It was an eye-popping number: seven–year grants to Bay Area nonprofits.
This extraordinary initiative by the Walter and Elise Haas Fund has implications for how other funders could strengthen grantee organizations, as well as the whole embattled nonprofit sector.
In only the third year of these Endeavor Fund grants, it is already clear that many-year commitments are a promising and powerful practice. One seven-year grant can have exponentially more impact on job quality, organizational stability, and program strength than a series of seven one-year grants.
While these grants are unrestricted, they come with encouragement to enhance staff well-being. At half a million dollars a year, totaling $3.5 million to each of seven grantees, the grants are big enough to make possible substantial improvements in job quality.
A new study by Fund the People on the impact of this many-year funding stream found that the grantee organizations experienced four types of improvements: expanded paid leave; increased compensation; lighter fundraising burden; and better human resources systems. Taken together, the findings of the study reveal that these nonprofits now offer jobs that skilled staff want to stay in for many years, leading to better retention and less disruption of relationships within the communities they serve. Many nonprofit managers would like to make such investments in their staff, but feel they can’t for fear that future revenues won’t sustain the costs.
Making the Work Sustainable
First, many-year grants enable expanded paid leave policies that are key to staff well-being, particularly for those whose work takes a personal toll.
The seven mid-sized nonprofits supported by the Endeavor Fund share a common overarching mission: closing the race and gender gaps in and around Oakland, California and each works directly with low-income people and youth. In interviews for Fund the People’s study, staff members talked about the secondary trauma they face when community members become homeless, are incarcerated, or are deported — especially difficult when the employees have lived through similar hardships themselves.
Insufficient paid leave to recover from crises leads to burnout and quitting. Most of the Endeavor Fund grantees expanded their PTO policies, including winter shut-down weeks and/or longer and earlier sabbaticals, resulting in better rested and, ultimately, more productive staff. Linda Sanchez, Executive Director of Youth Organize! California (YO! Cali), reported that her staff had requested more paid leave in order to “just be able to have the space and time to attend to all the other parts of our lives while we are doing this important work, understanding that we’re all-in on the mission and vision — and we are also whole people that have whole lives.”
Second, pay raises brought salaries closer to the extremely high cost of living in the Bay Area; (it takes $135,154 to support two adults and one child, according to the MIT Living Wage Calculator). Two of the grantee organizations, East Bay Alliance for a Sustainable Economy (EBASE) and the East Bay Community Law Center, are unionized, and the first union contracts after the Endeavor Fund grants began took major leaps forward in compensation and benefits. For example, thanks to a substantial raise, Uma Nagarajan-Swenson of EBASE was able to pay down her student loans, begin contributing to her 401(k), and start dreaming about graduate school.
Disrupting the Nonprofit Starvation Cycle
Third, executive directors talked about the relief from fundraising burdens, such as constant proposal- and report-writing. Julia Arroyo, executive director of the Young Women’s Freedom Center, describes fundraising for a multimillion dollar budget with grants of $50,000 or $100,000 as akin to “building a house out of popsicle sticks. To have [a grant] that’s long, over time, really enables you to [reach for] deeper impact.” One striking feature of the Endeavor Fund is that while the reporting requirement is just one annual conversation, in between they convene peer-support gatherings and offer technical assistance.
Some grantee executive directors have become more proactive with other funders, asking for multiyear commitments, or even rejecting small, overly restrictive grants with onerous conditions. Leticia Landa of La Cocina, has begun asking other funders to extend their one-year grants to two or three years; she was pleased recently when one said yes to a three-year grant.
Finding Internal Stability
Finally, one surprising finding in the “Long-Haul Grantmaking” report is how much the grantee organizations have changed their internal systems and processes. The stability and flexibility afforded by a many-year grant led them to expand employee handbooks and HR policies, clarify job descriptions, create new channels for staff input, improve transparency, develop performance review and discipline processes, and, most commonly, to formalize the pay scale and steps within each level. YO! Cali was able to hire operations and financial directors, meaning that organizational tasks are now less likely to land on other staff’s plates.
Also surprising was how enthusiastic some non-management staff are about these seemingly dry, internal changes. Instability is a hallmark of nonprofit workplaces, and this internal organizational development seems to have reduced staff perceptions of instability.
The Promise of Many-Year Grants
Better program quality flows from these many-year grant advantages. Several Endeavor Fund grantees have undertaken longer-term planning than they might have if they hadn’t known that more years of unrestricted funding were guaranteed. Longer-term staff gain more skills and build deeper relationships with people in the community. One youth worker, Alejandra Astorga of Oakland Kids First, reported that her employer’s newly increased concern for her health and mental health taught her to encourage teenagers to prioritize their own well-being. Similarly, the new food businesses launched with support of La Cocina tend to have better pay, benefits and hours than typical restaurants and caterers, because the entrepreneurs were trained and coached by well-paid and well-supported staff.
How long is long enough to bring about these transformative impacts? Some many-year grant programs, such as the Ford Foundation’s BUILD grants, last five years. Pia Infante, co-director of Trust-Based Philanthropy, has called for ten-year grant commitments. Five, seven, ten years? More experimentation and research are needed before we know the sweet spot.
Meanwhile, grant programs like the Endeavor Fund remain a rarity. Why? “Multiyear” unrestricted grants are now a familiar component of trust-based philanthropy, but often multiyear means two or three years — not long enough to feel secure that pay raises or a new program initiative will be financially sustainable.
Funders may be reluctant to extend their commitments into this many-year range. The Endeavor Fund story illustrates one reason for caution: the Walter & Elise Haas Fund closed a number of smaller grants to consolidate money for these seven large long-term commitments.
In addition, the process of establishing sufficient trust in organizations and their leadership to make a many-year commitment was time-consuming. Before deciding on this groundbreaking initiative, the Fund held a series of discussions, first internally with their board of trustees then with community partners, about what it would really take to reduce the race and gender wealth gaps in the East Bay. The due diligence research into potential grantees included interviews totaling more than four hours, for which all organizations were compensated, whether or not they were chosen. By the time the grant commitments were made, the Endeavor Fund staff felt confident that these organizations were values-aligned and strong enough to move towards their missions over seven years.
Not all grantmakers will be able to dedicate so much time and discernment to choosing grantees. But for funders with visionary goals, many-year grants are a promising innovation. “One-year grants don’t lead to transformation in the community,” saysJamie Allison, executive director of the Walter & Elise Haas Fund. It’s time to move beyond multiyear to many-year grantmaking.
If many-year grants become more common, the nonprofit sector will become stronger, more able to weather storms such as the recent COVID crisis and the current political crises. And if many-year grants are focused on job quality improvement, the nonprofit sector could become a place where more mission-driven people could afford to work long-term, to support children, own homes, and prepare for retirement.
Such talent investments are difficult to achieve with one- and two-year grants. Along with unrestricted giving and reduced reporting requirements, many-year grants are an essential component of trust-based philanthropy.
Betsy Leondar-Wright, Ph.D., is a sociologist who coordinates the Staffing the Mission project at Fund the People.
