Strengthening Nonprofits: The Value of Complementing Multiyear GOS Grants with Capacity Building Supports

Naomi Orensten & Kate Gehling

Nonprofit leaders and sector advocates have long called on funders to prioritize strengthening nonprofit organizations. Our research here at CEP has found that nonprofit leaders not only want help from their funders to strengthen their organizations, but they go on to say that general operating support (GOS) grants have the most impact on strengthening their organizations, followed by capacity building/organizational effectiveness grants.[1]

Yet these grant types are more the exception than the norm. CEP’s Grantee Perception Report (GPR) dataset, specifically data which covers the last 10 years before the COVID-19 pandemic, confirms that less than one-quarter of grants – 21 percent – were GOS. Even fewer grants – 12 percent – were multiyear GOS.[2] Similarly, prior to the pandemic, only 30 percent of nonprofit leaders reported receiving any capacity building support in their most recent fiscal year.

And while the topics of capacity building and general operating support have been the subject of many articles and discussions, there is limited field-wide data about the practice and value of funders providing grantees simultaneously with both GOS and capacity building grants.

For these reasons, as part of a broader research study exploring the provision of multiyear GOS, we sought to hear from foundation and nonprofit leaders about the combination of GOS and capacity building grants. (For information on the methodology for this study, see Appendix B of New Attitudes, Old Practices: The Provision of Multiyear General Operating Support.)

Here’s what we learned:

Almost 60 percent of foundation CEOs surveyed said that their foundations provide some grantees with a combination of GOS and capacity building support, but most provide this combination to very few grantees (Figure 1).[3] Unsurprisingly, the combined provision of multiyear GOS together with capacity building supports is even less common; only one-quarter of nonprofit leaders report having ever received capacity building support specifically as a complement to a multiyear GOS grant.

But it can be particularly powerful when foundations do strategically provide this combination of supports. The overwhelming majority of nonprofit leaders (82 percent) who have received capacity building support as a complement to a multiyear GOS grant found it very or extremely helpful, describing it as helping them invest in and strengthen their organizations. They say that receiving capacity building supports as a complement to a multiyear general operating support grant helped them plan for the future, focus on their work, and invest in staff while making targeted improvements. And, as one leader noted, “[without] having to divert funding support from the core work.” Leaders describe strengthening operations, planning, fundraising, raised communications capacities, investing in staff professional development, and improving their DEI efforts. One leader said:

“Multi-year general operating support is quickly (and greedily) allocated to our various programs and their needs. There is often very little, if any, left for the long-term strengthening of our organization. When foundations have offered this additional help, the requirement to spend it on capacity-building has been welcomed, as it is needed, and the resources did not need to come from programming.”

The subset of foundations that provide more simultaneous multiyear GOS and capacity building supports do so out of a commitment to strengthen grantee organizations and desire to help grantees address needs that they might not be able to prioritize with multiyear GOS grants alone. Says one leader, “A big part of our consciousness is that we want to strengthen the organizations we’re interacting with, as opposed to being neutral or weakening them in the way we do our funding.” Another leader explains why they intentionally add capacity building supports to multiyear GOS grants, “We’ve found that even when we provide flexible multiyear support, organizations often don’t use it for their internal processes. Maybe that’s because we’re operating in such a resource-starved context.” (Some nonprofit leaders expressed similar sentiments, with one emphasizing that “multiyear GOS grants are very helpful to overcome the severe limitations posed by project grants.”)

Some foundation leaders specify that this practice reflects their values in action, values such as listening to and supporting grantees, as well as commitments to equity, long-term durable change, and strong fields and movements. “We’re trying to listen really carefully to what our grantees say they need,” says one leader. Another leader added,

“We fund systems change and advocacy and focus on racial equity. This work is long-term, it’s not realistic to see outcomes on a one-year basis. So, it makes sense to make longer-term commitments, to provide unrestricted, multi-year grants, and to think about all of our grantmaking, not just our capacity-building grants, through a lens of organization building.”

These findings clearly illustrate – from the perspective of nonprofit and foundation leaders alike – the value of the combination of multiyear GOS and capacity building grants. Yet, this practice – like the practice of providing GOS and multiyear GOS grants – remains uncommon. We hope that these perspectives, along with additional resources below, will inspire more foundations to think about their role – or, as some may see it, their obligation – to strengthen nonprofit organizations.

*

The findings in this blog post come from data collected for CEP’s research study examining the state of practice in philanthropy regarding multiyear GOS, New Attitudes, Old Practices: The Provision of Multiyear General Operating Support.  This report is accompanied by Making the Case: Foundation Leaders on the Importance of Multiyear General Operating Support, five foundation profiles in which foundation leaders share, in their own words, why they provide multiyear GOS, and Making It Happen: A Conversation Guide for foundation leaders and boards seeking to start providing, or provide more, multiyear GOS grants.

Resources for Funders

For foundation staff and board members wishing to learn more about capacity-building supports and supporting strong grantee organizations, below is a non-exhaustive list of additional resources.

Below are examples of a few foundations that provide complementary capacity-building supports in addition to multiyear GOS grants:

  • The Ford Foundation’s BUILD program, which combines capacity-building grants with multiyear GOS grants, provides nonprofits with “predictable, flexible support to become more durable and resilient” so that they are best equipped to address inequality.[4]
  • The Segal Family Foundation provides flexible funding, out of a belief “that unrestricted funding is vital for an organization’s health and growth” and provides “partners with access to capacity building resources to strengthen their organizational health, adding value beyond just our grantmaking dollars.”[5]
  • The Meyer Foundation offers grantees flexibility, multi-year funding, and capacity-building supports, all of which are core to its focus on supporting “organizations that are building power to achieve a racially and economically just Greater Washington region.[6]
  • Paul Hamlyn Foundation, in addition to providing flexible and responsive funding, offers grantees non-financial funding to “add value to our grant-making and strengthen the organisations that we fund.”[7]
  • The Foundation for a Just Society prioritizes multi-year, general operating support in concert with grantee-driven capacity building that “fosters organizational and movement strengthening,” as part of its efforts to advance “long-term, structural change and meet immediate needs that enable the women, girls, and LGBTQI people most affected by injustice to be leaders, strategists, and agents of change.”[8]

Additional Resources

The Bridgespan Group Building the Capacity to Innovate: A guide for nonprofits

Center for Effective Philanthropy (CEP) Strengthening Grantees: Foundation and Nonprofit Perspectives and Providing Assistance Beyond the Grant Case Studies

Community Wealth Partners Five Elements for Success in Capacity Building and What Foundations Are Learning About Supporting DEI Capacity

GrantCraft by Candid Supporting Grantee Capacity Strengthening Effectiveness Together

Grantmakers for Effective Organizations (GEO) What We Care About: Capacity Building, What is Nonprofit Capacity and Why Does it Matter?, and Strengthening Nonprofit Capacity: Core Concepts in Capacity Building

Leap of Reason Ambassadors Community Performance Imperative: A framework for social sector excellence

National Council of Nonprofits What is Capacity Building?

Open Impact The New Normal: Capacity Building During a Time of Disruption

SSIR Transformational Capacity Building

TCC Group Capacity Building 3.0: How to Strengthen the Social Ecosystem

Naomi Orensten is director, research, at CEP. Kate Gehling is a former senior analyst, research, at CEP.

[1] Ellie Buteau, Charis Loh, and Temitayo Ilegbusi, “Strengthening Grantees: Foundation and Nonprofit Perspectives” (Cambridge, MA: Center for Effective Philanthropy, 2018), https://cep.org/portfolio/strengthening-grantees-foundation-and-nonprofit-perspectives/

[2] Ellie Buteau et al., “New Attitudes, Old Practices: The Provision of Multiyear General Operating Support” (Cambridge, MA: Center for Effective Philanthropy, 2020), https://cep.org/portfolio/new-attitudes-old-practices/

[3] We looked for and did not find any differences in the amount of capacity building support foundations provide, nor the amount of capacity building support and GOS foundations provide, based upon the leader’s self-reported race, gender, or prior experience working at a nonprofit, or the foundation’s type, size, or geographic region. Similarly, we looked for and did not find any differences in the amount of capacity building support nonprofits receive, nor whether nonprofits have ever received the combination of capacity building support and GOS, based upon the leader’s self-reported race or gender, or the organization’s size, geographic region, or issue area.

[4] “Building Institutions and Networks: Approaches,” Ford Foundation, accessed August 26, 2021, https://www.fordfoundation.org/work/our-grants/building-institutions-and-networks/approaches/.

[5] “What We Do,” Segal Family Foundation, accessed August 26, 2021, https://www.segalfamilyfoundation.org/what-we-do/.

[6] “Our Strategy: Advancing Equity & Justice Through Building Power,” Meyer Foundation, accessed August 26, 2021, https://www.meyerfoundation.org/our-strategy/.

[7] “About PHF: How we Work,” Paul Hamlyn Foundation, accessed August 26, 2021, https://www.phf.org.uk/about-phf/#how-we-work

[8] “Grantmaking Approach,” Foundation for a Just Society, accessed August 26, 2021, https://www.fjs.org/en#home-approach

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