When funders give general operating support, they help sustain a nonprofit’s mission rather than specific projects. Nonprofits can use these funds to improve their organization in any way they choose, such as adjusting salaries, investing in technology, or improving fundraising efforts. Foundations with few or no staff are especially good at offering this support because they often know the communities well and have strong relationships with nonprofit leaders.

General operating grants are valuable because they:

  • Allow nonprofits to focus on their main mission and build infrastructure instead of taking on extra projects and fundraising.
  • Show confidence in nonprofit leaders, reducing burnout.
  • Reduce the power imbalance between funders and nonprofits, shifting the focus to the grant’s outcomes and the organization’s overall impact.

You can track progress with general operating grants, but don’t overburden your grantees. Keep reporting requirements in line with the grant’s size, and consider having mid-grant conversations instead of written reports, or accept reports prepared for other funders.

Measuring Outcomes

Some funders shy away from general operating support because they are concerned with precisely how to know if the grant is making a difference. Although general operating support requires a high level of trust, a foundation can use a variety of questions and techniques to measure success. Sister David Ann Niski, executive director of the Bernardine Franciscan Sisters Foundation in Virginia, asks basic questions about impact of the foundation’s general operating grants, such as:

Is the organization still running, financially sound, and operating high-quality programs that benefit our community?

Kathleen Odne, a board member of the Dean & Margaret Lesher Foundation in California, suggests these broader questions to consider regarding the impact of the foundation’s general operating grants:

  • Are we multiplying resources? Does the grant and its reputational capital encourage investments by others? General operating support can help organizations chase other (easier-to-come-by) funding for programs.
  • Are we building capacity (e.g., infrastructure, staffing)? Can we use our intellectual capital to inform the capacity-building?

As you track the progress of your general operating grants, be mindful of not overburdening grantees.

Read the full article about general operating support at Exponent Philanthropy.