Tips for a Wise Grantmaker*
By Jane Kendall, President, North Carolina Center for Nonprofits
- Provide multi-year support.
Support sustained efforts. Make investments for at least two to three years rather than one-shot, one-year grants. As with short-term investments of your endowment funds, short-term grant investments often show little return. - Support programs over projects.
Support programs that are central to the mission of the nonprofits whose work you value - rather than "special projects" that tempt the organization to veer from its mission and strategic priorities. - Sustain results over novelty.
Consider support for specific programs with documented results - rather than pushing only new programs or projects. If you support something new, fund it long enough to help it begin to become established and sustainable (2-3 years at least.) - Offer unrestricted funds for flagships.
Provide unrestricted grants to particular organizations whose missions correspond closely to your goals. - Make investments for desired results.
Support the full cost to do what is proposed, including necessary expenses for planning and raising funds; reasonable salaries and benefits for the people required to do the job well in the time allocated; financial oversight; office space, supplies and supervision of the effort; and evaluation of results. Think twice before you cut the amount significantly. The group may be better off with no grant than with one that does not pay the full cost of the proposed effort. You're not helping when you make a grant that's inadequate to do the job well. As in business, an investment that is too small for the job is often wasted. - Promote staff development and renewal.
Support nonprofits to invest in their own human resources. Protect your investments by funding professional development, sabbaticals and vehicles to enable staffers to exchange ideas and combat burnout. - Improve board and management capability.
Support programs to strengthen nonprofits' board leadership and management capability. Do not try to be the management consultant yourself. Your environment and stakeholders are different from nonprofits' environment and stakeholders. Some management principles are transferable from foundations and corporations, but many are not. As a grantseeker, the nonprofit may have difficulty telling you this. - Address root causes, not just symptoms.
Invest in advocacy to address the root causes of problems, not just their symptoms. Support education of the public and elected officials. - Promote financial sustainability.
Support multi-year efforts to build the financial capacity and stability of organizations whose work you value - broadening their funding base to be more sustainable, recruiting members, raising funds from individual donors, creating endowments and marketing. Most successful investments of this type require at least three years. Also support sound financial management (e.g. audits, CPA help, technical assistance, management information, professional development for staff.) - Support evaluation of results.
Expect results, but pay what it costs to get results and to measure them. Also support research and development for creating evaluation strategies. - Fund strategic planning.
Invest in the costs of strategic and long-range planning to help nonprofits focus their mission and goals and clarify their unique niche. Fund board retreats. Staff time for organizational planning and consultant help (but don't try to select or be the organization's consultant.) - Encourage collaboration.
Underwrite collaboration among nonprofits working in areas of interest to you when they initiate the collaboration. Externally imposed cooperation seldom works in the long run. Fund the staff time and expenses for joint planning and for exchanging information and ideas. Do not equate collaboration with a merger. - Be clear about priorities.
Let nonprofits know whether to invest time pursuing your funding. Provide the information they need to decide whether to spend their scarce time and resources to prepare a proposal for you. Provide a written outline of the basics listed below. A photocopied sheet is fine; appearance is not important, but providing this information is. The goal here is to make the best use of resources - for you to get fewer inappropriate proposals and for the nonprofits to self-screen so they don't waste time on proposals that you won't seriously consider. Let them know the following: - Your preferred areas of funding and whether you accept proposals outside these. If you really have no preferences, say so. You probably do have priorities, even if you think you don't. At the very least, look back at the proposals you have funded and not funded to discern your patterns.
- Your preferred types of funding - such as organizational capacity-building, financial stabilization, planning, board development, staff development, equipment, capital projects, endowments, start-up, operating support, direct services and special projects.
- The grants you made in the past year. Include the grantee, location, amount and a brief statement of the purpose. This enables nonprofits to screen themselves out before they apply - so you get more appropriate proposals and fewer inappropriate ones.
Be clear whether you are willing to collaborate with other funders. If you want to be the only funder for a particular effort, say so early and then fund it fully.
When you decline a proposal, offer the clearest information you can about why. Even one phrase can save weeks of staff time (and scarce dollars) in preparing another proposal for you. No feedback often means you will get a future proposal you will not seriously consider. Tell the applicant whether or not it would be wise to resubmit the same proposal. If there is not enough interest to warrant any proposal from the group in the next year, say so. Your are doing them a favor and saving valuable community resources as well as your own time.
* These recommendations were based on comments provided in focus groups and interviews with over 1,l00 nonprofit leaders across the state of North Carolina.