Thank you, funders. During the worst of the pandemic in 2020-2021, you pumped out an extra $29.3 billion to support the work of charitable nonprofits. To get money out quickly, many of you tried new processes that proved so successful you continue using them today, according to the Center for Effective Philanthropy’s latest report, State of Nonprofits in 2023: What Funders Need to Know. That report also identifies staffing issues as being “the top challenge facing nonprofit leaders.”

The following article celebrates funders using simplified approaches, explains how the severe shortage of nonprofit employees threatens the public’s wellbeing, and calls attention to a barrage of external forces pounding away at nonprofits, rapidly eroding their financial condition.

Heroes and Angels

Those of you who gave general operating support during the COVID-19 emergency gained hero status among nonprofits. By trusting nonprofit leaders who are closest to the problems, you gave them the freedom to focus on solutions that could drive the greatest impact. Based on my firsthand experiences, general operating support completely transforms the funder-grantee relationship. When funders respect nonprofits and trust we know what we’re doing, it’s no longer a transactional obligation to comply with someone else’s rigid checklist, but a feeling of freedom to do our absolute best in delivering the most meaningful impact.

Meanwhile, some of you earned angel wings by jettisoning traditional resource-depleting grant applications and reporting regimes and replacing them with streamlined applications, multiyear funding commitments, and simplified reporting mechanisms. CEP’s research shows that many of you have retained these improved practices: “In the past year, more than half of the nonprofit leaders surveyed experienced easier application processes and reduced reporting requirements from at least some of their foundation funders” (emphasis added).

Curious what that looks like? Here are concrete examples of reduced requirements from two of our funders this year, each involving large multiyear grants:

  • Applications: “Feel free to use a general support proposal you’ve sent to another funder in the last 3-4 months.”
  • Reporting: “I am more than happy to schedule a 45-minute conversation in lieu of completing this written report. Also, happy to have you all submit a report you’ve used for another funder that is supporting general operating for NCN.”

Read the full article about gratitude and warning from nonprofits by Tim Delaney at The Center for Effective Philanthropy.