Our colleagues at Grantmakers for Effective Organizations (GEO) launched a new website earlier this month. To celebrate their announcement and their commitment to smart grantmaking that bolsters nonprofits’ success, we are pleased to share excerpts from a tear sheet co-created with their staff.
As funders, your success is tied to the success of organizations you support. Yet there is often a disconnect between the ways funders support nonprofits and the types of support nonprofits say contribute most to their success.
In its publication, “On the Money,” GEO describes several challenges faced by nonprofits:
- Restrictions on funding. Funders overwhelmingly prefer to support direct programs and services, resulting in underinvestment in the infrastructure nonprofits need to sustain and grow.
- Assumptions about sustainability. Some funders imagine that successful grantees will eventually reduce their reliance on grants and pay their own operating costs. For many nonprofits, this is not a possibility, and sustainability simply means having the capacity to raise adequate funds to do their work well.
- Too many masters. Diverse funding sources are considered an ideal for nonprofits, but this may be a myth. Securing multiple funding sources can make for hundreds of applications and reports, a staff- and time-intensive endeavor. Some organizations even shift from their core missions to secure funding from multiple sources.
- Onerous grantmaking practices. From grant applications that take days to complete to involved reporting requirements that differ for each donor, many funders inadvertently place enormous burdens on their grantees.
- Knowledge gaps. Perhaps the biggest money problem facing nonprofits and their funders today—and a problem that underlies all the others—is a knowledge gap on both sides about the nature of money in the nonprofit sector.
