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July 05, 2016

Opinion: Include Fundraising Support in ‘Capacity Building’

The growing tide among foundations to help their nonprofit grantees cover overhead expenses should be extended to include financial support for fundraising efforts, Charity Defense Council head Dan Pallotta writes in the Harvard Business Review.

Mr. Pallotta, who touts the benefits of charities’ overhead spending, applauds the push by some big foundations to make “capacity building” grants that pay for administration, information technology, employee training, and other operational costs. Such support includes fundraising “just sometimes,” he writes, because “no one likes to fund fundraising. It’s sales. We turn up our nose.”

Unlike other infrastructure support, grants for fundraising efforts have a multiplier effect, potentially bringing in several times more money to support programs and overhead expenses, Mr. Pallotta argues. “It’s time smart people with lots of money recognized this and funded fundraising at their favorite grantees as a priority,” he says.

Read a Chronicle of Philanthropy article on grant makers’ changing attitudes on covering nonprofits’ overhead costs.