In its recently released report, “Foundations Respond to Crisis: Lasting Change?,” the Center for Effective Philanthropy (CEP) shared new research in which foundations reported working differently now than in early 2020 — and indicated plans to sustain most of these changes. The report reveals numerous areas of change in foundation practice and in leaders’ plans for the future, as well as some disconnects, barriers, and additional opportunities for further change. This is the second in a series of blog posts in which members of CEP’s research team share further data and insights, beyond what was included in the report, that the research revealed. Find other posts in this series here.
Nonprofit leaders have long called for funders to provide more multiyear general operating support (multiyear GOS) grants. These grants provide nonprofit organizations with stability and position them to grow their impact by enabling nonprofits to plan, to flexibly use resources where they are most needed, and to do the long-term work of addressing systemic and complex social issues.
Yet, as research from CEP and others have found over the years, nonprofits rarely receive these grants. And even as foundation leaders report being more flexible with and responsive to grantees, a sobering disconnect between funder attitudes towards multiyear GOS and their limited provision of these grants persists: Only about 25 percent of foundation leaders say that, since early 2020, they are providing more multiyear unrestricted support. About two thirds of these funders say they will continue with these new, higher levels of multiyear GOS and about one third remain undecided about their future practice.
The unfortunate lack of movement on multiyear GOS is especially notable because CEP’s 2020 research on this topic found no clear barriers that get in the way of making these grants. We were left to conclude that a majority of foundation leaders simply have not felt it a fit with their approach or important enough to prioritize shifting their funding practices.
Yet, there’s much to learn from the subset of foundation leaders who provide more multiyear GOS. They do so intentionally, borne of their belief that these grants yield crucial benefits with virtually no downsides. Virtually all of these leaders said that multiyear GOS grants help to build trust between funders and grantees, strengthen relationships, and enable greater foundation and grantee impact. Some underscore that providing multiyear GOS grants is part of their focus on equity. Additionally, many of these leaders emphasize that providing multiyear GOS is easier and more efficient for both foundation and grantees.
Importantly, funders who provide multiyear GOS have much to say about the benefits of these grant types, as well as advice and suggestions to funders thinking about providing these grants. To capture these insights, we at CEP created two companion pieces to serve as additional resources.
- Making it Happen: A Conversation Guide shares the perspectives of leaders whose foundations provide more multiyear GOS than typical. It offers specific and tangible suggestions and insights, along with questions to guide discussions with foundation staff and boards. This guide is intended to be a resource for foundation leaders and boards seeking to start providing, or provide more, multiyear GOS grants.
- Making the Case: Foundation Leaders on the Importance of Multiyear General Operating Support profiles five funders that provide more multiyear GOS than typical: the California Wellness Foundation, the Claneil Foundation, Foundation for a Just Society, the Mary Reynolds Babcock Foundation, and the Paul Hamlyn Foundation. In their own words, these leaders describe why they provide multiyear GOS, discuss the connection between equity and multiyear GOS grantmaking, and share advice to other funders.
For those of you readers reassessing your provision of multiyear GOS — whether you’re considering providing these grants for the first time or increasing your provision of multiyear GOS — here’s some advice from these foundation leaders:
- Just do it! Funders that provide more multiyear GOS grants than typical experience many benefits, and few downsides, of multiyear GOS grantmaking. They suggest that funders try it out. As one foundation leader said, “At many foundations, project grants are the default. Break this down more concretely. What are the places where GOS makes sense? And what are the places where it does not? Get beyond the general exhortation.”
- Prioritize strengthening grantee organizations. Foundation CEOs — including those who are not providing many of these grants — believe that GOS and multiyear grants are effective for supporting the programmatic work, operational health, and ultimate impact of nonprofits. And providers of multiyear GOS point out that these grants strengthen grantee organizations, which, in turn, enables greater grantee and foundation impact. “We have a commitment to advance equity and justice work, and folks are in this work for the long haul,” said one foundation leader, noting that, “Multiyear GOS allows them to be responsive in incredibly dynamic environments and to do their best work.”
- Commit to building trust and developing strong funder-grantee relationships. These leaders see multiyear GOS as a way to trust and be flexible with grantees. One leader described multiyear GOS grants as “engendering stronger relationships and trust that allows honest dialogue with our grantee partners, which means we do better work because we get less hyperbole and more reality.”
- Align foundation processes, systems, and culture to encourage more multiyear GOS grantmaking. For foundations beginning to make multiyear GOS grants, leaders underscore the importance of ensuring the foundation’s processes, systems, and culture are designed to encourage more multiyear GOS grantmaking. As one foundation leader said, “What are the structural things inside the foundation that might be getting in the way of making multiyear GOS grants? What are the assumptions that people have? All of these things are small signals that can add up to big things in the way that program officers and directors make decisions.”
- Establish clear expectations for learning from and assessing multiyear GOS grants. These leaders do not see any one grant type as more or less conducive to assessment. They say that they rigorously track, assess, and learn from multiyear GOS grants and dispel the harmful myth that GOS grants are incompatible with rigorous learning and assessment.
And if you’re a funder that’s upped your support for multiyear GOS and you want to share your story, be in touch. We’d love to hear from you.
For more, download Foundations Respond to Crisis: Lasting Change? here. Download New Attitudes, Old Practices: The Provision of Multiyear General Operating Support here and Making It Happen: A Conversation Guide here. You can also read profiles of five of the foundations that participated in the interviews described in this blog post in Making the Case: Foundation Leaders on the Importance of Multiyear General Operating Support here.
Naomi Orensten is director, research, at CEP.