posted on: Thursday, September 20, 2007

By Pete Manzo

One of the best reasons for core operating support has nothing to do with grantees. Instead, it has to do with liberating foundation program staff. This is one of the most frequently overlooked, and oddly compelling arguments for foundations shifting more of their funding and operating support. We’ll get to the virtues of this rationale shortly, but before we do, let’s review the contours of the debate over general operating support.

General support funding has been a very hot topic recently, to tell from online discussions among philanthropoids. Recently, Paul Shoemaker of Social Venture Partners kicked off a hearty back and forth in the Stanford Social Innovation Review online, and Sean Stannard-Stockton provoked three waves of vigorous comments. Grantmakers for Effective Organizations (GEO) members apparently have spent a great deal of time on the topic this past few months, through their listserv and at meetings, and GEO recently published a General Operating Support Action Guide for grantmakers.

Many reasons are given both in support of and in opposition to giving general operating grants. In Not All Grants Are Created Equal, based on numerous interviews with foundation and nonprofit representatives, NCRP summarized the following reasons funders commonly give for preferring restricted grants: the need for evaluation, avoiding having nonprofits become dependent on their support, promoting competition among nonprofits for grant funds, and seeking to promote innovation. Nonprofit advocates have good responses to all those concerns, and in addition, make powerful arguments about how restricted grant funding hampers their ability to build their organizational capacity, exercise their best judgment about community needs, adapt to changing circumstances, and recover the true costs of their activities.

But even assuming nonprofit advocates have the better arguments about the virtues of general operating support, there are two key factors we should consider. First, in some sense it’s pointless to debate which is the better approach, project grants or core support. Both tools are needed and appropriate in different circumstances.

Second, and perhaps most important for NCRP and others who want to see foundations give more core support grants, rather than hashing out all the benefits of core support to grantees, the focus instead should be on what will lead foundations to change their behavior. I want to suggest two important factors. First, foundations are much more likely to give weight to the experience and arguments of other foundations, their peers, than those of outsiders, as I’ve argued previously. That’s why the thought leadership of funders like The California Wellness Foundation and F.B. Heron Foundation, both of which have described how expanding general operating support has improved their results, have been more valuable than any reports, books, rants and manifestos from outsiders could be.

And what about the changes that core support can make on the culture, the quality of work life and the overall effectiveness of foundations? This second factor gets back to the issue of liberating foundation staff. Motivating foundation leaders and their organizations to change their practices won’t often come about simply because it is the right thing to do. It seems much more likely that kind of change will require that they see compelling benefits to themselves in making those changes. John Stuart Mill pointed out this dynamic in his tract On the Subjugation of Women, and his arguments about why liberating women would make men better were among his most compelling points. I’m not at all comparing the plight of nonprofit grantseekers to the struggles of women or minorities for equal justice, of course. But one lesson among many of the women’s suffrage and civil rights movements is that appeals to the highest sense of self of the opponents can be more influential than abstract appeals to the right thing. This isn't because they're bad or uncaring people, but people need to want to change, and that desire usually needs to come from how they want to be.

So maybe increased attention to improving the influence of program officers, their agency within foundations, would be a good thing for both foundation and nonprofit leaders to consider. My younger nonprofit self would have dismissed this argument with an “oh, cry me a river, those poor foundation program officers, with their good salaries, nice offices, expense accounts, legions of support staff . . .” But at least from the outside, it certainly does look like being a grantmaker can be an isolating and disempowering experience, to tell from the aversion to risk, complaints about demanding boards and very heightened concern about process and documentation that we see. To give just one example, I watched with some amazement a few years ago as a program officer I consider a friend and colleague suffered through months of internal program meetings at several executive levels and wrote as many as 50 pages advocating funding of a grant for which the proposal was only five (5) pages. A fundraising consultant I know once described grantwriting as “like writing group term papers for a living,” and it seems program officers have to both read them and write them. I’m sure many of us have other stories to tell that could add pieces to the puzzle.

In the business world, giving more control to frontline workers has attracted champions as established as Toyota and Starbucks and as “insurgent” as FastCompany. Many foundations are now exhorting their program officers to think of themselves as changemakers rather than grantmakers. Against this backdrop, exploring the links between general operating support and possible changes in how program staff do their work certainly seems worth serious attention. Confident nonprofits want to have closer, more candid relationships with their funders, they want to be treated more like partners than vendors, they want to spend more time discussing how to meet their ultimate ends and less time jumping through process hoops. Their program officers may well have similar wants, and changing how program officers work may benefit workers and organizations on both sides of the foundation-nonprofit divide. And once movement in this direction starts, nonprofits may find more allies behind foundation walls.

Peter Manzo is an NCRP board member and the Director of Strategic Initiatives for the Advancement Project, a civil rights advocacy organization based in Los Angeles and Washington, D.C.