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Multi-year Grants
Affirmation: Multi-year funds provided both reliability and breathing room for nonprofits.
Making fundamental and long-lasting change comes with the promise of reliable investments. Longer grant terms create an environment where collaborative partnerships can flourish, and trust and transparency break down power dynamics. The result is that nonprofits have the “breathing room” and financial stability to focus activities where they are most needed.
Although many funders award grants to the same nonprofits year after year, they often require submission of annual applications that request information they already have and are complex and needlessly lengthy. These processes can heighten mutual distrust. From a practical standpoint, multi-year awards reduce paperwork for both funder and nonprofit and open communication channels promoting shared goals, mutual trust, and increased overall impact.
Activities
• For funders that historically award repeat annual grants to the same nonprofit partners, shift from an annual grant/proposal cycle to a long-term, multi-year commitment with an annual outcomes/progress report in lieu of a full application.
• Tailor grant terms to suit grantee timelines and needs (negotiated outcomes and milestones).
• If data collection is required solely to meet a funder’s compliance requirements, the funder should assume this responsibility or provide sufficient funding and/or capacity for the nonprofit to meet the requirement.
Short-term Outcomes
• The number of funders making multi-year grants increases by 50% over the previous years.
Long-term Outcomes
• More funders convert an annual application process for repeat grantee partners to a multi-year commitment with an annual outcomes report at the most, instead of full proposals each year.
• Funders assume responsibility for data collection or provide sufficient funding and/or capacity for the nonprofit to meet the requirement.
• Grant terms are suited to grantee timelines and needs (negotiated outcomes and milestones).
How to Begin Doing Good Better on Reliability
Learning opportunities
• What barriers keep funders from making long-term commitments to repeat grantee partners? Are any of these barriers legal?
• What are the minimum data requirements for funders to collect from repeat grantee partners?
Pre-Work
• Address the barriers to awarding multi-year grants through tested tools.
• Learn about how multi-year grants strengthen grantee partners and improve philanthropic, nonprofit, and community impact.
• Research mechanisms funders can use to meet legal compliance requirements while gaining trust in their grantee partners.
Deepening Philanthropic and Nonprofit Partnerships in New Jersey
Doing Good Better, a partnership of the Council for New Jersey Grantmakers and the New Jersey Center for Nonprofits, is a community of funders and nonprofits taking action against the power imbalances and racial inequities in philanthropy, nonprofits and government. Accessible, equitable, and mutually accountable relationships are primary and indisputable building blocks for a stronger society and thriving communities. Our goal is to shift the culture of the New Jersey philanthropic and nonprofit ecosystem by encouraging funders, nonprofits, and government to create shared power rooted in collaboration, mutual trust, and respect.
Doing Good Better Goals: A Framework for Change
The Doing Good Better Steering Committee encourages funders to focus on and advocate for four changes that can make an immediate difference in addressing power dynamics between nonprofits and funders and maximizing nonprofit impact.
Why now?
For many years, but particularly in the context of the COVID-19 pandemic, natural disasters, and the heightened outcry for racial equity and social justice, funders have been urged to embrace more flexibility and transparency in their grantmaking. Practices such as general operating support, simplified application and reporting procedures, multi-year funding and others have been shown to level the power imbalance, advance greater equity, strengthen partnerships between funders and their nonprofit partners, and thereby improve community impact.
Many grantmakers temporarily embraced flexible practices in the wake of Superstorm Sandy and during the height of the pandemic, and these structural changes empowered nonprofits to become more resilient and have a greater impact in their communities. But while some funders have retained the flexible practices, others have reinstated previous restrictions.
In New Jersey and across the country, there is a renewed urgency to NOT return to business as usual. It’s long past time.
Doing Good Better invites all of us to reflect on how power is distributed in our partnerships, learn from our peers, and make adjustments that position all community partners for transformative, equitable change in New Jersey.
How?
Guided and informed by 50+ advisors from New Jersey who represent a broad range of perspectives from nonprofits, philanthropy, and beyond, we are approaching this work through the lens of systems change – the recognition that transformative change can only occur after power structures have been addressed collectively. Specifically, Doing Good Better encourages funders to consider the power dynamics that underpin their policies, practices, and resource flows. To do this, we provide resources and a space for dialogue centered on changes in key practices and culture shifts.
Quick practice changes you can make now.
The road to systems change begins with changing practices that impede nonprofits’ pursuit of their missions, and implement practices that demonstrate respect for and trust in the expertise and experience of nonprofits and the communities they serve. Several key practices have consistently been shown to be particularly effective. Many of these have been requested by nonprofits for quite some time, and are reflected in the principles of Trust-Based Philanthropy and Community-Centric Fundraising, among others. Here are a few practice changes you can make now:
Type of Funding
● Give multiyear and unrestricted funding, especially for grantee partners with which you’ve had long term relationships.
Access to Funding
● Create alternative processes for organizations too small to submit audits to reduce barriers to obtaining grants.
● Set aside funding pools for BIPOC-led organizations that may not have access to traditional funding sources.
Simplifying the Process
● Simplify and streamline application and reporting processes.
● Eliminate annual requests for organizational information that does not change from year to year.
Learning
● Engage with the community through participatory grantmaking that aligns with the community’s goals.
● Open dialogues with nonprofits by soliciting and acting on feedback
How do we know?
We’ve asked the experts: nonprofits, foundations, and community members who are working directly in our community as well as peers from across the country who are eliminating power imbalances in their own communities.
● Feedback from over 50+ Advisors
● The Council of New Jersey Grantmakers survey
● The Center for New Jersey Nonprofit’s survey
● The Trust Based Philanthropy Project
● The Community-Centric Fundraising movement
● Thought leaders and advocates throughout the nonprofit community
● Case studies from across the US
A sample conflict of interest form for independent private foundations.
There is a plurality of definitions of the term systems change, each contextualized within different cultures and purposes. Doing Good Better embraces systems change as an inter-sector process that addresses complex social problems nonprofits and funders confront with collective action centered on equity, mutual respect, and resilience. Systems change refers to changing the parts and their relationships within a system with the understanding that this change will have ripple effects. As grantmakers, we need to create an environment that enables grantee effectiveness, so they can deliver on their mission. Systems change in philanthropy focuses on structures, policies and processes, resources, values, power, mindsets and, infrastructure that is illustrated in three iterative phases. In time, we hope that the application of this model will result in collective impact and a more resilient social sector for all of New Jersey.
The first phase is structural (operational) change, which involves funders adopting new policies, practices, and resource flows. The second phase is characterized by new relationships and connections that emerge from structural change eschewing old power dynamic practices. Finally, the third phase is transformative change, which occurs when change becomes rooted in organizational culture and mores. We cannot underestimate the length of time and learning at each stage. Achieving transformative change can be a long journey, but it is a learning journey. One grantmaker stated, “One change led to another and another, like dominos. I started to see what people meant by systemic change. New energy and excitement surged among us as hope grew and the cloudy vision of what we wanted became clearer and clearer.”
Although the figure below displays the six developmental stages as linear and distinct, change is unlikely to follow a linear path. Any change in a system will seldom stay fixed at one of these stages but rather will shift back and forth from one stage to another on the path toward the ideal state. We believe just one organization can’t shift the conditions that hold problems in place; we all must share the same perspectives and move the sector together and simultaneously. We call for all of those involved in the sector to work together to build a better and more equitable nonprofit and philanthropy system for all New Jerseyans.
Graphic comes from “The Water of Systems Change” by John Kania, Mark Kramer, and Peter Senge.
Doing Good Better, a partnership of the Council of New Jersey Grantmakers and the New Jersey Center for Nonprofits, is a community of funders and nonprofits taking action against the power imbalances and racial inequities in philanthropy, nonprofits, and government.
Right Size Applications; Simplify Reporting
Affirmation: Paperwork hinders us all.
Duplicative or complex proposal and reporting requirements divert time and resources for both nonprofits and philanthropy, needlessly burdens nonprofit partners and siphons scarce resources away from where they are most needed. Funders can lessen the burden on grantee partners by streamlining the application and reporting processes, especially for repeat grantee partners; decreasing the required data to only the most necessary for decision-making; taking on some of the burden of data collection by gathering data from central repositories such as Candid (formerly GuideStar) and the IRS; and retain and use data already collected from repeat grantees. Funders should require updated information such as annual budget, staffing, board member changes, etc., in their grant applications only when the nonprofit is the only source for this information. Collaborate with other local funders and agree to common GOS application questions and budget templates; streamline tools through technology and offer innovative ways for organizations to apply for and report out on grants; limit written requirements to information that is relevant to the request, and which moves the needle on critical social issues.
Activities
• Reduce rigidity and increase the flexibility of what nonprofits must submit for their applications in creative, egalitarian, and less burdensome ways.
• All funders right-size their application and report requirements relative to the grant amount.
• Shift from reports to conversations or other lower time-intensive means.
• Develop agreed-upon common questions for use across the philanthropy sector for general operating support grant applications.
• Explore the efficacy of using common applications for general operating support grants.
• Change site visits for compliance to goals of learning.
• Consider developing a central data repository for New Jersey nonprofits and funders, where applicants can submit and update basic information once a year, and funders can access the necessary information.
Outcomes
• 75% of funders begin to reduce the size of applications and reports relative to the size of the grant.
• 75% of funders shift from reports to conversations or other lower time-intensive means, like site visits geared to learning and relationship building.
• 50% of funders making general operating support grants accept creative, egalitarian, less burdensome applications including other funders proposals.
• Nonprofits have increased capacity to dedicate time to other activities and efforts.
How to Begin Doing Good Better on Reducing Burden
Learning opportunities
• For funders who do not right-size their applications, what are the barriers to reducing paperwork?
• Who is making the decisions about the application and reporting requirements, and how can they be reached to encourage change? How can we involve more board members of funders in this effort?
• For funders who require reports, determine what is “nice to have” vs. what is needed and used and consider eliminating the rest; what are expeditious ways to collect data including accepting other funders’ reports?
• Which funders who make multi-year grants require a full application for the first year and updates for subsequent years?
Pre-Work
• For funders who already report tailoring their applications, consider how to further simplify processes for grantees; share these practices with other colleagues in philanthropy.
• Learn how information is collected without burdening the applicant.
• Review and implement recommendations already provided by nonprofit networks and philanthropy-serving organizations for concrete examples such as centralized document repositories; allowing nonprofit partners to re-use other proposals and reports; holding check-in meetings in lieu of written reports; and other helpful practices.
• Seek promising practices of funders who use site visits as opportunities to build trust and understand the programs and organizations they support instead of as compliance reviews.
Notes:
See, for example, SMU DataArts (formerly the Cultural Data Project), https://culturaldata.org, a nationwide research and data repository for the arts and cultural community. DataArts serves as a collector and clearinghouse for a wide array of data, which funders can access instead of requiring nonprofits to provide it separately.
The Future of Work and the Role of Philanthropy
Dates: Wednesday, May 19 and Thursday, May 20
Time: 2:00 to 5:00 p.m.
One of the most valuable learning and networking events for the social sector in the state, CNJG’s 2021 Virtual Spring Conference considered the role of philanthropy in shaping how, where, and why we work.
The coronavirus pandemic has impacted and propelled the future of work in ways we couldn’t have imagined. But even before the pandemic - the automation of jobs, the gig economy, the ongoing need for reskilling and retraining, changing demographics, green careers, lack of job security and more – has been setting the stage for novel ways of working. The Spring Conference explored this new, accelerated work paradigm, it’s profound impact on New Jersey’s industries, workers and communities, and the implications for grantmakers and their nonprofit partners.
This timely and important event brought together national and local thought leaders, experts and stakeholders to share what the social sector can do to ensure a better future for New Jersey’s workforce. Attendees engaged in candid, visionary conversations around equitable labor standards and professional practices, the changing, post-pandemic workplace, strategies to fill gaps in skills, education, and opportunity, the effects of new federal job policies on workers, and much more.
Thank you for joining the Council of New Jersey Grantmakers for an exploration about what lies ahead as we prepare for and address pressing and unprecedented changes in the world of work.
Only people who registered for the Conference will be able to access WHOVA. For assistance or additional information, please contact Anna D’Elia, Manager of Programs and Learning.