to be a certain percentage of an organization’s budget

There is no hard and fast accounting rule for how administrative costs are reported, so nonprofits can make somewhat subjective decisions about how to allocate costs.

Myth #4: Nonprofit employees can be paid less because they believe in the cause and aren’t doing it for the money

Nonprofit work is challenging and complex, and employees are often tasked with many different responsibilities, which can lead to burnout and a high turnover rate.

Myth #5: We aim to make risk-free grants

While some might believe that funding a more established organization is less risky, the reality is that all philanthropy includes risks.

Myth #6: There is one “right way” to fund

We don’t believe there is one right way to fund, rather there are many, and drawing on the diverse perspectives of our membership enables us to make decisions about funding priorities.

Myth #7: Our goal is to enable nonprofit organizations to be self-sustaining after our grant

Our grant can become a contributing factor to an organization’s sustainability, but sustainability in itself is dependent on multiple factors.

Myth #8: Data is an objective way of evaluating a nonprofit’s work

While data on paper appears to be a collection of numbers and figures, data is collected and interpreted by humans, who are subjective.

Read the full article about eight philanthropy myths by Aviva Stampfer and Aki Shibuya at WA Women’s Foundation.