Giving Compass' Take:

• More grant funding is necessary for direct service organizations engaging with patients who suffer from substance abuse problems, particularly surrounding the opioid crisis. 

• Kathleen Kelly Janus found that for organizations to be sustainable, they must have an annual budget of at least $2 million. Many direct service substance abuse organizations in Indiana are not close to receiving that type of funding. If foundations are serious about helping fight the opioid epidemic, how will they start to prioritize funding for this issue? 

• Read the Grantmakers in Aging report on the role of philanthropy in fighting the opioid crisis. 

Substance abuse nonprofits in Indiana are concerned. As in other parts of the United States, opioid use in the state has reached epidemic levels. With a 500 percent increase in opioid-related deaths from 1999 to 2015, these organizations are facing increasing demand for their prevention and treatment services. How will they meet this demand?

Substance abuse organizations in Indiana had a median annual budget of $251,812.50 between 2012 and 2015. The organizations typically allocate these funds to salaries (frequently one executive, plus direct service providers), direct program delivery (such as additional non-employee service providers and supplies), and informing people in need about available services.

Given the limited supply of funders supporting substance abuse organizations, and a lack of infrastructure and personnel required to strategically and effectively pursue grants, most organizations of this size struggle to raise sufficient funds annually. But they also have difficulty leveraging one-time gifts and are frequently overly reliant on a single funding source that could disappear if funder priorities change.

In doing research for her book Social Startup Success, Kathleen Kelly Janus found that organizations that reach a consistent annual budget of at least $2 million are usually sustainable. For 65 percent of the organizations she studied that reached $2 million, a large foundation grant played a central role in its ability to scale.

Funders who truly care about sustaining critical direct services for those in need—and in particular nonprofits tackling substance abuse issues—must evaluate whether their grantmaking approach, as well as their current size and use restrictions, are best serving the needs of their grantees and their grantees’ constituents. Shifting some or all of their portfolios to larger, multi-year, unrestricted grants is simply the best way to help build organizations that sustainably serve community needs.

Read the full article about funding for the opioid crisis by Dahna Goldstein at Stanford Social Innovation Review