While many foundations and donors loosened restrictions on giving during the pandemic, it’s still unclear whether that trend will continue. Yet the costs of running a nonprofit, and holding onto talented staff, keep rising.
To make the most of your time when seeking general operating grants, first do research to determine whether the foundation provides this form of support, says Shireen Zaman, program officer for the Ford Foundation’s Building Institutions and Networks (BUILD) program, which gives multi-year, flexible grants to social-justice groups. “Unfortunately, there’s still a lot of funders who lean more towards project support, and that could be for various reasons,” Zaman says.
Remember, most program officers don’t make the final decision about a grant, she adds, so you should help them advocate for your organization by making your case for support as clear as possible. One of the key things a foundation wants to know when considering an unrestricted grant is how your work advances the foundation’s mission, she says. If you can articulate that clearly, you’ll make the program officer’s job easier. “Don’t expect the funder to see all the 27 things that you do that are super aligned,” Zaman says. “Be really clear about how those 27 things are aligned to the foundation — of course, in a succinct way but in a really direct way.”
This approach worked for MDC, a nonprofit that promotes equity and economic mobility in the South, when John Simpkins took the reins in 2020 and started shifting the organization’s focus toward general operating grants. The group very quickly secured about 15 percent of its budget in such support, he says, which enabled it to hire a consultant to help build on that.
As a starting point with a new grant maker, shoot for about 15 to 25 percent of your budget, knowing that you might get less.
A key piece of this work involved talking with grant makers about how the broad themes of MDC’s work connected to the foundations’ own strategies, Simpkins says, and the value they would get from supporting MDC as a whole instead of specific programs. He puts it this way: “They would get better synergies across the work that we do, they would get the benefit of some of the other projects that we’re involved in that don’t necessarily touch work that they fund, and we could be, going forward, better strategic partners and thought partners for those funding organizations as they’re looking at their priorities and what impact they were seeking to have.”
The Chronicle spoke with a variety of experts, who shared their perspectives and experience to help you raise unrestricted dollars for your cause. Here’s their top advice.
Don’t shy away from asking for unrestricted grants.
Asking for general support doesn’t have to be as hard as many fundraisers and nonprofit leaders make it, says Sherry Quam Taylor, a consultant who teaches nonprofits, including MDC, to secure unrestricted gifts from grant makers and individual donors. When organizations are not regularly getting this form of support, she says, it’s often because they aren’t having “investment-level” conversations with donors. Many organizations talk about their mission, programs, and impact and stop there, she explains. Quam Taylor trains her clients instead to move into the financial story — the nonprofit’s growth, it’s strategic plan, and how its financial needs line up with that. “And that’s when a donor says, ‘Well, this just makes sense. Of course, you need general operating gifts,’” she says.
Don’t hold anything back about how you’re spending your money. Then it’s much easier to make the business case for why the entire organization is worth an investment.
Keep in mind that many major donors often attend similar investment meetings at their own businesses, Quam Taylor adds, so they are used to having these financial conversations. “All that’s to say, we have to speak their language if we’re going to ask for general operating gifts because they’ve been in your shoes,” she says. “They’ve asked for investments. They’ve had to explain why their budgets are growing. They’ve had to do all of these things.”
Know your organization’s numbers.
Before going into these meetings, make sure you understand your nonprofit’s overall operating expenses, Simpkins says, both administrative and programmatic. “Think about which partners you could have those very direct and honest conversations with and give them a chance to look under the hood,” he says. “Don’t hold anything back about how you’re spending your money. Then it’s much easier to make the business case for why the entire organization is worth an investment.”
Don’t worry so much about choosing just the right words, Quam Taylor says. It’s more about knowing your organization well enough to be able to articulate the financial need. “We don’t have to be some fancy fundraising version of ourselves,” she says. “We need to know where we’re headed in three to five years. We need to know how our finances tie to that. And when you know that, there’s confidence in knowing your numbers and you sit at the table differently.”
Take an “asset-based approach.”
When seeking general support, share your organization’s current priorities and past results, Simpkins says, and invite the grant maker to join you in your next step. It’s the same as if you were running a startup and looking for venture capital, he says. “You’re selling people on a vision and an idea. If you’ve got some proof of competency and results prior to that, I think it becomes an even stronger case.”
It’s the combination of time to both act and think that I think is the most valuable aspect of general operating support.
Don’t think of asking for overhead support as a sign of weakness, he adds. Instead, focus on your organization’s strengths. Simpkins suggests saying something like, “These are the things that we’ve done well. We want to build on this, and we want you to work with us as we’re building on these things.”
If you’ve received unrestricted support from other foundations, you could mention that as a way to broach the topic with prospective grant makers or existing partners that provide program grants, Simpkins says. Explain that other foundations have seen value in this approach, he suggests. Then say you would like to have a similar conversation and share a little about your nonprofit’s work and why you think you’re worthy of support.
Explain the potential impact.
Part of the conversation MDC has with grant makers is that unrestricted support is a better way of spending money than keeping it in “silos,” Simpkins says. The group explains that having the flexibility to decide how to use the funds enables it to better integrate its different areas of work, which increases impact.
It’s also smart to talk about how unrestricted support will help your nonprofit reduce the administrative burden created by program grants — allocating and tracking hours spent on specific projects, for example — so you can focus on accomplishing your mission, he says.
Highlight the opportunity for strategic growth.
Make a compelling case by talking about experimentation and innovation, Zaman says. Grant makers want to see nonprofits innovate, grow, and adapt to rapidly changing environments, she adds, and giving unrestricted money is the best way to encourage that. When making this argument to a foundation, say you need flexibility to try some things out for a couple of years. Explain that you’ll figure out exactly what the work costs after that, but you don’t know now because it’s new.
Make the case for a specific investment.
For example, a BUILD grantee that experienced a number of severe Covid cases among its employees during the pandemic identified new needs such as enhancing its health insurance and increasing redundancy on its staff to ensure coverage during employee absences. The group created a thoughtful plan that included an analysis of what those efforts would cost, Zaman says, and it was compelling.
To make a case like this, she recommends doing an assessment of your organization’s needs, which you could do using Ford’s “Organizational Mapping Tool.” It’s helpful to share an initial rough estimate of the budget, too, she adds.
To deepen trust, cultivate foundations as if they were individual donors.
If you’re a small nonprofit, it’s especially important to sell both the organization’s vision and the community need you want to meet, Simpkins says. Then draw a direct line between that problem and the specific talent and resources your nonprofit would use to solve it. For very small groups, that might be a minor need, he adds, but that’s OK. “They can identify a discrete problem that they want to tackle and say, ‘We want to devote organizational resources to this, and with your support, it will give us the freedom to not only act but also think,’” he says. “It’s the combination of time to both act and think that I think is the most valuable aspect of general operating support.”
If you get rejected, follow up.
Ask a few questions to get a sense of why the foundation turned down your proposal and whether you should move on, Zaman suggests.
For example, ask for feedback and whether you should try again in a year. Or ask if it just wasn’t a good fit, Zaman says, and if they have suggestions for other potential grant makers.
Build relationships.
It may take some time to reach a level of comfort and mutual understanding so you can ask a grant maker for general support, Simpkins says. To deepen trust, he suggests cultivating foundations as if they were individual donors. Show them the breadth of your organization’s work beyond specific programs to help them see the overall vision and strategic direction, as well as the impact an unrestricted gift could have.
Work on getting to know program officers, too, Zaman says. Start by doing research to figure out who at the foundation seems to be focused on your nonprofit’s issue. Then see if you have a personal connection who could make an introduction, such as a peer organization that’s a grantee.
It may be two or three years before you even get a response. Then all of a sudden there might be an opportunity, so you never know what might click one day.
You could also try emailing or calling on your own, but be sure to personalize your approach to get their attention and show you’ve done research, Zaman says. That might mean commenting on something the program officer wrote or a podcast they hosted or even making a connection to their alma mater.
Other simple tactics might include adding program officers to your nonprofit’s email list (with their permission) or inviting them to events and webinars.
As a former fundraiser, Zaman would also occasionally send a casual email sharing an article she found interesting and thought the program officer would, too. “You know, it may be two years or three years before you even get a response email back,” Zaman says. “I’ve experienced that, too. And then all of a sudden there might be an opportunity, so you never really know what might click one day.”
Determine the right amount to request.
Most foundations probably won’t feel comfortable providing more than 20 to 30 percent of a nonprofit’s budget, Zaman says, because they don’t want the group to become overly dependent on their grant. As a starting point with a new grant maker, she suggests shooting for, at most, about 15 to 25 percent of your budget, knowing that you might get something less. Then, as you strengthen the relationship, you could ask for more.
Start now.
It can be hard to step out of the cycle of seeking program-based grants because of the constraints they put on your time, Simpkins says. But you shouldn’t let that stop you from moving toward general operating support. “There’s never going to be that perfect moment of quiet when everything will be set to the side and you can say, ‘Oh, so now we can think about this, and now we can do this,” he says. “It’s like jumping into Double Dutch — you just got to get in the ropes at some point and start hopping.”
