As a big supporter of the Center for Effective Philanthropy, I was pleased to be asked to provide feedback on an earlier version of the recently released Nonprofit Challenges: What Foundations Can Do.
In 2009 and again in 2012, the Ontario Trillium Foundation (OTF) used CEP to conduct surveys of our grantees and applicants to find out how we help them to meet their missions, how easy it is to work with us, and where we can improve.
Reading Nonprofit Challenges: What Foundations Can Do, the three main findings came as no surprise to us at OTF, as they reflect the surveys of our own grantees. It stands to reason they are looking for foundations or funders to do more to help them meet the demand of their core programs and services, upgrade their technology, or help nurture their leadership skills. What I was particularly interested in was the perceived lack of support or help for not-for-profits to help them develop different business models.
For OTF, the primary finding from our surveys is that we don’t do enough to help organizations with sustainability. Like many funders, our foundation provides time-limited support for specific projects that will help us achieve our desired outcomes. That is our mandate. There is no doubt that we need sustainable organizations to do the work, but as funders we often don’t see that funding that sustainability is a priority in and of itself.
Over the course of my career, I have been on both the grantee side and the funder side of the table. Understanding both has led me to frame the issue of sustainability with what I call the 3Rs: Relevance, Resolve, Resources. All three are required for long-term sustainability. As funders, we can help to build core strength in each of these areas to better equip our not-for-profit partners to take on our shared objectives.
- Relevance: Does the mission of the organization meet the changing needs in society? Is the organization adaptable and agile so as to be responsive to the dynamic shifts that can take place over time? As funders, can we help organizations to better understand and adapt to new environments?
- Resolve: What is the commitment to the organization? Are people willing to participate in the life of the organization—through membership, volunteering, governance, and philanthropy? If not, why not? What needs to change to build or increase that participation? Can foundations help organizations to find supporters who will be committed to tackle the issues of today and tomorrow?
- Resources: What financial, capital, and human assets does the organization bring to the table? Is the organization living paycheck to paycheck or is there a plan for future needs and future operations? What is the funder role in ensuring ongoing resources beyond the grant?
Here in Ontario, like elsewhere in North America, we are in changing times. The reality is that organizations can’t count on ongoing funding from foundations or deficit-laden governments over the long term. Moreover, there is increased competition from a limited pool of individual donors. More than ever, organizations need to develop new or different business models for earned income or social enterprise.
At OTF, we believe that a strong not-for-profit sector is a key component of our economy and community vibrancy. We have begun to really think seriously about how to help the sector to be on more solid ground. For example, as our survey respondents suggest, funding deeply offers greater sustainability and ultimately greater impact. OTF is working on adjusting our granting streams so that when larger, multi-year initiatives come to us with significant potential for community impact, we have the flexibility to increase the effectiveness of our investments by resourcing these initiatives fully, appropriately. We don’t have any definitive answers, but we are trying to be more intentional in our investments to find innovative solutions for greater sustainability.
We allocate about one third of our investments towards capacity-building initiatives. By this we mean helping our grantees undertake projects like organizational reviews, strategic/business planning, fundraising/marketing planning, or board and volunteer development and training. These grants help to ensure Relevance and build Resolve.
For Resources, we also support organizations to develop different business models, including shared administrative platforms, shared space, and new revenue streams such as social enterprises.
Shared administrative platforms offer considerable potential for smaller organizations which don’t have the critical mass to support administrative operations and want to focus their efforts on the cause.
For several years now, OTF has invested in initiatives for shared space in three main ways: capital for renovations/retrofits/accessibility; funding the pre-planning or ‘exploration’ that must come ahead of actually sharing space; and the “now what?” investments that will help organizations move forward together after space is shared.
Social enterprises are a great way to help the sector to both enhance and diversify their revenue streams. This includes investing in start-ups or expansions of existing enterprises through capital costs, training, business incubators, and capacity building for the sector to research and share best practices. In addition, we invest in increasing access to social capital such as community venture funds, community loan programs, and social investment loan funds.
From our foundation’s perspective, we know that the sustainability and capacity of the organizations we fund is vital to helping us accomplish our goals. We are looking to build partnerships with the not-for-profit sector to meet those shared objectives and recognize that finding new and innovative ways to attain sustainability is a shared responsibility.
Andrea Cohen Barrack is CEO of the Ontario Trillium Foundation. You can find her on Twitter @CEOatOTF.