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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.
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 New Jersey Philanthropy Hub, 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.
Despite a field replete with research, analysis, recommended policies and practices — not to mention an abundance of educational programs and frameworks for grantmaking to diverse communities — philanthropic leaders have been slow to advance these values in their foundations. Philanthropy Northwest (PNW) wondered: what is getting in the way? Why are good intentions, buttressed with theory and practical advice, not achieving better results on measures of diversity, equity and inclusion?
With the support of the D5 Coalition, PNW began a year-long study to explore these questions. The study was divided into two parts. They began with personal interviews of 23 philanthropic leaders in the Pacific Northwest. In order to better understand how these organizations incorporated diversity, equity, and inclusion into their work and workplaces, they collected baseline information about their staff composition, leadership styles, and organizational practices/policies.
This report details their findings. It includes an in-depth look at the peer cohort model, in which ten foundation leaders met regularly to discuss these issues and support each other in advancing their own leadership. It also includes practical lessons about shifting organizational cultures towards greater diversity, equity and inclusion — lessons drawn directly from the experiences of peer cohort leaders.
PNW presented this work in a webinar hosted by the D5 Coalition. The webinar recording and slides are below.
The National Center for Family Philanthropy and Youth Philanthropy Connect, a program of the Frieda C. Fox Foundation, have joined together to bring new resources to the field of philanthropy focused on engaging the next generation of donors and family members. Igniting the Spark: Creating Effective Next Gen Boards is the first publication of its kind, offering a comprehensive overview of the growing practice among family foundations and donor advised fund holders of using next generation boards.
The issue brief outlines creative options for involving children as young as 8 in family philanthropy. It is supplemented by case studies of seven foundations using next gen boards and other approaches for engaging youth in philanthropy. Throughout both resources, the voices of next gen donors describe what works — and what doesn’t — providing family members and staff with guidance and insights new to the field.
Small BIPOC organizations and/or historically excluded/led
organizations have greater access to funding.
Affirmation: We must center the most marginalized, underfunded, and impactful organizations.
BIPOC, grassroots, and/or historically excluded1 leaders are the most proximate to the populations and communities that face the most pressing social issues and should be central to designing solutions and funded; yet they are often overlooked or ignored as real change-makers.
They are underinvested in by major funders and are often left to struggle on their own; and when they are funded, grants are small and often highly restricted.
Some funders have artificially high budget requirements, require collaboration with larger “more sophisticated” organizations, won’t fund fiscally sponsored groups, or emphasize leadership requirements that are increasingly out of date or exclude vital lived experience.
Community organizations are exploring innovative and egalitarian management structures, such as co-directorships, collectives, and collaboratives, that do not resemble the constructs of the past.
Leadership comes in all structures, sizes, and identities; funders must seek to recognize and fund those who are doing effective work and re-evaluate their views of accepted leadership patterns. For BIPOC, grassroots, and/or historically excluded leaders to succeed, we must provide flexible resources and professional development support while they are leading.
Activities
Below are activities your organization can engage in that will advance your equity focus
• Agree as a community of practice to a shared definition of BIPOC, grassroots, and/or historically excluded-led organizations to foster a common frame of reference to help guide this work.
• Create networking and referral opportunities for BIPOC, grassroots, and/or historically excluded leaders to expand their access to funding and opportunities similar to that of larger, mainstream groups.
• Invest in the development and pipeline of BIPOC, grassroots, and/or historically excluded leaders.
• Remove funding barriers for small BIPOC, grassroots, and/or historically excluded organizations that have traditionally been precluded from funding because of budget size, leadership structure, auditing requirements, and similar obstacles.
• Actively partner with BIPOC, grassroots, and historically excluded organizations to make funding decisions on issues closest to their communities.
• Provide significant, multi-year, general operating funding to organizations and movements led by BIPOC, grassroots, and/or historically excluded communities.
Short-term Outcomes
• Progress is tracked into addressing the barriers to funding BIPOC, grassroots, and historically excluded-led organizations in NJ.
• A greater number of BIPOC, grassroots, and/or historically excluded-led organizations are funded than before, by new and existing funders.
• Professional development and capacity building as requested by BIPOC, grassroots, and/or historically excluded leaders is funded.
Long-term Outcomes
• BIPOC, grassroots, and/or historically excluded leaders can access funding and opportunities similar to that of larger, mainstream groups.
• A greater percentage of support to organizations and movements led by BIPOC, grassroots, and historically excluded communities is provided as significant, multi-year, general operating funding. In this context, “significant” can refer to both the quantity, size or percentage of grants awarded by the funder in any given year.
How to Begin Doing Good Better on Equity
Learning opportunities
• Which criteria and practices are creating, perpetuating or exacerbating exclusion of BIPOC, grassroots, and or historically excluded-led organizations?
• For funders that exclude or limit funding to small organizations, why are these barriers in place? What biases or missed opportunities are resulting from these obstacles?
• When funders are actively prioritizing BIPOC, grassroots, and historically excluded -led organizations in their philanthropic partnerships, what definitions, outreach, and partnership strategies are being used? How has this evolved based on lessons learned?
Pre-Work
• Funders should become educated about how traditional ways of identifying grantees and other criteria often excludes BIPOC, grassroots, and/or historically excluded-led organizations.
• Actively seek and share ways to center, identify, fund, and partner with applicants or community-based partners to create solutions in all efforts.
• Identify forums or protocols for introductions, dialogue, and relationship-building between funding community and BIPOC, grassroots and/or historically excluded-led organizations to pave the way for ongoing or stronger partnerships.
General Operating Support or General Project Support
Affirmation: Funds with the least restrictions are the most valuable
Nonprofits maintain and strengthen their organizations when their funds are unrestricted. Data shows flexible and reliable funding increases impact when nonprofit leaders have control over how funds flow to meet the needs of their constituents and internal operations, as demonstrated during the pandemic when funders released previously restricted funding. General operating support (GOS) funding signals trust in our partners and can open more honest dialogue about meeting the mutual goals of the funder and nonprofit. Funders who make project or program grants should trust the organization and provide flexible funding within a specific program.
Activities
• Over the short term, funders aim to shift their GOS activity by 30%. (30% more grants shift from program to GOS, or from fully restricted to negotiated GOS.)
• Provide grants as unrestricted organizational general operating support. The long-term ideal is for most, if not all, grants to be 100% GOS, unless a funder is legally precluded from doing otherwise.
• For project/program grants, 100% of the grant awarded is unrestricted (negotiated GOS), applying mission-based and mutually negotiated outcomes.
• Nonprofits articulate their organizational vision, strategies and intended outcomes to funders; funders understand the models of their grantee partners and learn from them how the grantee partner's work will lead to change.
• Trust nonprofit partners to know how to best apply their funding.
• Create a shared understanding of the meaning and importance of full-cost budgeting and real-cost funding.
Short-term Outcomes
• 70% of funders are shifting some of their distribution to making general operating support grants.
• 100% of program/project grants are designated unrestricted.
Long-term Outcomes
• 100% of all grants are made without restrictions, unless limited by covenant or donor wishes in the case of community foundations.
• All nonprofits can clearly articulate their vision, strategies, outcomes, and business models to funders; and funders understand them and trust them to know how best to use their funds.
How to Begin Doing Good Better on Flexibility Learning Opportunities
• Why aren’t some funders planning to award GOS or negotiate GOS?
• Ask funders: If you participated in CNJG’s 2022 funder survey and indicated that you planned to initiate GOS, have you done so? • Why are some grants restricted?
• What would it take for funders to change?
Pre-Work
• Seek and share learning opportunities for funders, prioritizing education of foundation boards, to address the barriers to awarding GOS and understand how restricted funding undermines financial sustainability.
• For funders who already regularly provide GOS funding, educate/advocate for others to do the same.
• Learn how GOS/negotiated GOS strengthens grantee partners and the multiple ways they can use and evaluate GOS. Actively seek insights from nonprofits to reinforce the message about GOS in their funding partnerships.
• As an incremental step for funders that are not receptive to GOS, provide education about negotiated general programming support (flexible funding within a mutually agreed-upon program area, as opposed to organization-wide GOS).
• Share promising practices on evaluation of GOS and negotiated GO
In 2003, with member support, CNJG commissioned a report on the impact a potential conversion of Horizon Blue Cross Blue Shield to a for-profit might have on access to health care in New Jersey. Research from the Center for State Health Policy (CSHP) at Rutgers University, provided details about the law governing such conversions in New Jersey and the experience of other states with conversions. The report identified questions raised in other states when such conversions occur, especially about the valuation of assets, the impact on low-income families, and the operation of the philanthropic foundations that have been established as stewards of the assets generated by the conversions. CNJG’s purpose was to seek answers to critical questions relevant to the availability of healthcare coverage for New Jersey’s citizens and to discuss models of best practice for healthcare conversion foundations across the United States.