For every time someone in philanthropy says, ‘if you know one foundation, you know one foundation,’ they have heard tenfold the call from nonprofits for more general operating support and multiyear grants. With philanthropy’s wide diversity of approaches and practices, there remains a need for more trust-based and unrestricted funding.
That’s why, in reading the State of Nonprofits 2024 survey, I was pleasantly surprised to learn that a key finding was that nonprofits are reporting that their funders are maintaining or making new commitments to change their grantmaking practices, including reducing funding restrictions or streamlining processes. Have we — as a sector, not just one foundation — started listening?
The MacArthur Foundation, where I am the program officer for our Philanthropy Field Support program, has embraced key changes to our own grantmaking practices in ways that strive to make things better for both our nonprofit partners and our program staff. These changes fall into a number of categories, from streamlining and reducing funding restrictions to greater transparency, and in the interest of not just “one foundation,” I wanted to outline them here and offer insight into our experience implementing them.
Streamlining
In 2022, the Foundation introduced a new practice in which proposals for general operating support grants no longer require narrative applications. In fact, most nonprofit partners do not even need to enter an application portal! The static, written application has been replaced with a call with a program officer in which we have a dynamic, back-and-forth conversation; we can ask questions and our partners are welcome to ask us questions in return. The documents we require are minimal, and almost certainly things the organization has readily at hand, like a list of Board members and the current annual operating budget. This process fosters relationship, mutual trust and hopefully gives time back to our nonprofit partners to do the work we are supporting them to do.
Reducing Funding Restrictions
In that same vein, across the Foundation, our general operating support grants have steadily increased. In 2020, 67 percent of our grants were project-based. That same year, we introduced a new type of grant called ‘flexible support’ in which grantees that cannot receive general operating support, such as a fiscally sponsored project or center within a larger institution, can receive a near equivalent to general operating support in the form of flexible funding that is meant to support the overall goals of the work, not a specific aspect of it. In 2023, 53 percent of our awards are project grants, 15 percent are flexible support, and 28 percent of our grants are general operating support (the remaining 4 percent support our MacArthur Fellows, which are famously “no strings attached” support to exceptional, creative, and inspiring individuals).
This trend toward more general operating support also intends to demonstrate trust in nonprofits to do what is best for their organizations and communities. Multiyear support is another element of this. Institutionally, around 60 percent of MacArthur’s grants are multiyear. This kind of support helps institutions invest in long-term sustainability of their organizations and their work.
Staff Wellness
Key finding number one in CEP’s State of Nonprofits report is that burnout remains the top concern for most nonprofit leaders, which emphasizes that well-being is not frivolous. Often well-being looks a lot like fundamentals: livable wages and health insurance; professional development opportunities for staff to get training in fundraising, marketing, tech, and financial management; and at least a reasonable number of paid personal and vacation days. General operating grants play an important role in this.
Still, some funders are going beyond general operating support and specifically providing wellness grants to organizations knowing that steadfast nonprofit leaders tend to hesitate pulling resources away from “the work” to better support themselves and their staff. MacArthur Foundation joined a funder community hosted by The Wellbeing Project to bring donors together to share lessons and resources on how to better support our nonprofit partners’ well-being. The Wellbeing Project and others are featured in CEP’s new research snapshot, How Foundations Are Supporting Grantee Staff Well-Being.
Other Changes: Demystifying the Grants Process
The CEP report does not explicitly state this, but I’d also like to highlight ‘demystifying’ as a commitment to changing grantmaking processes. I have no doubt that the bane of many a development professional is a website that gives next to no information about funding priorities, how to apply, what the application process is, or even who works at the donor organization.
Our newly-redesigned website easily navigates to each of our programs and gives an overview of the program, a summary of the strategy, and explicit grant guidelines about what we fund. While many state “we are not accepting unsolicited proposals at this time,” we are saving our nonprofit colleagues a trip to the application portal and instead inviting them to “contact us to share new ideas and perspectives,” to be put in touch with a person rather than a grants management system. For our project grants, we are also working to make our relationship-centered process clear and transparent with an illustrated guide.
In the Philanthropy portfolio I oversee, we went through a strategy review last year. The headlines are that through our grantmaking and our role in the sector, we aim to increase transparency and feedback between funders, nonprofits, and the public; to reduce burdens on nonprofits and changemakers to increase their impact; and to strengthen skills for philanthropic and nonprofit staff. I hope CEP’s report findings and our response to it may be a step towards advancing our objectives.
The changes we have made to our grantmaking processes as an institution and within the Philanthropy Field Support Program are because we are listening, and we want to be good partners. I hope other donors are taking up these practices, so this is not another example of “one foundation.”
Claire Poelking is the program officer for MacArthur Foundation’s Philanthropy Field Support Program and New Work Program. Find her on LinkedIn.
