Momentum Around Operating Support?
Two new and instructive research reports introduce new data into the ongoing debate over unrestricted-operating versus project-based funding. While the findings may seem self-evident to some, these reports provide many intriguing nuggets and will hopefully serve to generate deeper discussions within the field, especially at the board level.
General Operating Support: Research on Grantmaker Policies and Practices, by The University of San Francisco’s Institute for Nonprofit Management, incorporates findings from a survey of California foundations, as well as focus groups and interviews with foundation staff and trustees. I’m particularly encouraged by this observation:
There was stated feeling that general operating grants made the relationship between the foundation and nonprofit more “honest”, and created dialogue between foundation staff and trustees about the long term strategic focus of the foundation.
The Center for Effective Philanthropy’s In Search of Impact: Practices and Perceptions in Foundations’ Provision of Program and Operating Grants to Nonprofits,
finds less backing for operating support than the USF study, which might reflect the national scope of CEP's study. Not so encouraging signs from this report:
Most of the grants made by even the large foundation whose grantmaking is analyzed in our study are program restricted, small, and short-term.
CEOs see operating support as more likely to make a positive impact on grantee organizations, but most place other priorities higher in their decision-making. Just 16 percent of CEOs we surveyed indicate that they favor providing operating support, and a third have no preference. Nearly half prefer to provide program support to grantees – often because they feel it is easier to connect their grants to specific outcomes.
I wonder though how much of that concern with specific outcomes has more to do with ego than impact. There’s also the issue of whether what is measured is what is actually meaningful.
Speaking of impact, the report recommends that:
Those foundations seeking to maximize their impact on grantee organizations should make larger, longer term operating grants – and do so while exemplifying three additional characteristics that grantees most value in their foundation funders.” (quality relationships, clear communication, and an understanding of the field combined with the ability to advance knowledge and affect public policy).
Again, such a recommendation may seem self-evident to some, but clearly not to all, not by a long-shot.