Giving Compass’ Take:
• Vu Le explains how restricted funding makes it difficult or impossible for nonprofits to do the work they set out to complete.
• Do you restrict your funding? What has the cost of these restrictions been?
• Learn about the value of unrestricted funding for impact philanthropy.
For the past few months, one of the staff has had an eye that’s been twitching. “It’s this grant!” she says, “it’s for our after-school program. It pays for instructors’ teaching time, but not their planning time! How can they teach when they can’t plan?! How? How?!”
“Psst,” I whispered, “let’s talk in the conference room. Since they are dedicated they will plan anyway even without getting paid,”—I paused, looking around—“why don’t you just increase their hourly wages?”
“This grant capped the hourly wage, so I can’t pay them more. The other grant might pay for planning time, but they don’t pay for employer taxes! ”
The sad reality is that we nonprofits spend way too much time navigating the complex maze of funding restrictions, time that could be better spent delivering and improving on services. We should all focus on the final outcomes and allow nonprofits the flexibility to do their jobs. Though restricting funding in the name of accountability has been a standard practice that stemmed from good intentions, in the end, it is the gluten-free veterans who will be eating fruit again.
Read the full article about restricted funding by Vu Le at Social Venture Partners.
Impact Philanthropy is a complex topic, and others found these selections from the Impact Giving archive from Giving Compass to be good resources.
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