Addressing Stagnation in Core Support and Beginning a New Discussion

posted on: November 13, 2012

Note: This post was updated on 11/15/2012 to correct a typographical error.

By Niki Jagpal

Since we released our latest analysis of general operating support, there has been some interesting discussion and reaction. The comments on our piece posted on Philantopic demonstrate how stagnant the conversation about core support versus project support is and has been for the last decade. As Paul Brest, the former president of the William and Flora Hewlett Foundation noted in a post on SSIR this spring, many foundations impose unnecessary restrictions on their grantees by not providing sufficient core support. As he said, this reflects, “the misguided beliefs that general operating support grants cannot be evaluated and that donors can have more impact by designating funds for programs. A decade-plus of advocacy by Independent Sector, Grantmakers for Effective Organizations, and the National Committee for Responsive Philanthropy seems to have made minimal gains.”

As we noted in our fact sheet, although the total amount of grant dollars provided from 2008-2010 increased by $3.4 billion compared to our data from 2004-2006, a 34 percent increase, the share of grant dollars reported as general operating support remained stagnant at 16 percent. And though the median foundation share for core support increased slightly from 6 to 8 percent in the two time periods analyzed, a moderately encouraging sign, the fact remains that finding core support remains a challenge for most grantees. For example, as an anonymous commentator said on our piece on Philantopic, “As a nonprofit administrator, I couldn’t agree more with this piece. In my experience, it tends to be the most famous, well-capitalized foundations that most tightly restrict their grants. These are supposed to be the most sophisticated in the sector. They often are very competitive in their hiring and compensate well. I can’t help but wonder if these program officers simply assume they know what’s best. The most sophisticated foundations seem to be the most paternalistic, which is the last thing we need.”

So what is it going to take for grantmakers to increase the share of their grants provided in the form of unencumbered support? How many more nonprofits need to voice the benefits of this support? How many studies and analyses of data do we need for foundations to address this stagnation that stymies their grantees’ ability to be more effective?

Perhaps we need to shift the conversation from an either/or approach to project support versus general support. As we state in our piece on Philantopic, we don’t disagree that project support is useful; we just don’t think that it ought to comprise 84 percent of philanthropic dollars. If we shift the conversation away from the current discourse, perhaps more grantmakers will see the value of core support not just for their nonprofit partners but for their own institutions. If we focus on the shared purpose of a grantmaker and a grantee, for example, maybe things will change. If more grantmakers engage authentically with their grantees and solicit their feedback about what they and the communities they serve need most, the conversation can move away from its decades old discourse and provide an opportunity for change in the state of core support grants.

It is high time that the myths about, e.g., the lack of accountability in general operating support be confronted directly and it is our hope that analyses such as ours will provide foundations with the kind of information they need to change. It is indeed time for a reckoning and a long-overdue sea-change in how general operating support factors into grantmaking strategy.

Niki Jagpal is research and policy director at the National Committee for Responsive Philanthropy (NCRP).