The call for foundations to provide more core operating support is a common and needed refrain from nonprofits and philanthropy-serving organizations like the Center for Effective Philanthropy (CEP) and Grantmakers for Effective Organizations (GEO). The drumbeat is getting louder as more foundations are announcing that they are embracing this approach. But across the field, change in practice is not keeping pace with change in attitude, as CEP’s research finds.
Until recently, little practical documentation had existed about how foundations can go about providing core operating support, and what those funders that do provide this support have learned in their journeys. CEP’s new study on multiyear general operating support, and in particular its accompanying guide with action steps for funders looking to provide more of this type of support, are much needed additions to the field. Another resource I’m excited about is Wind in the Sails: Grant Making for General Operating Support at The Atlantic Philanthropies (1982-2016), a case study that looks under the hood of how The Atlantic Philanthropies approached making core operating grants before closing its doors this year.
Throughout its almost four decades of giving totaling $8 billion, Atlantic made nearly half of its grants with considerable general operating support contributions. Indeed, providing such support to organizations and people was a fundamental approach in the foundation’s strategy for reaching its goals.
Ben Kerman, the former global head of strategic learning and evaluation at Atlantic, authored this case study, which examines how foundation staff made decisions to provide core support — and how they responded to challenges along the way. He also looks at mistakes Atlantic made and the lessons the foundation learned from them, all of which I believe can be useful to foundations of many types and sizes considering their grantmaking strategy today.
One of the questions that foundations considering general operating support might have is: under what circumstances does it makes sense to provide such support? In the case study, Kerman describes four overarching questions that Atlantic staff typically needed to answer before deciding whether and how to make general operating support grants:
- Does the specific operating support fit the foundation’s larger program-wide investment approach?
- Has a due diligence assessment revealed that a grantee is ready to benefit from such a grant and meet expectations?
- How will the foundation carry out oversight and support a grantee that received core operating support?
- How and when will the foundation conclude operating support?
In the case study, Kerman describes how Atlantic went about answering each question. For instance, while lack of financial reserves and weak organizational resilience might often be reasons to rule out a project grant, those same vulnerabilities might be reasons for providing operating support — i.e., to help an organization build that capacity. Further, in seeking to provide ongoing support to grantees receiving general operating support, Atlantic would often help establish and fund strategic learning and evaluation processes that grantees could use for organizational development and quality improvement, including learning how to commission and oversee evaluations.
When Atlantic knew it would be exiting its core funding, the foundation typically focused on the needs of the field it had been supporting rather than the individual organizations receiving grants. In that vein, Atlantic might fund a building where organizations could co-locate or seed a community foundation that could then raise local funds.
The resource also includes mini case studies that delve into why Atlantic decided to make a core operating support grant to particular organizations and how those grants turned out. One case study describes Atlantic’s rationale for investing in an organization that it knew would likely be stymied for years because of the political climate at the time. Another discusses how Atlantic responded when it learned that a long-time grantee had not raised promised matching funds. A third notes how Atlantic could have taken a more active role when a grantee was buffeted by changes and other foundations’ demands that led it away from its core mission.
Peer learning is one of the most effective ways for foundations to consider new approaches to their grantmaking. For foundations considering providing more general operating support, what Atlantic learned over nearly four decades can provide practical insights into when and where this approach can pay dividends. Additionally, foundations would benefit from digging into the profiles in this companion report to the CEP study, titled Making the Case: Foundation Leaders on the Importance of Multiyear General Operating Support, in which foundation leaders share their learnings from providing such support.
Perhaps by seeing more and more examples of funders like Atlantic and the five featured in Making the Case that have taken the dive of providing general operating support — and found that the water is just fine — other foundations may become more willing to translate their belief of the importance of this crucial support into action.
Susan Parker is a writer and editor who consulted with The Atlantic Philanthropies.