When exclusively funding programs, funders pretend there is some invisible unicorn funder with less restrictive grant parameters that will follow in their wake and pay for living wages, employee benefits, and professional development. In reality, there is no mysterious “other funder” to fill the gap. In a just and effective system, every funder would, at minimum, contribute flexible funding and, at best, intentionally deploy resources to build strong organizations, rather than just selectively buying a piece of one specific program.

The bottom line is that we need to break the nonprofit starvation cycle. More than that, we need to replace it with what I’ll call a nonprofit nutrition cycle. The nutrition cycle would ensure investment in not just the strategic and financial health of grantee organizations, but also partner with those organizations to advance their human health: a productive workplace, competitive and equitable compensation and benefits, a nourishing organizational culture, robust support systems for employees, and a thriving staff and volunteer base.

Unrestricted support is a major ingredient needed to give rise to such transformational change, but it alone is not sufficient. I would argue that general must be blended with specific support for staffing issues. Fund the People, the organization I lead, has dubbed this support “talent-investing” — grantmaking or other resources that are intentionally deployed to bolster and develop nonprofit leaders and workers, as well as the systems within and around organizations that support the staff team.

To illustrate why this blended approach is necessary, I’ll use another liquid analogy. Imagine each grant you make is a smoothie. Smoothies blend many ingredients into one cohesive new flavor. When we make smoothies in my household, my wife, Sarah, and I always throw in a big handful of kale. Our two young kids won’t ask for leafy greens in their sweet fruity drinks. But they (and we) benefit from the infusion of valuable vitamins, minerals, antioxidants, iron, and other nutrients they deliver.

The act of blending the fruits and vegetables is what makes this formula work. Multiyear GOS is the fruit; talent-investing is the kale. Blend them together, and you’ve got the sweet and healthy grants that nonprofits want and need.

After months of responding to the COVID-19 pandemic and the economic collapse that has accompanied it, many nonprofit workplaces are riddled with burnout, under-staffing, budget cuts, and trauma. This is layered on top of struggles to create more equitable organizations in the face of an ongoing racial reckoning in the sector and in the nation. Which is layered on top of four years of public policy crises and their impact on communities preceding the pandemic. Which is layered on top of generational and demographic changes in the nonprofit workforce, marked by a slow-motion wave of executive transitions that began at least 15 years ago. Which is layered on top of the aforementioned starvation cycle that has been a constant for as long as anyone can remember.

Read the full article about funding nonprofits by Rusty Stahl at The Center for Effective Philanthropy.