When the economy is rocky, grantmaking foundations should be thinking about the best way they can help nonprofits thrive and advance the work they both care about.
The trials of the Covid pandemic and lockdowns turned quickly into the trials of runaway inflation and economic uncertainty. Difficult months turned into difficult years—and there’s no clear sign of that changing anytime soon for fundraisers.
Raising money is never easy, but the roaring 2020s have been particularly difficult. And while the work of fundraising is made increasingly difficult because of economic trends, the missions funded by donor dollars are increasingly important.
On top of that, there has been some evidence that donors are already planning to give less. Time will tell, but if history is any indicator, the nonprofit sector is likely to weather this storm well—thanks, again, to the hard, disciplined work of fundraisers.
But that also raises the question about the role of donors—especially grantmaking foundations—in navigating these waters. In 2020, a group of foundations committed to easing their grantmaking process, kicking off what we described as the “pro-grantee revolution.”
Our hope was that the pro-grantee revolution would outlive the pandemic and lockdowns and that grantmaking foundations would learn from these changes that a streamlined, more accessible grantmaking process is more effective for both parties.
There has lately been less discourse around how foundations can facilitate better giving, but it is worth revisiting. Representatives from the Morris and Gwendolyn Cafritz Foundation have provided four tips for grantmakers in a piece at the Chronicle of Philanthropy.
Their advice: Provide general operating support. Be responsive and accessible. Foster relationships among nonprofits. Support a wide variety of technical assistance.
This is great advice and can be boiled down to trusting organizational leaders and supporting them in the ways they deem appropriate. Having identified an organization you want to support, shouldn’t your interest be in maximizing the impact you can have and helping them to grow?
Giving is a great responsibility, to be sure, but the best way to manage that responsibility is to know those you are supporting. (Of course, good giving all starts with knowing your own giving goals and mission!)
One thing missing in the advice from the Carfitz Foundation is a reminder that the 5% payout requirement is a floor, not a ceiling. Capacity-building grants and general-operating support are great—but there are many deserving organizations with enormous opportunity to do great work. We should feel no motive to put an artificial ceiling on the support we can give to unlock that opportunity.
None of this, of course, is an excuse for fundraisers or organizational leaders to rest on their laurels. Much should be expected of both, and by forging real relationships, you can be sure that your grants are being well-used.
