The case is closed: General operating support is both good for grantees and communities and favored by funders. In addition, a study recently conducted by the Center for Effective Philanthropy (CEP), New Attitudes, Old Practices: The Provision of Multi-Year General Operating Support, was “unable to identify significant barriers foundation leaders experience in providing or increasing their provision of multiyear GOS.”
So why the troubling gap in implementation?
PEAK Grantmaking, a community of over 5,000 grants professionals working at all sizes and types of foundations, has long been the home for those concerned about improving the policy and practices governing grantmaking. It’s those details – big and small – that have, over many years, become ensconced into grantmaking “tradition.”
Consider how money is typically pushed out the door, from the perspective of a grantseeker: First, the application, where you must be as precise as possible about what our dollars will fund by responding to 20 very specific questions in less than 1,500 characters. Next, we disappear into a “black box” and decide if your cause and capacity make you worthy. Then, we write up MOUs, contracts, and agreements that restrict how you can spend your dollars, and make you sign them. Only then will we give you the money – but it’s not over yet. In order to get us to release additional payments or consider you for future funding, you must provide, in minute detail, an account of how you’re spending the money and the outcomes you’re seeing – and on our schedule, which may be quarterly or even monthly, if we so demand!
Sound like an effective way to support a partner?
So if leaders at funding institutions say they are okay with operating grants, grants management professionals are pushing for more equitable and effective practices, and CEP was unable to identify any concrete barriers to implementation in their recent study, we have a question: What’s up?
Centering Values and Questioning Power
In our years of working with grants management professionals, we have amassed much real-world intelligence on barriers to practice change. Our members identify things like organizational culture, fear of change and resistance to process changes, bias (both implicit and explicit), and over-reliance on a (paternalistic) compliance mindset.
In addition, we also know that the expanding role of technology and online applications have increased the amount of customized information that grantmakers can track, which has led to a build-up of intensive data collection processes at the application and reporting levels for project-related funding.
We also know that the way grantmakers conceive of risk means that concern for their own potential “loss” outweighs their assessment of potential hardship for applicants (and those they serve) should funding fail to come through.
These “unstated” or implicit values show up as practices, living inside application questions, due diligence checklists, grant budgets, grant agreements, grant modification procedures, and grant reporting requirements. In their current and most typical state, these practices tell grantees and communities that philanthropy does not trust them.
As a result of this dynamic, the work of building strong and trusting relationships between grantmakers and grantees has essentially been assigned to nonprofits: It’s nonprofits that are hiring development staff to build relationships with funders, not vice versa! We’ve built an entire profession dedicated to building trust and seeking grants, and placed the burden of paying for it on nonprofits.
Funders can do the work to tie their practices more closely to their values, but the work of organizational culture has not taken center stage for many funders. But what better time than now – In the midst of mass uncertainty and upheaval – to work on strengthening people, relationships, and communities?
A Way Forward
In a number of recent studies (from us at PEAK, by Exponent Philanthropy, by CEP, and by the Council on Foundations and Philanthropy California), funders have reported streamlining their processes, loosening restrictions, and providing more flexible funding due to the pandemic, economic downturn, and racial justice protests.
However, we’re already hearing grumbles about “getting back to normal.” We cannot let that be the case.
It’s time to build coalitions for change within grantmaking institutions. Working together, operations staff, grants management staff, IT staff, program staff, executives, and boards need to open real conversations around the ways that their values are showing up (or not) in their practices: how they can narrow the power gap, drive equity, be more responsive, and embrace a true culture of learning and continuous improvement.
In New Attitudes, Old Practices, CEP found that “the subset of foundation leaders who provide more multiyear GOS have made an intentional choice borne of their belief that it will build trust, strengthen relationships, and increase impact.” In becoming more intentional, the strategic importance of the process and practice of grantmaking can’t be understated. Clarity of intention from the top is the only thing that can help overcome the fears of change and loss that keep us locked in the status quo.
To those board members and executives in philanthropy ready to lean into your values, especially around general operating support: Check in with your grants management and operations staff. They’ve been moving mountains over the last seven months to get money out the door. They can help you build the permanent practice changes that will clearly demonstrate your values. Find their work in the Principles for Peak Grantmaking: Tie Practices to Values, Narrow the Power Gap, and Drive Equity.
Originally published on Center for Effective Philanthropy blog.