The Rant—and the Reality—around Unrestricted Funding
It’s tempting to rant about the need for foundations to finally—finally!—prioritize significant general operating support. Alas, many have ranted, and progress limps along. Foundations did seem open to fewer limitations on their grants during the depths of COVID-19, but those ripples have not materialized into a permanent sea change. For now, we must work within the current paradigm, which imposes needless scarcity around unrestricted grants (there, a mini rant of my own).
If you want to add to your quiver of tactics in securing these prized awards, read on. And if you’re interested in joining a movement to push for more unrestricted grants, read to the end. All the actions needed to move this issue forward revolve around one principal: trust.
Relational Trust is a Must
The best way to build trust lies in deepening relationships. It’s why you often see the largest unrestricted prizes follow project-based grants, because one successful partnership engenders multiple successive awards. In one recent example, a client’s successful program prompted its funder to make subsequent program and general operating grants over the next three years. This dynamic illustrates why it’s good to focus your rapport-building among select, key funders. Some relationships simply pay off more than others.
Even before you have the chance to develop a personal relationship, you can build trust through the actions you take. Are your emails succinct? Do you fulfill the promises you make? Do you showcase your personality alongside your professionalism? I recently witnessed a program officer reply to a grant seeker’s email, not just because of the message’s content, but because it was funny!
The Investor’s Mindset
Foundation stakeholders view general operations as riskier than more restricted awards, since the former’s effectiveness is harder to measure. Your program officer will undertake due diligence similar to that of a prospective investor when scoping out a publicly traded company:
Fundamentals. What is an unrestricted grant if not an investment in your agency’s fundamentals? In the for-profit sector, the focus lies squarely on financial performance. Nonprofit financial stability is more elusive but something you can highlight in ways that resonate with your supporters. Outcomes, plans, and quality controls also give investors confidence.
Future state. Someday, artificial intelligence might predict a nonprofit’s future health. For now, program officers search for clues such as a nonprofit’s reputation, its momentum, and its success in meeting goals. Some of these are subjective measures, and you can’t tackle them alone. They are one reason why you, the major grants lead, must understand and engage in your nonprofit’s organizational development.
Leadership. Why trumpet your CEO’s alma mater, a factoid that might be 30 years old, when you can instead demonstrate how your executive is leading your nonprofit to that desired future state? It heartens program officers when they see examples of how your executive team undertakes issues of diversity, inclusiveness, adaptability, and community engagement.
Competitive edge. As foundations often fund within narrow discipline areas, they inevitably compare your organization’s work to that of similar groups. The more you understand what those peers are doing, the more you can carve out your niche. That’s not to suggest that you capitalize on their flaws but simply highlight the human, financial, and performance-based assets that set your nonprofit apart. What your organization may be lacking, partners can backfill.
Communicating Confidence
You can bolster all the above with communications that engender trust. Most of what follows falls outside a grant seeker’s job description, so it’s imperative to engage internal allies:
Compelling Stories. Give potential funders reasons to invest in your whole organization, whether through a grant application or a press release. Philanthropies conduct extensive due diligence, so you’ll want to work with your colleagues to craft stories that are laden with all of the fundamentals above, punctuated by how your work impacts individual community members.
Online Presence. More than a few executives have admitted to me, “We are the best-kept secret.” Unfortunately, their most promising potential investors were not in on the secret. As those nonprofits strengthened their public storytelling, they increased their major grants proportionally. Funders are likely to examine your website, your social channels, and Guidestar. Especially when your nonprofit is new to a funder, these platforms can create an overarching narrative that spans media types.
Transparency. Foundations dig into details like no other nonprofit investor. So, you may as well make it easy for them to learn about your vision, mission, and objectives (not to mention tax filings). Make your strategy public, too. The less you make potential supporters work to find your fundamentals, the more you radiate openness and honesty.
Your Voice Matters
There is power in letting your largest grant makers know how much general operating support means to your organization’s future. So please, communicate to your funders just how much unrestricted support means to your organization’s stability and potential. Do it repeatedly, and begin this year.
Consider this: An investor approaches a stock trader with this request: “I’d like to invest $50,000 in Apple, but I’m not fond of the MacBook, so please put my funds only into the phones and tablets.”
Ridiculous, right?
Routine stock market investors trust Apple’s leadership to steward their funds well, or they take their money elsewhere. Yet, foundations can influence nonprofit strategy via restricted funding channels. If philanthropies are truly interested in our sector’s well-being, they need to hear from all of us how important it is that we lead flexibly in an uncertain world.
The foundations you’re most likely to sway? Those that already trust you.