On Trust & Risk: Providing Multi-Year Grants for Nonprofits’ General Operations
By Liana Krupp
There is a glaring silence that comes from Center for Effective Philanthropy’s recent report New Attitudes, Old Practices: The Provision of Multiyear General Operating Support: 63% of foundation CEOs interviewed for the study favored increasing multiyear general operating support (GOS) grants, but none reported any plans to change current practices. While it reveals very little as to what barriers are in the way for foundations to offer more multiyear GOS grants, at no fault of the researchers, it is easy to let these respondents off the hook. Several foundation CEOs and program officers who were interviewed shared that multiyear GOS grants simply do not fit with their foundation’s “approach” nor has that type of grant been prioritized. One may think, “well, those are the rules,” but we need to continue to interrogate why those rules and limitations exist in the first place.
The study does not fall short on proving the upsides to the approach of multiyear GOS grants: allowing nonprofits the ability to plan, focus on the work, invest in staff, and organizational stability are each mentioned several times. The study also reminds us that this type of support creates closer contact, stronger relationships, and more equitable and rewarding partnerships with grantees. Grantee success and sustainability, however you choose to measure it, is the general goal of philanthropy. So, what is holding these foundation CEOs back?
Having taken my family’s foundation from one-year, lower-dollar grant cycles with a larger number of grantees to a strategic multiyear GOS grant model focused on building internal organizational capacity for a smaller group of grantees over the past 3 years, I can speak firsthand to what is left unsaid. CEP reports 29% of foundation respondents said that the reason they don’t provide multiyear GOS grants is “a lack of trust in nonprofits and a desire to maintain control.” Along with my staff, we had to manage board member’s fears of grantees “skipping town,” push back on the perception that nonprofit leaders are compensated “too much,” as well as endure the refrain, “it’s my money, I get to decide how they spend it.” I share this not to shame my family, but to demonstrate the remarkable growth we collectively now share. Not only did we change how we gave grants, but we embarked on a journey of changing hearts and minds.
During this transformation, we unpacked what we are really talking about when we say things are too risky, whether it is a new grantee, a big idea, or the size of a grant request. Risk is inherently about trust, and trust is about power. Our staff took a deep focus to educate, to demonstrate, and to reiterate the value of trust to our board through deep and authentic relationship-building with our grantee partners. We challenged our board to show up for our partners in new ways, to leverage their own social capital to support, to defend, and to elevate each organization. Breaking down the power dynamics that often happen in the philanthropic world is at the center of our work, both between board and staff, and with grantee partners. This is the key that unlocked our collective fear of taking on risk and showing up big.
In 2018, we began our first cohort of three-year six figure GOS grants – a huge risk that would not have happened if our board did not trust my leadership and the hard work of our staff. As we move into our third year, we have seen such remarkable growth, innovation, and flexibility within this cohort. The board is seeing how deeper investments pay off. While we still argue about budget testing and overhead, we are working towards breaking away from these philanthropic myths driven by white dominant culture. This shift in how our family foundation gives did not happen overnight, and our journey is far from over. The hope here is that we are creating and nurturing a culture based on trust and commitment that will stand on beyond my tenure as President and for future generations, allowing space for dreaming big, making mistakes, honest conversations, pivoting, learning, and letting the people who do the important work we believe in do the actual work.
We believe that if the organizations we support have the strong infrastructure they need to deliver their programs, whether that is accounting software, a new website, hiring a grant writer, paying their staff living wages with benefits and 401Ks, or any of the other unsexy stuff many funders often shy away from, they will continue to thrive and exist in the world far beyond our grant cycle. With the onset of the global pandemic this year, nonprofit organizations are at a far greater risk of closing their doors than ever before. In the spring and summer, we saw many foundations tossing their own self-imposed rules out with yesterday’s mask and they expedited funds, lifted restrictions to allow money to be spent for general operating, and eliminated reporting – and sometimes applications overall! What did we learn from this? Philanthropy didn’t crumble. Endowments didn’t dry up. Grantees didn’t flee the country. As more and more foundations realize that they can do away with administratively burdensome processes and funders become less restrictive with their dollars, there is hope that a larger change in philanthropic giving is upon us. Let’s put more energy in trusting and investing in people and organizations doing important work and ask them how we, as funders and foundations, can better serve them.
Liana Krupp is a trustee and President of the Krupp Family Foundation, which focuses on building strong organizations that support equitable, thriving communities. Krupp’s Jewish priorities focus on LGBTQ+ inclusion, arts and culture, and solidarity with other oppressed peoples in the Boston and Los Angeles areas. She sits on the board of Keshet and the Arts & Culture Task Force at CJP.