Many nonprofit leaders point to the importance of consistent, long-term, and flexible funding for their ability to do effective work, while also frequently describing challenges that result from short and restricted grants, inconsistent funding, and overhead/administrative cost limits. Modifying grantmaking characteristics so that they are more reflective of grantees’ needs — and the outcomes funders desire — is the fourth most common suggestion we saw in our survey of nonprofit leaders, cited by 14 percent of respondents.

Nonprofit leaders describe the difficulty of running effective programs and building strong organizations without consistent, multiyear funding. As one notes, “We are the ones doing the work and making the changes [funders] hope to achieve, but we need to have funding that is consistent from year to year so that we can do the work most effectively.” Other comments echo this and point to the importance of stable funding for building strong organizational capacity. Others point out a disconnect between expectations of stellar outcomes within a timeframe much shorter than is required to actually make change; as one says, “The funding needs to last long enough to get measurable results. Too often, the expectations are that we can do magic in very short periods of time.”

Nonprofit leaders also raise the importance of flexible funding. These suggestions align with those we see commonly in responses to the Grantee Perception Report (GPR). Further, in CEP’s recent Strengthening Grantees report, we found that nonprofit CEOs see general operating support grants as having the greatest impact on strengthening their organizations.

To staff at foundations, here are some discussion questions to consider as you reflect on your grantmaking characteristics:

  • How does your foundation decide what type of grant characteristics to provide, relative to your goals, strategy, and context? How do grantee voices feed into this decision-making?
  • In what ways might longer, larger, more flexible, and/or more consistent grant support help your grantees — and your foundation — achieve shared goals
  • In what situations might it make sense to consider providing longer, larger, more flexible, and/or more consistent grant support to your most aligned grantees?

Read the full article about flexible funding by Naomi Orensten at The Center for Effective Philanthropy.