More Lean Funders Should Consider General Operating Support - Exponent Philanthropy
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More Lean Funders Should Consider General Operating Support

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When funders give general operating support, they help sustain a nonprofit’s mission rather than specific projects. Nonprofits can use these funds to improve their organization in any way they choose, such as adjusting salaries, investing in technology, or improving fundraising efforts. Foundations with few or no staff are especially good at offering this support because they often know the communities well and have strong relationships with nonprofit leaders.

General operating grants are valuable because they:

  • Allow nonprofits to focus on their main mission and build infrastructure instead of taking on extra projects and fundraising.
  • Show confidence in nonprofit leaders, reducing burnout.
  • Reduce the power imbalance between funders and nonprofits, shifting the focus to the grant’s outcomes and the organization’s overall impact.

You can track progress with general operating grants, but don’t overburden your grantees. Keep reporting requirements in line with the grant’s size, and consider having mid-grant conversations instead of written reports, or accept reports prepared for other funders.

Measuring Outcomes

Some funders shy away from general operating support because they are concerned with precisely how to know if the grant is making a difference. Although general operating support requires a high level of trust, a foundation can use a variety of questions and techniques to measure success. Sister David Ann Niski, executive director of the Bernardine Franciscan Sisters Foundation in Virginia, asks basic questions about impact of the foundation’s general operating grants, such as:

“Is the organization still running, financially sound, and operating high-quality programs that benefit our community?”

Kathleen Odne, a board member of the Dean & Margaret Lesher Foundation in California, suggests these broader questions to consider regarding the impact of the foundation’s general operating grants:

  • Are we multiplying resources? Does the grant and its reputational capital encourage investments by others? General operating support can help organizations chase other (easier-to-come-by) funding for programs.
  • Are we building capacity (e.g., infrastructure, staffing)? Can we use our intellectual capital to inform the capacity-building?

As you track the progress of your general operating grants, be mindful of not overburdening grantees. As Judy Peckham, executive director of the Conrad and Virginia Klee Foundation in New York said:

“Too often as funders, we force our grantees to embark on new projects because that’s what we’re willing to fund. Yet, organizations with good core programs often desperately need funds for administrative costs to keep those programs strong. If you’re nervous about outright operating grants, consider granting more than a requested project budget to offset administrative costs for that project.”

Build Trust with Grantees

Take your relationships to the next level and ask current, past, and potential grantees to share their greatest needs and ask whether this type of support would help. Such a conversations indicate your openness to dialogue and willingness to be responsive. The Bernardine Franciscan Sisters Foundation received this feedback from one of its grantees:

“Core operating support has allowed [The Boys and Girls Club] to avoid mission drift in seeking funding.”

Another grantee said:

“This grant has been immensely helpful by assisting with our greatest of needs: fundamental operating expenses.”

General Operating Support Grants by Lean Funders

Over two-thirds of foundations (69%) surveyed in the 2024 Foundation Operations and Management Report gave general operating support grants. On average, these foundations awarded 40 such grants in the last fiscal year, making up 52% of their total grant budget. The average grant amount was $41,292, with a median of $21,312.

The number of foundations giving general operating support grants has grown over the past 5 years, but the increases were not statistically significant.

Learn About Other Types of Grants in the 2024 FOMR »

Is General Operating Support Right for You?

Should your foundation provide general support grants? It depends on your grantmaking goals, your strategy to achieve them, your community’s needs, and how best to address them. It also depends on your board’s preferences and the types of grants that keep them engaged.

Whether you decide to provide general operating support or not, it’s important to thoroughly evaluate its potential impact. This type of funding can significantly benefit both your foundation and the nonprofits you support, reflecting one of the most common requests from nonprofits in the Grantee and Applicant Perception Survey.

Here are some steps to consider:

  • Use this and other resources to educate your board about general operating support.
  • Talk with fellow grantmakers about their experiences.
  • Consider allotting a portion of your grantmaking budget to general operating grants. Discuss a potential strategy and process for these grants.
  • Identify prospective grantees. Does the grantee have a track record of success, or is it a start-up that you’re keen to invest in? Does the grantee have the leadership and systems in place to be successful at managing unrestricted funds? Or can you help to build those areas?
  • Ask grantees if general operating support would help. Critical operating costs often are the most difficult to fund, but grantees may not reveal the need unless asked. Many are accustomed to foundations that prefer project grants, not operating support.

As increasing numbers of funders embrace general operating support, we encourage you to learn more by reaching out to staff and fellow Exponent Philanthropy members.

This Blog Is Featured in Our Final Issue of Essentials

Essentials: Greatest Hits
This edition of Essentials covers essential and enlightening topics that you’ll find valuable for reference. As the final issue of Essentials, it features our most popular articles for lean funders, covering philanthropy basics and advanced topics like equitable grantmaking and reducing power dynamics. Download the last issue of Essentials »

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  1. jamila

    This is a great idea! Further, I hope funders consider funding living wages, paid time off, and health benefits for grassroots organizations. #staffingthemission

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